ACCA Financial Management lectures Download FM notes
ACCA F9 Capital Structure and Financial Ratios – Other financial ratios
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Hi John
Loving these lectures, so much better than Kaplan, BPP, First Intuition…
I am sitting f9 in June…
Fingers crossed…
Thank you very much for your comment 🙂
(and I hope the exam goes well for you)
Hi John,
While calculating the earnings per share, shouldn’t we also be subtracting the interest that has to be paid on the existing and new loan notes since just as preference shares its virtually certain that a fixed amount of interest has to be paid on the loan notes?
Thanks.
The current profit is already after the current interest.
The extra interest is dealt with in calculating the new EPS.
Right John! Just missed that! Thanks! 🙂
You are welcome 🙂
Sir, I just don’t understand one thing. While calculating the Financial Gearing for the second year we have used the figures 27500+1820 for equity. When Equity is Ordinary shares + other reserves, shouldn’t the retained earnings increase by $2463 (PAT 4508- Pref Dividend 225 – Current dividend 1820) and should the figure of equity for second year be 27500 + 2463?
Thank you
I have just watched that part of my lecture again – the retained earnings do increase by 2463, and I do have the figure for equity as being 27500 + 2463 !! 🙂
Thank you so much sir! You are great. Find this subject so much easier and interesting all because of you 😀
Dear sir how you calculted tax in next year currnt year tax is 1950 how the figure 1932 come
I assume that you have download the question (the link is further down this page), in which case you will see that the tax rate is 30%. So if the profit before tax next year is 6440, then the tax is 30% x 6440 = 1932.
sir can give me link to download this pilot paper
I can’t find it on acca web
thanks 🙂
Here is the Pilot Paper for this question:)
https://www.accaglobal.com/content/dam/acca/global/PDF-students/2012/pilotPaper.pdf
Sir it says
this document can’t be opened because it’s damaged or corrupted 🙁
It opens fine for me. It must be something at your end.
anyone can give me link to download the pilot paper from acca website
I don’t know which year it was
please anyone
Dear John, good lectures here. pls I do not understand your calculation of Ord. dividend where you did: 5000x$0.35x$1.04 = 1820. I want to know hw you got 0.35 and 1.04 Tnx.
From the question, there are 5,000 ordinary shares, the current dividend is $0.35 per share, and the dividend is growing at 4%.
So the total dividend is going to be 5,000 x $0.35 x 1.04 (the 1.04 being to add on 4%).
Hope that is clear.
Yes much clearer now. Tnx a lot !
You are welcome 🙂
Dear John,
I am confused for post-year effect for gearing ratio:
5000+2500+10000* / 27500+2463 = 58.4%
*I am confused for 10000, why you added this?
The first line of the question says that the company is planning on spending 10M and that it will be raised by issued loan notes.
So…..the total debt will increase.
Hello John
How do I know when to do Debt/Equity with oppose to Debt/Equity+Debt??
Your help would be much appreciated.
Thank you
Charlotte
Almost always the examiner defines it in the question.
If he doesn’t then you can do it either way – they give different answers but you would get full marks for either (provided you interpret the answer correctly).
Sir in earnings per share u wrote 9% of 5000 which gives 450 instead of 9% of 2500 which gives 225
Sorry 🙁
I have seen were the exam format for F9 as changed for 2014.The exam it seems will now have a multiple choice section for 40 marks.The current lectures and notes for F9 is structured to meet this component of the exam.Thank you for your previous quick and clear responses.Thanks for the good lectures.
The exam format does not change until the December exams.
The June exams will remain in the current format.
The syllabus is not changing for either June or December and so all the lectures and our notes are still valid.
Obviously after the June exams, we will introduce questions covering both sections of the new format exam.
It seems that ACCA has removed all Pilot paper now, cannot find it any more.
You are correct.
They only have a pilot paper when the whole syllabus changes, but now they have plenty of real exams since the syllabus changed.
We cannot post the pilot paper questions on here for copyright reasons. If you want to see the question then it will mean finding it in one of the Revision/Exam Kits from one of the approved publishers.
Here is the Pilot Paper for this question:)
https://www.accaglobal.com/content/dam/acca/global/PDF-students/2012/pilotPaper.pdf
thank you for the pilot paper
thanks hamzaharoon!
Sir if we consider preference shares as effectively long term liabillity and dividend paid on it as interest then should we not on that assumption include preference dividend in the interest cover ratias part of interest?
No. The reason is that interest has to be paid (and if the company cannot pay it then they could end up being forced into liquidation). Preference dividend has to be paid provided there is enough profit, but if there is not enough then it does not have to be paid so the company is not forced into liquidation.
Oh makes sense now. Thank you very much for the quick response. ????
You are welcome 🙂
Wow! Very nice lecture! I find the question is fairly (EASY) to be an exam standard part of a question! I wonder why nobody does it!
please can someone tell me which pilot is it refer to? the year and the question number,and where to get it
admin please could you help me?
the pilot paper which discussed here.
https://www.accaglobal.com/content/dam/acca/global/PDF-students/2012/pilotPaper.pdf
Thank you for sharing the link! …saved me from so much trouble!
Thank you for the link! 🙂
Thank you for the link 🙂
Dear John! Have a question that doesn’t relate to above pilot question but to Paper Dec 2009 Q3 A on theoretical ex rights price after the rights issue. In the answer, 50% of equity 6.5MN EURos has been divided by 1.3 to arrive to USD. Is this known mistake in the answer or I am reading something wrong? Thank you.
@vesna, The spot rate is given as EUR/$ 1.3, which means that 1.3 Euros = 1 $
So to convert 6.5M euros you need to divide by 1.3 to get $’s
@johnmoffat, Thank you.
Please note that the profit before tax is supposed to 6940 and profit for the period being 4858 and not 4508… and thanks.
@sandycmkm, the suggested answer has the same figures as in the lecture, I don’t follow your point
Droxfol co. pilot Q1 I think
Preference share interest should be 0.09 x 2500 = 225 right?
@bathape_r, Yes, but the correct term would be pref share dividends
which year pilot paper is discussed in this lecture?
This is a brilliant example to reflect exam standard.If we can have bit more of these, that will be very much grateful.
Tutor is absolutely awesome.Probably the best financial management lecturer to me.