F9 Exam Tips by ATC,BPP,KAPLAN,LSBF Dec 2010 exam!

ATC
• The Miller-Orr model and Baumol model.
• Debt factoring and settlement discounts.
• SME finance (for more detail refer to the Student Accountant article
‘Business finance and the SME sector’ – September 2001).
• Purchasing power parity and interest rate parity theories.

BPP
• Working capital – questions on inventory management and receivables management are likely
here.
• Investment decisions – net present value (NPV), often with tax and inflation. You may need to calculate a weighted average cost of capital before you calculate an NPV.
• Sources of finance – a topical area, we would expect a part
question on financing problems covering gearing issues and problems for small and medium sized
companies. Ratio analysis is likely to feature here.
• Business valuations commonly tested and a core syllabus area. In recent sittings the examiner has looked to combine different syllabus areas within the same exam question; for example, asking you to calculate a cost of equity and then use it to value a company. Make sure that you are also able to value debt.
• Financial environment & risk management – recent exchange rate and interest rate volatility could impact on a company’s financial management plans – a part question on this area could be set, with further discussion and calculations on hedging techniques.

Kaplan

• Investment appraisal – risk and uncertainty.
• Working capital management – models for inventory and cash management.
• Valuations – asset and cash flow based values.
• Business finance – gearing/capital structure calculations/commentary.
• Risk management – interest rate risk.

LSBF
• Investment appraisal – tax and inflation.
• Cost of capital – project specific discount rates.
• Business finance – rights issue and gearing.
• Risk – parity theory and currency hedging.
• WCM – financing of WC and receivables.
• Valuation – PV of FCF.
• NPV – sensitivity analysis.