Examiner’s interview: F9 – Financial Management
Interviewer:Hello. Welcome to the examiner’s interview for F9,Financial
Management. The examiner, Tony Head, has provided the answers and
distributed system新东方雅思词汇书his words are spoken by an actor.
The interview covers a range of issues, focusing on candidates’
performance over the last 4 exam ssions and how to improve it.
Can you start by reviewing candidate performance over the past four exam
ssions?
Examiner:Yes. I will review examination performance from June 2009 to December 2010. I would like to begin by highlighting what was done well.
Interviewer: So are there specific areas where candidates performed well?
Examiner:Yes, there are. As you can e here, working capital management and investment appraisal are two areas where students often do well, perhaps
becau they are large areas of the syllabus and so each has veral
chapters in the study texts.
儿歌下载 mp3Successful students are able to apply investment appraisal methods, such as net prent value and internal rate of return, while also understanding some of the theory underlying capital budgeting and investment decisions. They show they are aware of some of the factors that affect investment decisions in the real world, such as inflation and taxation. Successful students are familiar with the different areas of working capital management and the way they interact in effective financial management. Investment decisions and working capital management are key areas for the finance manager.
Allowing for inflation and taxation is often done well, with clear workings for inflated cash flows and capital allowance calculations. The syllabus area of specific investment decisions includes comparing leasing with borrowing to buy, and equivalent annual cost in December 2009, as well as ast replacement decisions in June 2010. Both of the topics were handled reasonably well by ca
雅思考试券tcindidates in tho exams. Topics such as calculating the cost of equity, whether by the capital ast pricing model or by the dividend growth model, and calculating the cost of debt, using linear interpolation, have been done well during the period. Weighted Average Cost of Capital calculations, which from now on will be referred to as WACC calculations, usually tend to be done well and a good understanding of the capital ast pricing model is often displayed.
Some share valuation methods, such as the dividend growth model, are
done well, as in June and December 2010. From the same syllabus area,
the topic of market efficiency was discusd well in December 2010.
From the risk management part of the syllabus, questions about hedging
exchange rate risk can produce good calculations or discussions, as in
tasterJune 2009 and December 2009, while the caus of interest rate changes
were dealt with well in December 2010.
Interviewer:Thank you. Are there areas where candidates have struggled?
Examiner: Yes, there are. Many students struggled to explain the relationship
between investment decisions, financing decisions and dividend decisions
in June 2010. Students often struggle with accounting ratios; the are
defined and discusd in the study texts, in appropriate contexts. When
asked to describe and apply ways of measuring achievement of corporate
objectives in June 2010, for example, many students could not calculate
dividend yield, capital gain or total shareholder return. Many students
struggled to analyze financial position and performance when looking at a
financing need in December 2010. An unexpected question can catch out
unprepared students, which may explain some poor answers about
financial intermediaries in December 2009. Cash management
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calculations proved to be difficult for some students in June 2009, looking
at closing bank balances, and in June 2010, where expected values of
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cash balances were ud. Working capital financing policy is often
confud with working capital investment policy, perhaps becau the
same terms (aggressive and conrvative) are ud in both policies. Interviewer: Were any other areas not done well?
Examiner:Yes, unfortunately there are other weakness.
Another unexpected topic may have been stages of the capital budgeting
process in June 2009. Payback and ROCE were not discusd well in
December 2010, which was a bit surprising. Some students tried to
discuss NPV instead, so it may have been a matter of revision focus.
Leasing was looked at in December 2009 and many students had
difficulty identifying financing cash flows, choosing as a result to combine
the leasing evaluation and the investment appraisal. Long-term finance is
a part of the syllabus where students often struggle, whether looking at
equity finance and rights issues in June 2009, equal amounts of equity
and debt in December 2009, debt finance and alternative financing
sources in June 2009, or suitable finance for an acquisition in December
2009. Dividend policy and share prices produced some poor answers in
高三家长会>成都雅思教育管理有限责任公司December 2009, and the suggested answer to this question may have
contributed to the poor discussion of factors relevant to dividend policy in
December 2010.
A couple more areas also need highlighting.
‘Impact of financing on financial position’ is cloly related to the problem
area of long-term finance that I referred to previously. This is where
financing interacts with accounting ratios and financial risk and it led to
problems for students in each of the last four exams. WACC calculations
can be done well, but some students struggled when asked about a
change in WACC in June 2010. Valuation methods can be applied well,
but many students in December 2010 were not aware of net ast value.
Income-bad valuation methods include the price / earnings ratio
method, which led to some very poor answers in June 2009. The dividend
growth model was not applied well in the same question, either.
Discussing the factors influencing the cost of debt on bonds was a struggle
for some students in December 2010.
Interviewer:So, having been through candidate performance over the past four papers, would you say there are any lessons to be learned?
Examiner: Yes. The structure and general approach of the examination is familiar and the syllabus is well understood. The need for candidates to understand the
underlying theory of financial management must again be emphasized, as
some candidates ek to pass the examination with an emphasis on
calculation rather than discussion. Understanding the underlying theory
helps candidates to lect and apply appropriate financial management
tools and techniques even when faced with a question scenario with
which they are not familiar. Each examination paper consists of new
questions and candidates must be prepared for that.
Interviewer: So, what would you say are the key focus points?
Examiner:The first point is to study the whole syllabus in order, ction by ction.
Candidates must practice key techniques in the classroom and at home,
using practice questions to start with and building up to answering exam
standard questions.
While practice is important, it is also important to have a proper
understanding of the theory underlying the practical techniques ud in
calculation questions.
