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February 2016 32.00

Paper F9

Financial Management

This ACCA Study Text for Paper F9 Financial Management has been comprehensively reviewed by the ACCA examining team. This review guarantees appropriate depth and breadth of content and comprehensive syllabus coverage.

In addition to ACCA examining team reviewed material you get:

A user-friendly format for easy navigation Exam focus points describing what the examining team will want you to do Regular Fast Forward summaries emphasising the key points in each chapter Questions and quick quizzes to test your understanding A practice question bank containing exam- standard questions with answers A full index All you need in one book

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Financial Managem

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Paper F9Financial Management

For exams in September 2016, December 2016, March 2017 and June 2017

ACCA ApprovedStudy Text

ACF9ST16 (RICOH).indd 1-3 05/02/2016 16:13

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S T U D Y

T E X T

PAPER F9 FINANCIAL MANAGEMENT

BPP Learning Media is an ACCA Approved Content Provider. This means we work closely with ACCA to ensure this Study Text contains the information you need to pass your exam.

In this Study Text, which has been reviewed by the ACCA examination team, we:

Highlight the most important elements in the syllabus and the key skills you need

Signpost how each chapter links to the syllabus and the study guide

Provide lots of exam focus points demonstrating what is expected of you in the exam

Emphasise key points in regular fast forward summaries

Test your knowledge in quick quizzes

Examine your understanding in our practice question bank

Reference all the important topics in our full index

BPP's Practice & Revision Kit also supports this paper.

FOR EXAMS FROM IN SEPTEMBER 2016, DECEMBER 2016, MARCH 2017 AND JUNE 2017

ii

First edition 2007 Ninth edition February 2016

ISBN 9781 4727 4426 5 (Previous ISBN 9781 4727 2678 0)

e-ISBN 9781 4727 4668 9

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BPP Learning Media Ltd 2016

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Contents iii

Contents Page

Introduction Helping you to pass v Studying F9 vii The exam paper and exam formulae ix Syllabus and study guide xi

Part A Financial management function 1 Financial management and financial objectives 3

Part B Financial management environment 2 The economic environment for business 37 3 Financial markets, money markets and institutions 57

Part C Working capital management 4 Working capital 79 5 Managing working capital 93 6 Working capital finance 119

Part D Investment appraisal 7 Investment decisions 143 8 Investment appraisal using DCF methods 159 9 Allowing for inflation and taxation 177 10 Project appraisal and risk 189 11 Specific investment decisions 205

Part E Business finance 12 Sources of finance 225 13 Dividend policy 259 14 Gearing and capital structure 269 15 The cost of capital 291 16 Capital structure 317

Part F Business valuations 17 Business valuations 337 18 Market efficiency 361

Part G Risk management 19 Foreign currency risk 373 20 Interest rate risk 401

Appendix Mathematical tables 415

Practice question bank 419 Practice answer bank 455 Index 507

Review form

iv Introduction

Introduction v

Helping you to pass

BPP Learning Media ACCA Approved Content Provider

As ACCA's Approved Content Provider, BPP Learning Media gives you the opportunity to use study materials reviewed by the ACCA examination team. By incorporating the examination team's comments and suggestions regarding the depth and breadth of syllabus coverage, the BPP Learning Media Study Text provides excellent, ACCA-approved support for your studies.

The PER alert

Before you can qualify as an ACCA member, you not only have to pass all your exams but also fulfil a three year practical experience requirement (PER). To help you to recognise areas of the syllabus that you might be able to apply in the workplace to achieve different performance objectives, we have introduced the 'PER alert' feature. You will find this feature throughout the Study Text to remind you that what you are learning to pass your ACCA exams is equally useful to the fulfilmen