(FM) â (Phase Out) Tutorial Letter: October 2013 examination ... - imm
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Financial Management (FM) – (Phase Out) Tutorial Letter: October 2013 examination session Dear Student Please make note of the following key areas and notes pertaining to the Financial Management October Examination. You are reminded that the detail provided herein is merely a guideline for clarity and direction and you are encouraged to complete the entirety of the module content as outlined in the Learner Guide. Exam Structure The paper consists of six (6) questions resulting in an exam total of 100 marks. All questions must be attempted. Marks are broken down as follows: Question 1 (15 marks), Question 2 (12 marks), Question 3 (25 marks), Question 4 (18 marks), Question 5 (15 marks) and Question 6 (15 marks). Question 1 is multiple choice and all the other questions comprise of a combination of short questions, calculations and long questions based on independent scenarios. Exam Content The paper is predominantly calculation based, however, there are theoretical components within each question which at times include interpretation and analysis of amounts calculated. Question 1 consists of multiple choice questions involving mostly theoretical concepts and some short calculations. Calculation focus: Stock valuation calculations (closing stock, cost of sales and gross profit using FIFO), calculations aiding the formulation of BASIC cash inflows/outflows vs. an Income Statement, ratio analysis/ analysis of financials, break-even analysis (contribution, break even revenue and units etc.) and NPV calculations (calculating NET cash flows per period and present valuing these amounts using discount factors provided to arrive at the NPV).
© IMM Graduate School of Marketing October 2013 examination session
FM
Page 2 of 3 You are reminded to have fully grasped the following concepts amongst others in order to master the topics covered in the examination: Long term investment decisions (NPV), Analysis of financial statements and interpretations of ratios (in terms of gearing etc.), Analysing cash flows (presented in a cash budget/basic cash flow format), Stock valuation (FIFO based closing stock and cost of sales implications), break-even analysis (classification of costs and understanding the changes in conditions/variables on the formula), calculation of profits/losses through the income statement, understanding the elements of accounting (assets, liabilities and owners’ equity) as well as classification of the elements as current and non-current. Please note the following sections should be read for informative purposes but will NOT be examined: o Forecasting in its entirety (time series, regression etc.) o Introduction to Spreadsheets: Calculations and charts o Analysis of Profit Pathways General Time management per question must be monitored carefully. You are reminded to show your workings and calculations where necessary and ensure that they can be easily referenced. Examiners will not ‘hunt’ for substantiating workings. Number all questions CLEARLY and indicate ‘End’ when you have completed all questions in the exam. Formats of particular answers (such as the income statement, FIFO stock card, NPV cash flows and columns etc.) are important and answers that are poorly structured will be penalised. Use mark allocation as a guide as to how much information is required when formulating your responses. Negative/ amounts being deducted must be clearly shown. This is usually done by using brackets around the values. Please see attached the exam formula sheet (Appendix A) which will be provided in the exam. May we remind you that we are always available to assist with academic queries. Academic queries should be submitted in writing to: [email protected] We wish you a successful October 2013 examination session. Kind regards The IMM GSM Team
© IMM Graduate School of Marketing October 2013 examination session
FM
Page 3 of 3 APPENDIX A : FORMULA SHEET
Gross profit margin
=
Gross profit Sales
Debtors Collection period
=
Trade receivables Credit Sales
Inventory/Stock turnover
=
Cost of sales Average Stock
Payment period/ creditors collection period
=
Trade creditors Cost of sales/ credit purchases
EPS
=
NPAT Number of shares
Quick ratio
=
Current assets - stock Current liabilities
ROE
=
NPAT Shareholder’s equity
ROCE
=
PBIT Equity and LTD + Net total assets
Current ratio
=
Current assets Current liabilities
Long-term Debt: Total Equity
=
LTD Equity
Asset turnover
=
Sales Net Total Assets
=
Dividends per share Share price
=
Share price EPS
Dividend yield
P/E – ratio
x
x
360 1
360 1
© IMM Graduate School of Marketing October 2013 examination session
FM
Financial Management (FM) – (Phase Out) Tutorial Letter: October 2013 examination session Dear Student Please make note of the following key areas and notes pertaining to the Financial Management October Examination. You are reminded that the detail provided herein is merely a guideline for clarity and direction and you are encouraged to complete the entirety of the module content as outlined in the Learner Guide. Exam Structure The paper consists of six (6) questions resulting in an exam total of 100 marks. All questions must be attempted. Marks are broken down as follows: Question 1 (15 marks), Question 2 (12 marks), Question 3 (25 marks), Question 4 (18 marks), Question 5 (15 marks) and Question 6 (15 marks). Question 1 is multiple choice and all the other questions comprise of a combination of short questions, calculations and long questions based on independent scenarios. Exam Content The paper is predominantly calculation based, however, there are theoretical components within each question which at times include interpretation and analysis of amounts calculated. Question 1 consists of multiple choice questions involving mostly theoretical concepts and some short calculations. Calculation focus: Stock valuation calculations (closing stock, cost of sales and gross profit using FIFO), calculations aiding the formulation of BASIC cash inflows/outflows vs. an Income Statement, ratio analysis/ analysis of financials, break-even analysis (contribution, break even revenue and units etc.) and NPV calculations (calculating NET cash flows per period and present valuing these amounts using discount factors provided to arrive at the NPV).
© IMM Graduate School of Marketing October 2013 examination session
FM
Page 2 of 3 You are reminded to have fully grasped the following concepts amongst others in order to master the topics covered in the examination: Long term investment decisions (NPV), Analysis of financial statements and interpretations of ratios (in terms of gearing etc.), Analysing cash flows (presented in a cash budget/basic cash flow format), Stock valuation (FIFO based closing stock and cost of sales implications), break-even analysis (classification of costs and understanding the changes in conditions/variables on the formula), calculation of profits/losses through the income statement, understanding the elements of accounting (assets, liabilities and owners’ equity) as well as classification of the elements as current and non-current. Please note the following sections should be read for informative purposes but will NOT be examined: o Forecasting in its entirety (time series, regression etc.) o Introduction to Spreadsheets: Calculations and charts o Analysis of Profit Pathways General Time management per question must be monitored carefully. You are reminded to show your workings and calculations where necessary and ensure that they can be easily referenced. Examiners will not ‘hunt’ for substantiating workings. Number all questions CLEARLY and indicate ‘End’ when you have completed all questions in the exam. Formats of particular answers (such as the income statement, FIFO stock card, NPV cash flows and columns etc.) are important and answers that are poorly structured will be penalised. Use mark allocation as a guide as to how much information is required when formulating your responses. Negative/ amounts being deducted must be clearly shown. This is usually done by using brackets around the values. Please see attached the exam formula sheet (Appendix A) which will be provided in the exam. May we remind you that we are always available to assist with academic queries. Academic queries should be submitted in writing to: [email protected] We wish you a successful October 2013 examination session. Kind regards The IMM GSM Team
© IMM Graduate School of Marketing October 2013 examination session
FM
Page 3 of 3 APPENDIX A : FORMULA SHEET
Gross profit margin
=
Gross profit Sales
Debtors Collection period
=
Trade receivables Credit Sales
Inventory/Stock turnover
=
Cost of sales Average Stock
Payment period/ creditors collection period
=
Trade creditors Cost of sales/ credit purchases
EPS
=
NPAT Number of shares
Quick ratio
=
Current assets - stock Current liabilities
ROE
=
NPAT Shareholder’s equity
ROCE
=
PBIT Equity and LTD + Net total assets
Current ratio
=
Current assets Current liabilities
Long-term Debt: Total Equity
=
LTD Equity
Asset turnover
=
Sales Net Total Assets
=
Dividends per share Share price
=
Share price EPS
Dividend yield
P/E – ratio
x
x
360 1
360 1
© IMM Graduate School of Marketing October 2013 examination session
FM
