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    Revision Exams

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    Bandile Mhlongo
    The main exam topics include introduction to financial management, time value of money, portfolio management, and financial statement analysis. The revision questions cover tutorials on time value of money, portfolio management, and financial statement analysis. Specifically, they provide example calculations for time value of money, portfolio expected returns and risk, and applying the Altman model to a company's financial statements.

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    Revision Exams

    Uploaded by

    Bandile Mhlongo
    21 views3 pages
    The main exam topics include introduction to financial management, time value of money, portfolio management, and financial statement analysis. The revision questions cover tutorials on time value of money, portfolio management, and financial statement analysis. Specifically, they provide example calculations for time value of money, portfolio expected returns and risk, and applying the Altman model to a company's financial statements.

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    The main exam topics include introduction to financial management, time value of money, portfolio management, and financial statement analysis. The revision questions cover tutorials on time value of money, portfolio management, and financial statement analysis. Specifically, they provide example calculations for time value of money, portfolio expected returns and risk, and applying the Altman model to a company's financial statements.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    21 views3 pages

    Revision Exams

    Uploaded by

    Bandile Mhlongo
    The main exam topics include introduction to financial management, time value of money, portfolio management, and financial statement analysis. The revision questions cover tutorials on time value of money, portfolio management, and financial statement analysis. Specifically, they provide example calculations for time value of money, portfolio expected returns and risk, and applying the Altman model to a company's financial statements.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    You are on page 1of 3

    MAIN EXAM TOPICS

    1) Introduction to Financial Management (25 marks)


    2) Time Value of Money (25 marks)
    3) Portfolio Management (25 marks)
    4) Financial Statement Analysis (25 marks)

    REVISION QUESTIONS

    TUTORIAL 1: TIME VALUE OF MONEY

    a) An investment account earns 9% per annum over a period from 2000 to 2023, if
    your grandmother had invested R4 000 on your behalf, how much would you have at
    the end of 2023? Use Tables and round off to the nearest whole number.

    b) An investor deposits R2 000 into an account which offers 9% p.a interest


    compounded monthly. What is the value of the investment at the end of 5 years? Use
    formula and round off to the nearest whole number.

    c) Go through any retirement question from the tutorials.

    d) Theodore Brown purchases 1 500 non-redeemable preference shares at R2 each.


    These preference shares pay a coupon rate of 11%. The interest rate is 10%. What
    is the value of these preference shares today? Use formula method.

    e) Mrs. Quinn borrows R600 000, repayable over 6 years at 10% per annum with
    annual compounding and equal annual payments, how much of the loan will be
    outstanding after the end of the first year? Use formula method and round off to the
    nearest whole number.

    f) A 10-year old bond has a nominal value of R400 000 and a coupon rate of 5%. The
    YTM is also 5%. Calculate the Present Value of the bond. Use the tables and show
    all steps in your workings. Round off to the nearest whole number.
    TUTORIAL 2: PORTFOLIO MANAGEMENT

    Share N has a RN of 30%; s = 10% and Share Q has a RQ = 22% and s = 14%. The
    covariance is 0,7%. The portfolio weightings for Share N is 60% and for Share Q is
    40%.

    REQUIRED
    a) Calculate the Expected Return of the portfolio (round nearest whole number).

    b) Determine the risk of the portfolio, by calculating the Variance s2 portfolio and the

    standard deviation s of the portfolio (no rounding off necessary for the variance, the
    std deviation must be rounded to 2 decimal places).

    c) Calculate the correlation coefficient.

    d) David wants to add shares in Solomon Limited to his portfolio. The company has a
    beta of 0,5, the risk-free rate is 7%, and the return on the market is 12%. Determine
    the expected return using CAPM.

    TUTORIAL 3: FINANCIAL STATEMENT ANALYSIS


    The following information has been extracted from the company’s annual financial
    statements for the year ended 30 June 2022.

    R’s
    Revenue 8 964 000
    Cost of sales (4 680 000)
    Profit before interest and tax 3 726 000
    Finance costs (252 000)
    Profit before taxation 3 474 000
    Taxation expenses (1 042 200)
    Profit for the year 2 431 800
    R’s
    Non-current assets ?
    Property, Plant and Equipment 7 020 000

    Current assets ?
    Inventory 378 000
    Trade receivables 324 000
    Bank 162 000
    Total Assets 7 884 000

    Equity ?
    Ordinary share capital 3 783 600
    Retained earnings 3 096 000

    Non-current liabilities ?
    Long-term borrowings 540 000

    Current liabilities ?
    Trade payables 270 000
    Current tax payable 82 800
    Short-term borrowings 77 400
    Shareholders for dividends 34 200
    Total equity and liabilities 7 884 000

    The price of each ordinary share at year-end was R10 and there were 200 000
    shares in issue. The company taxation rate is 30%.

    REQUIRED
    a) Apply the Altman model using the above information (show all workings).
    Note: round off to two decimal places

    b) With reference the final calculation of the Z-score, comment on the company’s
    financial standing.

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