October 8, 2015 at 10:05 pm
Thank you very much for your response. Like i said earlier, i am still new here and can’t really access the site well. I am still learning on how to get the best out of here and also make use of it in the best possible way. Please pardon my mistakes.
Please i will like you to help me with this other query, it concerns part 3( business models) of the RAP..
When carrying out business analysis using models in part three, on SWOT factors for example, do i need to compare this factor with that of the benchmarked company i am using? For example, if to say one of the company’s strength is Strong Brands, after analyzing how this affects business performance of my case study, do i need to now comment on the brand of the competitor(Benchmark) or i just need to focus on my case study? Like do i need to evaluate between the brand of my case study and that of the competitor?
Please i really need helpOctober 9, 2015 at 4:50 pm
Please can u help me to answer my query above concerning business modelling? (SWOT ANALYSIS)October 9, 2015 at 6:28 pm
Please i need your help here. It concerns business analysis in part three of the RAP.
When doing the business analysis, do i need to compare each factor for example say (Strong Brands) which is a strength with that of the competitor? or do I just need to analyze how this factor impacts the performance of the business relating to my case study only?
I will greatly appreciate your help as soon as you have the chance to.
Thanks.October 10, 2015 at 11:59 am
Hello, can anyone tell me do we include Profit after taxation or Total Comprehensive income while calculating Net Profit margin?October 10, 2015 at 12:10 pm
@umerkhayam- hi there!
Our suggestion is to always be aware of what you hope to convey. Each item conveys different messages.
If you wish to compare the operating efficiencies of a company, using EBIT (operating income) as the profit may make more sense. This is because interest depends on capital structure and tax is dependent on the country the entity operates in. Stripping off both tax and interest does make for a good comparison.
The Learning LuminariumOctober 11, 2015 at 8:25 am
@rosalemu – you only normally need to apply the SWOT to your main company. Although you don’t have to apply the PESTLE to the comparator it is worth remembering when doing your evaluation that the PESTLE for both companies will be very, very similar (if not identical) anyway.
When considering strength of brand in the application of the SWOT you would normally only apply it to the main company. However what you should also try to do when looking at market share, revenue or gross profits etc. is consider the impact of the SWOT and PESTLE factors on these. If the comparator has any obvious strengths and weaknesses then it may be appropriate to mention this when explaining the differences and making comparisons between the companies.
It is this practical application of the models in practice (linking theory to the reality of what has gone on in the 3 years) which lead to good analysis and higher gradesOctober 11, 2015 at 7:53 pm
Thank you very much for your response. I really appreciate. Just to make sure i got you perfectly, I will go ahead and ask this
Does it mean i don’t actually have to compare the factors with that of the comparator? Please i really want to be clear because i just finished doing my SWOT and PEST analysis and for each factor i gave, i compared it with that of the competitor. To be more precised, Coca-Cola Company is my case study and PepsiCo is the benchmark. But i just noticed this part alone is 1910 words and considering the fact that i still have a lot to write(Ratio analysis and evaluation, conclusion and recommendation), i decided to ask if its really necessary for me to do that or do i just need to focus on my case study (Coca-Cola ) when analyzing these factors. I really want to be clear if i just need to analyze how this factors impacts the business performance of my case study and ignore any evaluation between my case study and the competitor PepsiCo in relation to this factors? Please understand my insistence on this. I am resubmitting hence i really want to be sure as i don’t want to fail again.
Also, how many factors do i ideally need to give under each category of SWOT.( Be it strength, weaknesses etc)?
Please @trephena, i really need to be clarified before i proceed. ThanksOctober 11, 2015 at 10:10 pm
@rosalemu – well the fact that you have done the SWOT for both may allow you to at least use some of the factors for the comparator when assessing the financial results so the effort will not be totally wasted. Cut the actual formal SWOT for the comparator though to save your words. Another area to save words is in Part 1& 2 – do not go into unnecessary detail.
When you do your evaluation you need to look at how the SWOT and PEST have influenced management decisions and strategies and how these have impacted on the results so the factors from both sets of SWOTs and the PEST are extremely useful. It is difficult to say exactly how many factors you need, all I can advise is that integrating the application of the models and linking these factors to your explanations is key to passing and therefore you should spend adequate time assessing the factors. Read and research widely so that you have strong strengths and definite weaknesses etc.October 11, 2015 at 10:15 pm
@trephana, thank you very much. I really appreciate your advice. Thanks again.October 24, 2015 at 5:49 am
Does anyone know that if my net profit is a loss, can i still calculate net profit margin? im doing topic 8, to compare the company financial performance for 3 years.
Thanks for your help.October 26, 2015 at 12:06 am
Well if one company is making a profit and the other isn’t you can still plot them on the same graph but the ratio relating to the loss will be below the x axis but the title would still be ‘net profit ratio’. You would need to explain it in the text more in terms of the net loss to sales for the loss making company otherwise if you start calling it net profit ratio but show it as a negative figure it is not quite so clear. If they both make a loss then you would have to call it the graph ‘net loss ratio’ and remember that a decreasing net loss ratio over time would be a good thing whereas a,decreasing net profit ratio over time would be unfavourable.October 31, 2015 at 6:19 pm
I need clarity on the analysis of financial and business performance for years 2013 to 2015.For example for the revenue growth,net/gross profit operating margins do I need to split each year and explain why there is an increase or decrease ? eg 2013 why there is a decline in revenue and so on.Would this approach be the same for business analysis using PESTEL & SWOT models?
I’m not clear on the approach , can you please advise me.
Thanks you for your help.
KellannNovember 1, 2015 at 1:21 pm
Hi Trephena, can you please advice on the above ?
thank you!November 1, 2015 at 2:31 pm
@kellann – no you focus on factors over the 3 years for the SWOT and PESTLE but these factors often influence management decisions and impact on financial performance. So as I mention in my article on Evaluation and Analysis it is worth spending time on doing a good SWOT and PESTLE , reading the CEO and directors’ reports for the 4 years up to the latest financial report BEFORE you even attempt to analyse any ratios as you will have a better idea of the company’s strategies and direction.
Personally I don’t think there is a need to discuss each year for each ratio as you should be looking at and explaining the trends over the period. Remember for the management it is,a continuous operation with regular reviews-they do not meet together on the first day of the new financial year and say ‘what shall we do this year about our gross profit?’ nor assemble on the last day of the financial year to discuss the liquidity position.
Strategies can take several years to implement fully e.g. entering a new market and there is often a time lag between making a decision and its effect to impact on performance e.g. discontinuing a product. Therefore the CEO reports etc. are often ‘pointers’ that help explain subsequent performance as I try to explain in my article on Evaluation and Analysis on our homepage.November 1, 2015 at 4:16 pm
thanks a bunch Trephena !November 2, 2015 at 11:50 am
I would really appreciate a quick answer.
I am doing T8 and using PESTEL, SWOT and F5. I have done Part 1 and 2 in my project but my mentor’s feedback is “in terms of definition and explanation of the models, I am scratching the surface” but I am finding very difficult to find detail explanation/definitions/limitation about these models outside ACCA text book.
Can anyone please help me?November 9, 2015 at 3:09 pm
I failed the RAP in the period 30 submission, I passed the presentation and skills and learning statement.
My RAP was about Tesco.
I have just gathered myself since I had put in a lot. The marker said I failed on the financial analysis of the ratios.
Please advise as I really want to pass it this time round.November 9, 2015 at 9:49 pm
You need to appreciate what evaluation really entails. Financial analysis is NOT just about ratio calculations – it involves much more. Read the article on Evaluation & Analysis on our homepage http://www.opentuition.com/obu and look at our forums on financial analysis (read some of the postings above) where I try to explain the correct approach to takeNovember 14, 2015 at 11:21 pm
I proof reading my completed RAP, I have done operating profit margin but wondering if it’s better to do operating profit margin as one of my profitability ratios?
Also with investors ratios I have done EPS and dividend growth , would you recommend , EPS & Dividend per share instead?
Thank you for your help.
Kell AnnNovember 15, 2015 at 8:56 am
I don’t think you need to do a major change at this stage unless it involves strengthening the actual analysis. Your operating margin should logically come after a good discussion of gross profit. So as long as you are explaining the key factors that have impacted on profitability and this is not what the markers call ‘descriptive’ – that is it just talks about increases/decreases and by how much (telling the marker what they can already see from the graph or just looking at he FS) then it should be fine.
Regarding dividend per share – depending on how competent you are with Excel you might be able to incorporate dividend per share in the same graph as dividend growth. (Although I always recommend lots of graphs, where they can be combined this can be useful e.g. bars for the actual dividend per share with a line graph superimposed for the trend line in growth). However don’t worry if you can’t do this. The trend in dividend growth and the proper reasons for this are probably more important than the actual dividend per share. So you may be able to just mention this amount for either the first or last year in your text as part of your explanation.
At all costs you want to avoid ‘death by numbers’, that is boring the marker to death by just inserting figures (the dividend for XYZ was .. in 2013, … in 2014 and … in 2015 and for ABC … in 2013,…. in 2014 and …in 2015). Too many obvious numbers in any RAP (those the marker can see in a graph or could discover simply by looking at the FS) will make the marker retreat to the feedback sheet to avoid being drowned in a flood of figures -they will just switch off completely, stop reading and start writing. That is why I tell students to get someone to read their work as if your aunt/brother/friend starts to get bored and overwhelmed by all the numbers the marker certainly will (because by the time they reach yours they may will have had weeks of being bombarded by such material ) Make your work interesting, make it thrill not kill (surprise them with the depth of your research and knowledge) and they will hang on in there and read it to the end and give you a decent grade
[I showed the article by TLL on our homepage (under New Articles) about the 5 common reasons for failing to an experienced marker for their comments and asked about the last point. They laughed and said yes that is exactly what happens sometimes except they are not glad because although they can fail a RAP like this in 10 minutes without even bothering to read to the end they then have to spend another 30 minutes writing the feedback before they can pick up the marking fee! What they would much rather do is spend about a total of 20 minutes on each report and be able to put at least a C in the grade box and then move on to the next!]November 15, 2015 at 1:50 pm
Thank you Trephena, I meant net profit margin..I have done an analysis of operating profit margin(OPM)instead.
So for OPM,this is what stated that caused the decrease: one off charges like impairment , onerous contract provision,huge advertisement and skilled labour costs which caused a decrease.Does this sound ok?
I’m so tight with word count, I wish part wasn’t that many,I think this should have been lower and more toward part 3.As a result I have used Acronyms,like OPM,EPS..,is this acceptable?
Your dividend explanation makes sense.
Your response is very interesting indeed,especially the last bit!Its funny that, as I got my colleague to proof read it 4 days ago, he said the same that I killed him with so many numbers so just changed format a bit.
Thanks for the pointers,such invaluable advise as ALWAYS.
Kell AnnNovember 15, 2015 at 2:32 pm
Well, value your colleague who probably found it hard to criticise you to your face but has your best interests at heart so is a good friend 🙂 As long as your objectives and research approach are clear and you consider limitations, the markers are just not interested in why you chose the company/topic or details of your sources (they can see the proof of the latter in Part 3). So trim the superfluous bits of parts 1 & 2 if word count is a problem.
It is WHY the impairment charges and advertising costs etc.are high that you need to discuss – otherwise it just reads like notes to the accounts or a ‘text-book’ type of approach (and again will cause the marker to groan and roll their eyes in despair). Did you read my bit on page 3 of ‘Top Tips for the RAP’ where someone asked how to get a higher grade? Spend a few minutes reading the hints from me and the marker -and more importantly -apply them! 🙂November 15, 2015 at 3:19 pm
Sure thing Trephena .My colleague asked me why am I waffling on so much in Part 2.
I would rather trim it down in P2 and add more to Part 3 , this will make a more conclusive report.I wasn’t sure on the rules , as I thought I needed to stick to P1 = 1000 ,P2 =2,000 , I did not realise that I could trim it down as long as whole RAP = 7,500.Do you know what is the minimum word count in Part 1 & 2 that I could have ? say 900 & 1,800 for each part?
I will read the hints straight away.
Many thanks for all your help!:)
Kell AnnMarch 10, 2016 at 6:40 am
Should I use passenger load factor as one of the ratios for my airlines analysis or I could just mention about it when discussing about passenger yield?
Best regardsMarch 10, 2016 at 3:49 pm
Hi, Hope you are well! Answer to your question is:
As per definition, this ratio is dimensionless ratio of passenger-kilometres travelled to seat-kilometres available. Hence, i will recommend to use other ratios too. You should use this factor in cost analysis and sales trend analysis. You cannot relate this ratio directly to FS but it is an indirect useful ratio.
Hammad Ahmed Qureshi – OBU Registered Mentor.
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