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Dear sir it would be very kind of you if you could clarify what should be our approach when answering a question with LOT OF FIGURES (NUMBERS) given in the following cases;
1. to analyze/evaluate the performance (without specifying financial/non-financial) of an organization
2. comment on the acceptability/suitability of a project
3. Compare two or more divisions/companiesin the above scenarios if a jungle of data given (Typical exam style) which data(numbers) should we use and which data(numbers) we should interpret and present in the answer so that we could add value to the answer!
it’s very difficult to generalise because as I’m sure you have noticed questions and information come in all shapes and sizes.
1 To evaluate performance you have to work with what you are given. There have been questions on schools, consultancy companies etc and the data is very different. Look to see if mission, aim or objectives of the organisation are stated and try to make sure that those are comprehensively addressed in your answer. It’s fair to say that non-financial performance indicators are a major theme in this exam and therefore I would always try to look for those measures too.
2 This might just be NPV, but other measures might be used instead – like maximising contribution. Be aware of sensitivity to assumptions and also to stakeholders’ requirements and attitudes to risk and whether they find a project acceptable.
3 The standard financial measures are return on investment and residual income. However, questions might just look at maximisation of contribution. EVA could also be used.
Sorry not to be more useful. If I’d found the secret to answering your questions (if indeed there is a secret) I would be broadcasting it far and wide.
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