Financial Performance Measurement – ACCA Performance Management (PM)
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Hi John,
are we expected to know about the operating gearing ratio formula as well or just the gearing formula you mentioned in the lecture and notes?
Thank you.
Sir please are the formulas given during the exams
2006 closing inv is the opening inv of 2007
2007 closing inventory given
Cos given
We can find purchases?
True. But we cannot find them for both years and when comparing we need to compare the same thing.
Thank you
Hi Sir, just a quick question wouldn’t we know the Purchases if we do Cost of sales + Closing Inventory ?
Therefore,
653 / (5385+1006) * 365 days = 37 days ???
Please enlighten me
Thanking you in advance.
I’m sorry I meant:
653 / (5385+1006 – 871) * 365 days = 43 days
516 / (4212+871 – 0) * 365 days = 37 days
Thank you.
What about the opening inventory? (and it would need to be the same workings for both years for them to be comparable).
Greetings.
What about the operational gearing ratio ?
Is that not in the syllabus?
It is not mentioned in the syllabus. It is examined in Paper FM and there are free Paper FM lectures on it.
Thank you Sir with the lecture its so helpful.
Thank you for your comment 馃檪
Thank you so much for these teachings. I really appreciate how you simply explain these topics and help us see the logic and common sense 馃檪 behind it. I am writing in December and feel a lot more ready as I watch these videos!
Thank you for your comment 馃檪
Could you please tell me why we use the number of cost of sales as purchase instead of subtracting the sum of last year鈥檚 ending inventory and cost of sales by this year鈥檚 ending inventory?
i meant in the exams are given the formulaes
No – you have to learn them. The formula sheet that you are given in the exam is printed at the beginning of our free lecture notes.
sir, why is that you’re calculating net profit margin with PBIT instead of using net profit
Also in ROCE why we can’t use net profit instead of PBIT.
In receivables days and payables days why we’re not taking avg trade receivables and avg trade payables ?
As I explain in the lecture, it would be better to use average payables and receivables. However the problem is that we then need both the opening and closing balances. We may have both for one year but if we are comparing this year and last year then we need both balances for both years otherwise it is not a fair comparison.
Thankyou sir
You are welcome 馃檪
Because we are measuring how well the business is performing. Tax and interest are not under the control of the managers running the business.
Thankyou sir
In some of the syllabus, they say we should use average receivables as against receivable
Opening receivable for 2007 will be ending of 2006
It depends on what information is given in the question as to whether to use average receivables or closing receivables (although if the information is available then average receivables is better).
And yes, opening receivables for 2007 will be the closing receivables for 2006.
Thank you so much sir for every lecture video..am so grateful.God bless you.
Thank you for your comment 馃檪
Sir,
In example 1, if reserves were given, we would have to take into consideration while calculating the total long term capital correct?
Thank you
Correct.
Thanks John
You are welcome 馃檪