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Hello, a good place to start is a reassessment of your project objectives, which of the generic financial ratios will help you reach your goals? Then look at the common kpis used in the industry and try and see if you can come up with a unique ratio so long as it fits the definition of a “financial ratio”. It is not a must explain a ratio from each of the common ratio categories ( profitability, investors, working capital etc) if you feel working capital ratios are not suitable for your rap you can ignore it. finally, what matters most is the quality of your analysis, 5 to 7 ratios explained properly is good.
Read the annual reports( the 3yrs + a year b4, to establish
a trend) of your company extensively, with great focus on the chairman’s statement, director’s report, and any other key person’s report. This will enable you understand what is going on in the organisation internally and how the business environment is affecting operations.You should be able to pick up on key words, phrases and ideas. Use this on a search engine to find external evidence. Read and sift through your findings to gather the appropriate material you can reference.
For example, if your organisation of choice is Tesla, Google search- ‘ Tesla 2017 profitability ‘, Tesla share price ‘, ‘Tesla elon musk expectations ‘ … etc. Ofcourse these examples are very generic but they still work, your search effectiveness will depend on your ingenuity.
Hi, No it is not sufficient. Yes you do
Q2- good sources include, online newspaper articles, journals, press releases, industry publications, independent analysts reports, economic reports, md/ceo interviews articles, etc
Hey, you can organise your data with multiple sheets in the excel file, you can demonstrate knowledge of functions and formulas when you perform basic normal calculations in the fs you would have manually inputed, like Revenue – cogs = Gross Profit ….. which may be a formula as simple as =C6-C7. This formula becomes complicated when in your ratio sheet/ area in the excel file you are calculating GP margin, but it all adds to showing excel knowledge.
you can do this for all other relevant areas in your appropriate fs selection, most of the time it might not be necessary to include notes to the fs.Its painstaking work, but it has to be done. You could have been done by now if you started earnestly on the 21st … 🙂
Oh now I see, I understand your point now Maryam. I believe what obu is trying to achieve by separating spreadsheet file and appendices (eg financial statements pdf file as in the case of topic 8) is to ensure the student has shown the use of functions and/or formulas (which can not be shown from pdf), and can work with different document types perhaps, among other things.
From an overall perspective, Appendices are all just additional information to support the rap, be it in the form of excel spreadsheet of pdf statements.
Here’s what worked for me. Multiple organised sheets in my spreadsheet workbook. I had one for the financial statements of my main company and comparator, I had another that comprises of a neat table where i compiled my calculated ratio figures, the next and final sheet was kept for graphs which I later exported as images to my rap document. By all means, feel free to add more information as per your research direction, i have read of a student adding a swot analysis of the comparator on this forum.
I appropriately labelled the sheets with their respective headings, providing any additional descriptions where necessary, referenced the fs to their respective annual reports, and systematically designated each piece of information with an appendix number or letter.
Where I referenced the graph figure in the rap, I was directly referencing the ratio data i had calculated (which can be traced back to the fs figures sheet from the formulas) and not the graphs themselves.
To fulfil the requirement of my “appendices”, I just exported my fs sheet to pdf and submitted that. You will notice the obu information pack said to include only the relevant pages of the fs, In my work for example cash-flow statements as well as some other fs info was not relevant so I didn’t include them.
Like I said in my earlier posts, the aim of referencing is to find stuff easily, there is no best way, but there are best practices.
Hmn, saying ‘source excel’ , doesn’t sound quite polished to me. We know that when we are submitting the rap, we are to accompany it with an appendices file that contains any required and additional information in the form of an xls or xlsx format. Microsoft excel just happens to be the norm for spreadsheet software, the obu guidelines do not require you to strictly use excel. For the project, you will be submitting docx , xlsx, pdf formats etc . It is left to the examiner to open the files with their software of choice. Which is probably a Microsoft office software.
I Know the above assertion is true for a fact because I didn’t use any Microsoft office software to do my rap.
Bulletproof your work by applying better referencing methodology.Your presentation should be about your findings, consult the latest information pack for guidance on this (page 44). Parts 1 and 2 are predominantly about the writing process, and would therefore not be included on that basis.
I believe your mentor meant well with that comment, but “never limit yourself” is probably better applied in efforts to increase the depth of your analysis or expand the source and quality of your references. It is and important academic skill to stick to specified word limits in writing and that what obu intends to test.
Writing about your competitor would most come in during the ratio analysis as a side by side comparison.
If you choose your main company and comparator well, you will find that their PEST external environment would be very similar, although this is rarely(if ever)100% accurate.
With swot analysis your focus is mainly on your company, your competitor would not typically come in.hello maryam20,
the slides need to be interesting, they need not be too wordy , you will appreciate use of images here. The idea is that you are expected to explain the slides during the 15 minute presentation. The slides should not be more than 20. The presentation is only about part 3 of your rap
It is a good idea to have a structure in the form of a table of contents, you could start by introducing your company and its operations, of course it is crucial that the audience knows your rap objectives. in the absence of any key information, you can then move on to the business performance through the means of the models, and then the financial performance which can be adequately shown as images too. you may include limitations if applicable, but a conclusion is obviously necessary.
Calculate your slides properly, don’t crowd each slide with too much information. You can always change the slides with hindsight after presentation to your mentor before you submit.
Hello msg4wale,
1. Yes, why not, it is an important source of evidence to show that you have adequately applied formula and functions all the way from the figures in the fs to the graph images.
2. Referencing is essentially just a way to find stuff easily,
source: abcd, year(s)
source: annual report of abcd, year(s)
You can also include the page numbers from the annual report if necessary3. If you have used figures from an external source like a business article, reference it as you have done to any other citation in your report. You c.an of course used the company’s own figures, but try to do some yourself.
If you have computed the figures yourself, reference it to the appropriate appendix in your spreadsheet. e.g for figure 1 , I could use source: Appendix B or see Appendix 2. Where hopefully there is a table that contains the ratios which have been calculated from the fs.
At this junction you will appreciate the need for an organised spreadsheet file, you can do this with multiple sheets that are adequately labelled.4. No
You mean total word count for the whole RAP, right?
The deadline fast approaches, Keep trying to reduce your word count, it will be prudent to aim for about 7200 to 7400 words in total , especially if you have Used plenty wordy images as graphs,
It is not possible for me to recommend how many words without seeing and understanding your work. However, with topic 8 a conclusion should be pretty straight forward, a decent conclusion can be done with about half the words you have used, less in some cases, it all depends on the researchers objectives.
Hello Champ,
Q1, Yes this is alright, provided you don’t skip a key requirement of each part.
Q2, Yes the refrences are inclusive, you are to use the word count in the status bar on ms word, you may choose to make an allowance for words used in images especially if you have quite a few in your report, as these are not captured by the word count.
Hello maryam20, good to see you’re almost through with your project.
A good conclusion simply summarises the findings of your research work, as such, this section would typically not need any external refrences. It may consist of a few concise paragraphs with short clever statements that address each your the project objectives.
The findings of your research may be positive, negative, a mix of both or even inconclusive, just briefly state it as it is with a justifiable reasoning.
Your consolidated understanding of the models and ratio analysis will help here.
No, a general limitations of finanacial ratios is fine. explain in respect to your relevant ratio where appropraite. make a plan for and stick to your word limits.
Q1 – The data here mainly refers to what was used to produce the analysis and evaluation, self learning sources about the reseach process can be excluded, Everything in your reference list has to be in your RAP, all information you have cited in your RAP should be traceable to its source through your refrence list.
Q2 – yes or no, your choice. you can briefly explain and differentiate them, and move on to focus your explanation on what is relevant to your research.
HI maryam20,
Question 1
if you are to follow the RAP research process to a t, it is expected that when you begin writing part 2, you should have collected and narrowed down your information (‘information gathering’) . Which in the case of topic 8 is done with secondary data such as annual reports of your company and comparator, online news report/articles etc.
There are two kinds of limitations you need for part 21st—while you were getting these information, think, what where the challenges you faced? did you have to pay for some info? Perhaps a method used to collect said information was not as efficient? etc. This will make up your limitations of information gathering.
2nd—when you explain the models and ratios you plan to use, like i described earlier (in earlier posts), you should also include a general texbook perspective explanation of their limitations.
For part 3
If you do a decent RAP you will most certainly encounter some ‘limitations in your analysis’, this in some part could be attributed to the fact that with topic 8 it is almost impossible to find a perfect comparator, as such certain issues will become apparent. A classic example is a significant difference in accounting policy that affects an Fs item which in turn affects a calculation of a financial ratio , which could affect its interpretation if the policy is not taken into account when a comparison is done.
You could also encounter a limitation as a result of the external environment, where perhaps the authorities over your organisations of choice are different in certain crucial areas that one has an economical advantage over the other.
Also, critically assess the information you are evaluating in this part, is it biased? to what extent? if so, what is the effect on your analysis, and ultimately your conclusion.(see page 36 of the latest OBU information pack for the structure of the RAP)
Question 2
explain the theory of the model in a brief and simple way, such that an average educated reader who is not an accountant or in a similar field, can understand and refer back to it when in doubt, and reasonably follow your evaluation in part 3.Note that PESTEL is a variation of the model PEST. and either is acceptable.
Yes, that is how the structure should be, you will find that a major challenge of the RAP is producing an adequate work that is within the word limit. This means actively making choices to only include the most suitable information and avoiding unnecesary beating about the bush.
Try your to stick within the OBU suggested word limit for each part, ofcouse you can deviate by say 100 to 400 words (if you deem it necessary) give or take, but dont do so at the expense of the OBU expected requirements (see information pack) for each part.
Yes, your part 3 would include your analysis using pestel, swot and the ratios. Infact a typical part 3 would include, a pestel analysis & swot analysis (Business analysis) , ratios analysis (Financial analysis) , limitations of analysis (if any) and very importantly a conclusion section, which summarises your work by answering your research questions. It is possible to add more sections, depending on each students research direction.
I have read of a student passing with 5 ratios, I myself did only 8. Let your research questions guide your choice and number of ratios. It is the suitability and quality of the evaluation of each ratio that is most important.
Hello maryam20,
In part 2, you explain the models and limitations generally from a textbook perspective.
In part 3, you apply the models(the theory from part 2) specifically as it relates to your organisation and achieving your objectives/ research questions ,ofcourse at the same time you are evaluating information, which is what counts for the majority of your overall grade.
Points for application come mostly from choosing appropriate models relevant to your topic
Hello mishukkazi, im not @trephena, but allow me to chip in.
You should arrange your spreadsheet workbook in a logical manner, for example, have one sheet for financial statements which could be called appendix 1, another sheet for ratios or kpis used which could be called appendix 2 etc.
you dont have to reference absolute figures like revenue in 20xx $20m, tax expense in 20xx $5m or eps in 20xx $1.3 per share, as the examiner will know these figures are from the financial statements of the organisation(s) you have refrenced in your spreadsheet.
However if you find that you will be making variance comparisons of key FS items like profit,assets, expenses etc. It will be a good practice to calculate their yearly increase/ decrease in a seperate spreadsheet (e.g Appendix 4). so that you can reference ‘(Appendix 4)’ after such remarks.
Hello tonim,
Q1 – I believe you should already have a sheet in your spreadsheet appendix document that contains the financial statements of your company and its comparator, which is just a duplicate of the fs in the annual reports, that u have used to show some formula application. You can export this sheet to a pdf file. Provided you make a reference to the annual reports on the page, this will be fine.
Q2 – you only need one spreadsheet document, but arrange your information with multiple sheets, e.g one for ratios used, one for the graphs used in your report, one for financial statements etc.
You may compile the financial statements in such a way that you show figures for each year side by side, and the fs of your comparator can come below in the same manner.
A balance sheet and income statement should normally be sufficient, but the depth and direction of your analysis could lead you to include critical notes to the fs, or other financial statements.Q3 – I’m not quite sure a survey is appropriate to topic 8 as this is predominantly a secondary research topic.
You may however (at your discretion) freely analyse already conducted surveys in your report, or choose ratios from a number of unique or customized key performance indicators (such as industry specific ratios) other than the generic financial ratios. If you intend to make your work stand out.Q4 – your presentation should not be done in more than 15minutes!! and with no more than 20 slides, markers will be able judge this from the bulkiness of the slides, always used less words where possible and let your graphs do the talking, only include the most relevant information in an appropriate structure.
The script is not necessary.Hey msg4wale , thanks for including me among this forums great mentors.
I try my best.
1) you will find that this is an inherent drawback with this topic, it is very difficult to find perfectly matched companies. However, this does not have to be an issue. Close enough is good enough, its your depth of evaluation in acknowledging such weaknesses that counts. As you will be comparing in relative terms like percentages, size should not be an issue. Perhaps you may consider using the underdog as your main , as a change of perspective may make the evaluation more focused.
2) Interesting question.
The use of Lifo and fifo will much likely have a significant impact on key financial statement items. Depending on your project objectives, you can get around this without making adjustments (provided you include sufficient explanations). However, it would be best if you can do the painstaking work and make the adjustments, assuming you have sufficient information. You will most likely be rewarded for your efforts with a higher grade.3) This depends on your research objectives, typically it is good to include at least one ratio from each category of financial ratios, profitability, efficiency, investor etc. However if you feel that your objectives would lead you to include more ratios on a category or exclude the category totally, then go ahead.
4) No.
If you research the reasons behind the possible merger, you may be able to gain insights that would strengthen your business analysis.
You will find that once you begin to enhance your analysis by juxtaposing the results of your company and its competitor, the latter’s analysis will equally be better.
It is impossible for me to say whether your competitors analysis is satisfactory without seeing your rap.
As your markers comments have been open-ended, work on the fundamentals discussed in earlier posts to remove any doubts.
Help the marker , to help you pass.
Yes, submit all the documents that have been affected by your changes, including an extract of the financial statements that can be exported to a pdf from your excel sheet.
For your part 2 fail, apply the following guidelines
An explanation of the accounting and / or business techniques you have used, including a discussion of their limitations.
All business models/accounting techniques need to be clearly explained here (and referenced to source), and their limitations discussed, so the marker can see the student has a good understanding of them.Hi
1). It should be PESTEL first, then SWOT then ratio analysis.
2). Yes you can, you can put it in a separate section before the pestel, swot and ratios under the headings company profile, comparator profile, company description etc
You may also choose to put it along with your choice of company and reasons for choosing in earlier parts of the report.
3). There’s no definite answer to this question , as it will depend on the authors choice and project objectives.
If for example your project objective was to ” assess the financial strength of ABC” one could argue that an analysis of profitability, liquidity, gearing and efficiency ratios will all be beneficial to achieving this objective. Another author my instead choose to accomplish this objective by using only profitability and liquidity ratios backed by a strong critical swot analysis.
On the other if your objective was to “evaluate the profitability of ABC” , one can see how a strong analysis of only profitability ratios can successfully achieve this.
If you feel your words would be better spent on the business analysis, and your objectives will still be met, feel free to reduce your ratios.
I did only 6 and I passed.
A debt equity ratio is a ‘type’ of gearing ratio.
4). True, ratios like current ratios are tricky to explain, in this case you may choose to use a part textbook approach, which is somewhat generic. However, be sure to add a supportive narrative from the business analysis and or an external source.
If you find that the current ratio is worsening, because of an increase in current liabilities like accounts payables, could this signal cashflow problems? linked to inept management ? Who are not responding appropriately to certain pestel issues?….
15 times is not too bad if it is used strategically, such as in places where the point that is being made is supported by external references or enhanced by your own criticisms.
5). Again, there is no definite answer here.
If you choose a suitable comparator, you will find that the pestel analysis will be very similar for both companies. There is not really a ‘perfect’ comparator in topic 8.
You want to be comparing and contrasting the different strategies of the companies against their results for a strong analysis. You will find that you may be focusing more on some areas than others, to help with this try and understand the strategic objectives and mission of the companies.
4). True, ratios like current ratios are tricky to explain, in this case you may choose to use a part textbook approach, which is somewhat generic. However, be sure to add a supportive narrative from the business analysis and or an external source.
Hi
1). It should be PESTEL first, then SWOT then ratio analysis.
2). Yes you can, you can put it in a separate section before the pestel, swot and ratios under the headings company profile, comparator profile, company description etc
You may also choose to put it along with your choice of company and reasons for choosing in earlier parts of the report.
3). There’s no definite answer to this question , as it will depend on the authors choice and project objectives.
If for example your project objective was to ” assess the financial strength of ABC” one could argue that an analysis of profitability, liquidity, gearing and efficiency ratios will all be beneficial to achieving this objective. Another author my instead choose to accomplish this objective by using only profitability and liquidity ratios backed by a strong critical swot analysis.
On the other if your objective was to “evaluate the profitability of ABC” , one can see how a strong analysis of only profitability ratios can successfully achieve this.
If you feel your words would be better spent on the business analysis, and your objectives will still be met, feel free to reduce your ratios.
I did only 6 and I passed.
A debt equity ratio is a ‘type’ of gearing ratio.
