[klaudiuszfp]

What did you write in Q1c performance measures and systems to simplify supply chain using value chain?
This was confusing subquestion for me. I proposed 2-3 measures such as time to market and wrote sth about abc costing nad BPR to simplifying processes but I am not sure whether that was what the examiner meant

[klaudiuszfp]

…using data in Appendix 1

Which is quite confusing confunsing and if read literally means that measures such as market position, share of online sales and other related to innovation and external environoment will not score well. Data in appendix 1 was mainly finacial performance and internal operations

[klaudiuszfp]

Does anyone remember numbers in Q4b? It was $1 difference in material cost due to supplier issues and $2 (or $1?) due to poor procurement?

[klaudiuszfp]

@sokty said:
Q2.

B.
Bases in current bonus system:
– Green manager should receive bonus, ROI Around 15.3%.
– Blue manager, not received because ROI is 14% due to different accounting policy on R&D capitalisation.

how did you calculate this 14% for Blue. As I remember they have 4m profit and 86m capital employed. There was no data nor hint to adjust these numbers for capitalised R&D at least as far as i remember.

[klaudiuszfp]

@fuzzywuzzy said:
Hi guys, I’ll post what I’ve answered here and hopefully someone gets the same answer.
[…]

Hi fuzzywuzzy
regarding 3b (valuation of propoerty) and 3c (leasing) I have the same answers.
For subsidiary held for sale I included separate lines for assets and liabilities from disposal group but I did not separate equity part.

3a (revenue) I considered conditions to recognize reve and concluded that reve should be recognized as base fee (41m) plus lower conditional payment i.e. 0.3m (3m*10%). I did not mention anything about discounting but conditional payment is within a year and potential financing benefit is immaterial. On reporting date I made no adjustments to recognized reve as 0.3m payment was still most probable (60% probability).

Question 2 was very weird.
In 2a (translation of a sub) I assumed that government rate is right as all business entities inlcuding this mentioned in the case may remit CF at this rate only. In part with average rate for P&L i wrote that as a rule FX rate from date of a transaction should be used but ifrs leaves some space and average rate may be used as approximation. However given the fact that FX rate changed only once it might be appropriate to transalte P&L based on this two separate rates as average may be poor approximation. In the end I noted that sub has only 2% of net assets of the group and is immaterial and average vs actual is a matter of usefulness vs additional cost of accurate calculation.

In 2b (leasing of commercial vehicles) I messed up. Now I think that depreciation period may be different from operating lease period and asset should be depreciated regardless if leased or not. One expection will be if after lease period asset is intended to sale and in such a case should be presented at net realisable value and not depreciated.

I 1c (NCI method) I assumed that NCI valuation may be changed retrospectively but now I am not sure. As somebody above mentioned perhaps goodwill should not be recalculated unless impaired.

[klaudiuszfp]

@skyisthelimit said:
Question 2: Co. Turnover, Market Turnover, Gross Profit
As StreetGold said, the GP Margin could be used to comment about the company’s performance but BCG you gotta calculate the market share and market growth with two other given figures.

SwiftDale Farm I got Cash cow and ballast business. Was about to write alien but so far the company had done well in the group and only in recent years that NCBP had decided to stop the finance resources being provided.
Insurance Co , Question mark and value trap business.
And the Pait Technology Star and Heartland business.

I seem to have messed up the rationales when I checked my notes after exam. 7 easy marks or part of it probably gone. -_-

Just theoretically in case a company has the largest share on stable or declining market but has negative gross profit figure it is still a cash cow? Cash cow has to generate cash. Besides, the general strategy for cash cow is to keep status quo, which is not suitable in case of Swiftdale Farm.

[klaudiuszfp]

@streetgold said:
For the Question 2, I pretty sure about my answer was correct.

The corporate parent NCBT was a electronic merge with another technology co
-the first co (Swiftdale Farm) is a cash cow with high market share and low market growth. it was also a allien biz under ashridge ( low feel , low benefit).

-the second co ( insurance) is a problem child/ question mark because he not holding the highest market share ( another competitors hold higher than it) and he has high market growth ) it was a value trap under ashridge ( low feel but high benefit)

– the 3rd co (Pait technology) which had semilar biz nature with parent is definitely a star with highest market share and market growth among the 3. Under ashridge it definitely is a heartland biz ( high feel and high benefit).

This is my analysis for questions 2. I just suprise that costing was appear in question 1 which is the only chapter that I skip, but overall this paper was ok and quite easy to attempt!!!!

Wish all of u can pass.

I Think Pait was actually low benefit because it was mentioned that it is doing well and has very experienced management, so limited opportunities to add value for ncbt. Therefore I chose ballast business.
For insurance business feel must be in line with potential benefit. Secondly i think that ashridge is used at the time of acquisition and CBB before and just after acquisition was very successful and needed no assistance. I chose alien business.

[klaudiuszfp]

@ahmedp4 said:
Hi All,

Can you please mention the areas of syllabus tested in Sep attempt.

Thanks in advance.

1. International project appraisal – calculation of NPV of a project in two alternative locations in different countries + some discussion on international trade organisations.
2. I don’t attempted.
3. Corporate restrucutring – calculation of P&L, balance sheet, CoE and WACC after restructiring + comment.
4. Intrest rate hedging using FRA, options and futures + some discussion on treasury department.

[klaudiuszfp]

Assuming that examining team expected solution based on bullet cash flow in Y4 with cash accumulated in years 1-4 is it a chance that I still gain at least half of available marks (9/18) for this point? I remitted only 60% and got 2 negative NPVs but described this in the report.

[klaudiuszfp]

@elie1lwin said:
i got 2 negative npvs too in ques 1. Not sure if its correct because i translate the $ investment for land & buildings & working capital into PP & NR to get Net cash flow & translate it back to $ again. Hope I didnt screw up. I didnt managed to finish the report but finished calculating both Npvs.

By the way, did anyone attempt question 3 its kinda like a reconstruction sum where we have to draw a new SOFP. I was wondering how everyone calculate cost of equity there.

The question give us beta asset, so with that we can get ungeared ke (ie kei) then do we search for geared ke with M&M formula? Or do we use kei in WACC formula?

Thanks.

I attempted Q3. Question provided Wacc, cost of debt and capital structure so all inputs to calculate cost of equity. Then you had to ungear equity beta and calculate asset beta of cinema business (asset beta of fitness clubs was given).

Regarding Q1 I have also obtained two negative NPVs, which was little bit confusing. Assuming that maximum remittance was up to 60% of taxable profit (I also assumed that at the end of the project remaining cash flows will not be recoverable and are “included” in salvage value) the result couldn’t ve positive. For me this question was unnecessarily complicated because calculations were not sophisticated. I wasted too much time on this question and wasn’t able to finish 2 optionals..

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