*** ACCA P5 December 2017 Exam was.. Instant Poll and comments ***

I needn’t mention the economy, efficiency and effectiveness brouhaha, but was direct in linking them to the main objective of the organisation- TRH and was able to explain if there was value for money based on the objectives of the organisation. Remember it asked what performance measure could be applied….

Hey guys ! How can one get the questions ?

Anyone else found scenario for Q2 messy? From reading question requirements, I was confident about what examiner is asking. But in order to relate requirements to scenario, i spent too much time analysing it. Any tips how this could be avoided? Or was I just tired after Q1?

I think I said gearing and profit margin bad at showing capital utilisation as gearing just shows the amount of debt relative to equity nothing about how it is utilised and profit margin just shows profit relative to revenue again nothing about how capital is utilised. Said roce would be better as shows how effectively capital employed is turned into profit.

Said exactly same for brand awareness

For c) I talked about life cycle costing and how cant determine the success of new products in introduction phase when revenue not at full potential and costs still high for establishing. Then noticed also in split out of costs the fixed costs of employee training had been included in cost of new products but these were fixed and so not relevant

Q1 Financial perspective – I also commented on ROCE being better at measuring overall objective. For GPM I suggested it should not be in internal business perspective but financial perspective, as a measure for sales department only. Customer perspective – I commented that market share and brand awarness were good measures, showing how exactly they link to overall objective of the company (market share – sales, brand awareness – higher prices). In next requirement on innovation and learning, you were supposed to calculate measures in Appendix 2 and assess actual performance. For new product lines, they seemed to underperform, introducing only 2 lines in past 4 years. But info about competitors performance on new product lines was missing to confirm that. As for time to market, it was stated that new product line Solar TV was expected to be implemented in 3 years. That seemed to be too long. But again, competitor benchmarks were not presented.
I think requirement b) was asking about practical steps to implement BSC. I suggested steps like implementing new IT system, training employees.
Q2 – Part a – I commented on barriers of entry as CSFs and linked them to KPIs. E.g. prices of land and buildings, market share, operational gearing.
Part b – I commented on tunnel vision, because managers were only evaluated by profit margin. Improvements suggested like generating management reports and rewarding performance on other measures.
Part c – risks of loyalty system were high purchase cost 4m vs 2.4m annual profit, extra cost on system for interpreting data, employee related costs, sales from restaurants not recorded (risk of fraud)
Q3 – I commented TRH overperformed on economy because they did not exceed salary bedget. As for efficiency I started to calculate salary per patient and ran out of time…

Risks I wrote…..the method is inward looking….lose of customer data…..discounts will just lower the profit margin those they increase sales but cr won’t be able to cover costs….and mother nonsense like that

Question 1: Balanced scorecard. there was nothing difficult about it. part A was
testing the basic understanding of candidates about this. 7 marks for this..quite generous ! the rest of the requirements were similar to the other past papers. nothing strange or difficult. the scenario was easy understood , not lengthy. i enjoyed most, this part of the exam.

Question 2: KPI ‘s , performance measures, Loyalty card. Again, nothing hard. very practical question.

Question 3: Non profit organisations. this wasn’t tricky either. budget constraint management style.. which is not appropriate in such organisations etc.

Overall very fair paper , questions were clearly structured. no tricks and the examiner was guiding us at times to avoid writing irrelevant answers. all the questions could be answered without any knowledge of the theory as long as done in a logical way. this is what i say about P3 as well.. use your logic, this is all it takes. after all theory will score maximum 20 % of the marks if done 100% correct.

General point : P5 in my opinion should be compulsory as this is the value added part of ACCA.

Good Luck to everyone !

Yes there were, which was required in finding 3E’s measures.

For Q1 – What about suggesting EVA as a financial measure? As the aim was Shareholder Wealth Max?
Also for Q3b) – for Efficiency (as oppose to Effectiveness) – what about the % of patients seen first time?

@arront1986 said:
I also suggested EVA or EPS, I think I suggested to choose EPS and get rid of gearing (was a constraint of 2 measures per perspective). My understanding was (correct me if I am wrong) that gearing is more concerned with long term borrowing, which there wasn’t any because Saffron raised capital for funding from a share issue.

Efficiency (maximising output from the input) I chose number of patients seen per doctor, compared to the national average.

Economy (minimising cost of input) I chose average doctor’s salary, compared to the national average.

Effectiveness (the impact) I chose number of readmissions compared to national average, higher readmissions =lower effectiveness.

My evaluation of the performance against the 3 E’s was (summarised):

Increase in readmissions = increase in patients seen per doctor.
Increase in patients seen per doctor = more hours unpaid overtime worked.
More unpaid overtime worked = lower doctor job satisfaction (was 9% in comparison to 89% national average!).
Lower doctor moral + increase in patients seen per doctor = decrease in quality of service.
Decrease in quality of service = increase in readmissions.

All in all, a vicious circle. Steps need to be taken to try and reverse this.

Non of the objectives were being achieved;

Patients have access to access to high quality treatments (the quality of service is low so not being acheived)
TRH delivers VLM (not being achieved due to readmissions)
Innovation in to developing medical practices (not being achieved because all time is being spent treating patients)

Thanks Arron 🙂 Yeh similar comments also except I think I made error as I did number of readmissions as Efficiency to show if they are maximising output etc…hopefully I still get some marks?? I then used the satisfaction % as Effectiveness? Think I may lose marks for this part…Can you remember how many marks this part was?

I didn’t use the cocoa per ton in the expected value calc.

I would of used it as part of the answer to ‘problems’ with the method but didn’t have time as rushed to next question

Wrote about the inability of the system to be used to bench mark competitors, data loss is a risk, reduction in profits if discounts are given to increase the market share