Please vote in our Instant Polls about the ACCA P5 June 2018 Exam
Post your comments about the ACCA P5 exam below
(comments will open after 5pm UK)
ACCA Forums
APM*** ACCA P5 June 2018 Exam was.. Instant Poll and comments ***
Post your comments about the ACCA P5 exam below
(comments will open after 5pm UK)
q1 was on performance report evaluation 20mrks was smilar and assessed in june 14 and in dec 2016 i think
(¡¡) write 3 performance measures not in the report with calculation ans justification (8)
(iii) value chain analysis measurement connected with the scenario (7)
(iv) big data analysis (risks and drawbacks) 11marks
q2 was on manager and divisional assessment (5)
(ii) assess if managers shall obtain annual bonus using R0I drawback and recommendation (14)
(iii) residual income - usefulness
q3 corporate failure
q4 was on suitability of incremental budgeting (13marks)
(ii) variance analysis and recommendation (12marks)
for q1 part (i)
what did u write for 20 points??
Hi guys,
For Q1 i I put around 10 points. They were small points like, it does not look cluttered and the rounding is good.
It was very time pressured and I was not sure what to put to complete the table in question 4B.
I also made a big error in 2ii with ROI. I put it as Profit after Tax / Capital Employed. So my drawbacks were wrong also.
What did you guys put for 4B and 2ii?
Thanks,
Paddy
I choose Q1 Q2 Q3.
Q1.1.
I write sth like:
- it presents with revenue to show company sizes, but no growth
- use $m to present so not messy
- have EVA, inline with aim
- ROCE is not good for service provider
- have EPS, but no share price growth
- no KPI on largest retailer
- Lack long term trend for listed company
- short term control, lack variance analysis
- no cash flow forecast for investment in new tech
- no measure on new tech and small web presence
- too many meaueres, but not really important
Q1.2. I suggest the following measures
- dividebd growth: 0%
- maker position ranking: 2018 5th and 2017 4th
- share price growth, but no info
Q1.3. Value chain analysis, I suggest
- HRM provide training to IT staff to make well use of web presence
- Procurement to conduct research on coat of new tech
- marketing and sales makes use of web presence with new creative idea after training to advertise to increase sales
Q1.4. Big Data
I define what each V is.
- Volume: collect info about customers, and provide promotion and discount to target customer
- Verocity: collect info from customer fast so can delight customers.
- Variety: info in different form.
Risk and challenge:
- data security
- no familiarity to new tech
- cost of it.
Q2.
A. Divisional manager performance:
- Green division manager that it is investment center, so control over capital investment and depreciation,
- Blue manager has a lot of uncontrollable factors like, no control over investment, political instability, factory closures, no these should not be included when measure his performance.
- in short, it's about controllability.
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.
ROI bad due to:
- short term measure so discourage capital investment
- not maximize sh/h wealth
- distorted due to accounting policies
C. RI
- positive RI increase sh/h weather
- short term measure, discourage capital investment.
- absolute measure good for decision making.
Q3. Corporate failiure
A. Argenti A score
It is qualitative measure. Score of 47 indicated at risk of failure.
The model cover 3 areas:
- Defect:
+ Management defect:
- Autocratic CEO
- Override control by bidding during FD I'll and everyone in leave
+ Accounting defect: No
- Mistakes:
+ High operational gearing 50%
+ Over trading: over use staff, long hours work
+ Failure of 1 big project: being sued by client and will result in big financial loss.
- Symptoms:
+ Decreasing ratio: not known, only high gearing
+ Frozen salary: no
+ Decreasing morales: yes, as staff work long hours and some leave.
B. How to improve:
- Change fixed salary to variable salary to avoid dismissal, so low gearing
- Convince staff to staff and go through tough situations together.
C. Problem of Argenti model:
- not suitable for service provider like LP.
* I don't have much time for Q3 at all. So this is what I could answer.
Wish I pass!
@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.
Billy do you remember the mark break down for q-3
@sokty said: Q3. Corporate failiure A. Argenti A score It is qualitative measure. Score of 47 indicated at risk of failure. The model cover 3 areas: - Defect: + Management defect: - Autocratic CEO - Override control by bidding during FD I'll and everyone in leave + Accounting defect: No - Mistakes: + High operational gearing 50% + Over trading: over use staff, long hours work + Failure of 1 big project: being sued by client and will result in big financial loss. - Symptoms: + Decreasing ratio: not known, only high gearing + Frozen salary: no + Decreasing morales: yes, as staff work long hours and some leave. B. How to improve: - Change fixed salary to variable salary to avoid dismissal, so low gearing - Convince staff to staff and go through tough situations together. C. Problem of Argenti model: - not suitable for service provider like LP. * I don't have much time for Q3 at all. So this is what I could answer. Wish I pass!Billy do you remember the mark break down for q-3
I found the Value Chain question in Q1 iii difficult and Q1 ii hard as I just couldn't think of anything that wasn't there.
What did you guys put for Q4?
I think it is 12, 7, 6 for Q3.
For Blue, I don't deduct depreciation and head office cost. So I get profit like $12m. I was not so sure either, as I did it last so I can comment in my calculations.
how did u get 15.3% for green and blue??
@sokty said: I think it is 12, 7, 6 for Q3.Thank you Billy
How was it even possible to score 20 marks on the performance report?! It was a hard paper!
same
uses the profit divided by capital employed for green but got less than targeted so i assume manager shall not be untitled to bonus
did this one wrong
I don't deduct head office cost as it is uncontrollable for both division.
I did deduct the head office costs as it was uncontrollable
@samie said: Thank you BillyU r welcome. Any idea to share about the answer?
@jax4671 said: I did deduct the head office costs as it was uncontrollableIf sth is uncontrollable, it is not fair to measure duvusional manager performance. Thus, u should not deduct it to arrive at controllable Net profit. Under the current bonus system, it just want us to use target ROI to compare, so calculate controllable profit if possible and get ROI to compare.
@sokty said: I choose Q1 Q2 Q3. Q1.1. I write sth like: - it presents with revenue to show company sizes, but no growth - use $m to present so not messy - have EVA, in line with aim - ROCE is not good for service provider - have DPS, but no share price growth - no KPI on largest retailer - Lack long term trend for listed company - short term control, lack variance analysis - no cash flow forecast for investment in new tech - no measure on new tech and currentky small web presence - too many measures, but not really important - Nonsense to compare between region A,B,C without any ratio - lack external benchmarking Q1.2. I suggest the following measures - dividend growth: 0% - maker position ranking: 2018 5th and 2017 4th - share price growth, but no info to calculate Q1.3. Value chain analysis, I suggest - HRM provide training to IT staff to make well use of small web presence - Procurement to conduct research on cost of new tech - Marketing and sales makes use of web presence with new creative idea after training to advertise to increase sales Q1.4. Big Data I define what each V is. - Volume: collect info about customers, and provide promotion and discount to target customer - Verocity: collect info from customer fast so can delight customers. In rea industry, 1 min late can dissatisfy customers. - Variety: info in different form like graph and table, processed and unprocessed data. Risk and challenge: - information security on customers - no familiarity to new tech for all businesses - cost of obtaining new tech, but benefits should outweigh, so Chiveb should not be duscoraged from investment.
@acca145 said: my answers are 90% similar of what Billy's wrote. Billy answers are slightly better.I don't know if I answer them correctly or not. I just write sth that came up to my mind at that time. I just know that I tried to relate to scenario as much as possible. Hopefully we pass, acca145! Anyway, you can share sth here if there are some points I miss out. I am so Keen to get exam results as soon as possible.
For Q2 b) was ask to assess if Green / Blue Manager get the annual bonus.
Anyone use RI to calculate?
RI = Profit - (CE x WACC)
Green : +$2mil added value
Blue: -$9mil destroying value
I must say the question is vague, though ROI is the current measurement, but it did not ask the students to assess with ROI, given that one board member suggested the use of RI and capital structure 50:50 with 8% and 16% on cost (I think equity and debt respectively)
Maybe i’m wrong also since the 15% KPI was set for ROI
First sitting of P5 and it's my last paper. Fingers crossed for results in July. Relatively simple paper today so long as you studied the syllabus extensively. Good luck to everyone.
In Q3 did somebody take in to account the fact that blue was closed for 3 months due to flood when calculating ROI?
I feel the exam went quite well, it was considerable easier than the March sitting.
Q1 was typical P5 question: analyse performance report, recommend measures, etc. I really liked big data, there was a lot to talk about, however there was always a risk of talking about business analysis (P3) rather than performance management (P5). I slightly ran out of time in part a and b, so I skipped part c, not sure what to write anyway.
Q2 was straightforward with lots of easy calculations and application marks. I think I repeated myself a littlevin part a and b, on why it's important to separate performance measurement for division and manager.
Q3 - skipped this as I didn't revise argenti score at all considering I havent seen it examined in past papers before.
Q4 was a question about evaluating the budget setting process at a manufacturing company. I wrote it's correct to use incremental budget as external environment is not rapidly changing + criticise not planning more challenging targets and monitor external environment.
Part b was about finishing analysis of material variance, wrote they need to break it down by purchase volume and price variance + planning and operational variance but wasn't sure how to do this.
Question also asked to give brief analysis of other variances like labour rate and efficiency and recommend improvement to avoid this. I had to keep this quite brief as I was running out of time.
Has anyone else attempted Q4?
Good luck everyone!
8y ago#27Q1 stumped me and i wasted alot of time trying to get my head around what measures would be good for the company, using the info given. Very poor time management on my part but was hard to answer part ii unless you had a good grasp on part i. Which i had practiced quite a few similar questions so not sure why i couldnt get my head around it.
Q2. Quite a few easy marks, but again felt i repeated myself on the use of RI/ROI. Mentioned that if RI was used the Green division would have accepted the investment dicision as the RI for the project was postive so good for division and good for Group.
Q3. Hadnt revised this subject so a definate no go for me.
Q4. Again a few easy marks to gain here if you knew about budgets. Also said incremental was good due to stable market however should be looking at cutting costs to maintain market share and improve profit margins, which isnt happening using the current budget system. Unfortunately due to my disaster of Q1 i didnt have time to do part b at all.
Definately a resit for me :(
8y ago#28Ok I made an error when calculating Green and Blue RI and ROI, in my haste I did the correct calculation on my question booklet when I was reading the question however under exam pressure I just wrote the incorrect calculation . I included the depreciation charge in blue and excluded it from green. Oh my gosh I can't believe I did this only when I was travelling home it hit me.
I really prayer and hope I pass this time all the efforts I put in.
8y ago#29So true
I thought it was a fair paper, although the wording was a little confusing in places.
Mine was a third time resit, following a three year break.
I was a lot better prepared this time round but still struggled. I panicked a bit and made some pretty basic errors in time management.
Overall, I'd be more surprised to fail than to pass, but the paper I wrote was pretty borderline.
Reflections on individual questions to follow.
Sign into reply to this topic.