APM*** ACCA Paper APM March 2019 Exam was.. Instant Poll and comments ***

APM!!

Yes. There was no enough time to answer all the questions properly.

Very little time to respond çonvingly..

Did q3 first, then q2 and left q1 until end...misread question however under pressure and treated investment as shareholders...will I get marks still?

Did anyone get a really big negative EVA figure? The capital employed was around $94m but the NOPAT was around $1m, therefore it was a ridiculous calculation?

That is music to my ears, thanks johnnygsy!

I'm gutted.. that went horribly. Once I had messed up the first section of question 1, I just lost all sense and the rest of the exam was a disaster. This one is a definite resit. Now the decision is, do I resit this in June, or take the others as originally planned? Why on earth did I pick this as on option?

Hi have something of a negative 8.8m EVA. I'm surprise not much adjustment needed for any doubtful debt, accounting depreciation other than adding back: Finance Cost 70% x $xxxx Non Cash Expense $110k R&D void for 20X4 $500k but, 75% in 20X5 which is $375k Less Economic Depreciation $1m+. I didn't find any accounting deprecation C/E: using the beginning balance around $83m - $85m only added back non-cash expense again $110k WACC slightly above 10% (ke 14% x 65/100) + (kd 4.5%(1 - 0.3 tax) x 35/100 just hoping my workings gain some marks even though the end result might be wrong. but i thought about it, since Vultures Retail actual earnings is already Net Loss after tax, i don't think i should have positive EVA in the light of it's restructuring process and R&D cost for the artificial sweeteners, but who knows in future government might may more attention to raise tax again? nothing is guaranteed. If the board is rightly imagine about the fortune of Vultures, then investor might hoping to see a positive EVA in future. Evaluation of EVA. Merits - adjusted to cash flow, hence unlikely subject to manipulation on accounting profit - absolute value translate creating or destructive value - comparative data for year on year basis if consistently used to track company performance drawbacks - in reality there's 100+ adjustment, so it can be time consuming - Not comparable to other business in the same industry of the different sizes - short term focus rather than long term, subject to tunnel vision if using this measurement alone to make decision

Can anyone remember specifically how they answered the question on EVA? I took operating profit then + non cash expenses ($200k i think) + 75% marketing spend ($337.5k) + accounting depreciation (both values) - economic depreciation No tax paid For capital employed i took opening bal then + accounting depreciation + Prior year marketing ($500k) - Economic depreciation For WACC I got 10.2% And calculated EVA as something like -$7.7m

zhixiang85 - that's exactly how I calculated it, however I was second guessing myself a lot as I hadn't seen a negative EVA that big in all the past papers I went over! Glad to have confirmation that I was along the right lines, cheers.

bennet846 - I did tried to spot if there's some figures i can sort of "revived" the EVA into positive figure, but the question has too little adjustment and C/E is already at $9m at least, hence it is unlikely NOPAT will enough to tank the C/E deduction. Any positive EVA might become contradicting because Actual P/L already showing a $500,000 net loss after tax. EPS if available will be negative

For the CE I added back the previous years $500k only, not the current year NCE of $110k

yea, EVA was negative, CE = 93,8 - opening+0,5 Marketing costs (long-term) fo 20x4 = 94,3 NOPAT = 0,3 mln + 75% marketinf+ finance cots (1-30%)+ 10 mln non-cash+deperc 1,3 mln ( i took only first) - economic depre 1,9 = aprox 0,5 mln WACC=10,2% Eva = aprox - 9 mln What about Q3, 3 E - what did you write?

I spent a lot of time for q1 ((( esspecially for i) Less time for Q2 and Q3, What's limitation to use ABM you wrote in Q2?

To be honest it wasn't too bad. The biggest challenge is still time management, it is not possible to answer fully in time allocated..

School 1 for better Economy and then School 2 for better Efficiency and Effectiveness

Elena - the ABM was my weakest write up, given time-pressured i was trying to read the case fast, but kind of information overload when case starts to mentioned the different material used for product type, customer type, and the new bespoke type. Thankfully the examiner did not provide another appendix filled with numbers for calculation. as far limitation i had written 1) time required for staff to train moving from existing costing system to ABM, can be demotivating process 2) time consumption and complex due to the types of product and customers 3) historical data might be unsuitable to migrate into new ABM because of it's existing format, difficult to break down into related activities 4) without investing into IT software, it would be too hard to handle for the amount of volume 5) the cost to upgrade might be more than being beneficial, if further need to engage with external expert - outsourcing.

I thought Q1 was fairly standard and self explanatory, negative EVA as expected given recent poor financial performance. Q2 and Q3 very time pressured due to detail in question. I don't know why ACCA continue to make these 25 mark questions unnecessarily long. I was surprised that corporate failure never came up given that it wasn't in the December exam either!

Qn 3. Effectiveness School 1 wins - actual achievement vs expectation. later part on League table issue, there's possible of 'gaming' due to different marking scheme. most lenient marking scheme could have generate high achievement than strict marking. Efficiency School 1 wins - 57 students per teacher compare to 5 students per teacher in school 2. but again at a cost when school 1 teacher has to working 45 hours a week and the same salary as school 2 teacher, there in exchange of teacher satisfaction ratio and turnover Economical School 2 - Staff x Average salary there nothing in the league table displaying the rating for school meals, recreation facilities and living condition. The parent's are confused by the league table itself because it's difficult to prioritize. the highest amount of enrollment in school 1 could also due to geographical factor (accessibility to public transport) instead of the true credibility of the school - hope i didn't write rubbish for this one.

Transfer Pricing was my weakest topic and i was glad it didn't came out :D

@chullbulla said: I used budge numbers due to time pressure for EVA will I still get marks for something?

I'm not an expert in marking but I am sure you'd get marks as choosing what to adjust & formula should gain marks . If it makes you feel better , I made similar error in a different ACCA exam ( using wrong set figures) and know by my results I didn't lose that many marks. Time constraints are ridiculous in option papers .

Q1: integrated reporting requires also non-financial data that they are absent from the report For the stakseholders how did you approach it? I used the matrix keep them happy, informed, key players etc. Q2: ABM & ABC is more appropriate than absorption costing currently used to evaluate which activities create value and have a better pricing for the products. However additional costs raised from ABC implementation and also due to the different markets the approach is different. Where the product is anyway expensive, then the costs raised from the ABC implementation do not worth taking to achieve a better pricing. Q3: To use the league tables to benchmark the schools with so different activities (students with less abilitities and art school) would not result in a correct benchmarking. In addition the choice of the school depends also on the area of residence. Even if the 3 schools were ranked high it would be difficult to attaract new students. It's my last one, second time , fingers crossed! however, the style that the examiner wants us to reply difers from all the other acca exams that you have to write the story of your life! you never know if you have passed this one!

I did, but I think the marketing from the year before should have been added to cap employed, and also I missed depreciation on right of use assets. At know i got most of it wrong

Hi everyone. I am putting down bits that I wrote in hope that others have written something similar. 1) No non financial indicators and part of the mission had non financial objectives. 2) Did not really measure the growth in value. 3) No forecasts for example for website sales. Should split these from revenue. 4) layout in 000's however clear and simple to understand. 5) Detailed costs would have been more appropriate for operational decision making and not at the board level. 6) no narrative explaining big deviations in performance. 7)No preferred supplier external information. 8) No details about capital despite the refurbishment being such a big project, b) i ran out of time. c) the management team were key players and their objectives of growth should be measured. employees-minimal effort lenders keep satisfied and gearing information would be useful health groups-keep informed. d) eva of -8.9m and adv and disadvantages, destroying value for the business. q2) :0 q3) economy is the average salary per teacher. 84000 for school 1 and 2. Above national average so is not economical efficiency is the number of students for each teacher- outputs for the given inputs. think 32 for school 1 and 5 for school 2 so school 1 appears to be more efficient. effectiveness- actual-expected/expectedx100 both were lower than the national average which means they did not achieve their objectives. conflicts within the 3e;s to increase effectiveness, the school might need to hire more experienced teachers which means economy would go down. b) league tables require a lot of staff and hence costs. - does not take geographical regions in to account- salaries higher in these regions -different subjects taught - weighting for the ranking is subjective. -demotivates students -doesnt take in to account the context in which the school operates for example school 2 is for students with learning disabilities or something along these lines. It would not be appropriate to have to many students in one class. - funding is reduced based on rankings however for example school 2 may look like it is not effective in achieving its objectives but the parent satisfaction is 99%

i did the same mistake and not worried ! May God all-mighty bless all !

This was my 6th attempt.

Hi, Did anyone do the mendelow chart? I wasn't sure about the management being in there and I removed it from it. I had never seen a stakeholder chart with management on it but I may be wrong...

I no longer know how we are supposed to answer questions in APM exam. I used a countdown timer to write non-stop for 45mins copying out the tutorial answer word by word and I always came to the conclusion that I would only make it to 50-60% of the answer of the exam kit. That means the answers they produce are much much longer (not just a little bit) than what you actually need to write in the exam. Trouble is that it's difficult to make our answers shorter because if we don't explain our points deeply enough, that's why we will lose marks. Equally we lose marks by wasting time if our points are too lengthy. You can't win with this paper............

Hi chulbulla, I did but not sure if it was appropriate. I defined ABM.in a I mentioned strategic ABM and how the company can use profitability analysis to identify profitable customers and sell at higher prices to these. - ABC gives you more accurate costs and non value adding activities/features in the product can be reduced or eliminated. Absorption costing which was currently used does not allocate costs based on drivers (there was a whole sentence or two I took from the question). In b) ABC needs more info on costs and this is costly and time consuming. The system would need to be updated to retrieve this info. For Windows it's best to use absorption costing as it is a standard product in a competitive market. For conservatories -abc as they are bespoke products and each one will have a different cost and hence a different price will be charged for each. Something along that line. I really rushed it.

I forgot to use 65% as equity when calculating the WACC, i used 35 in both cases. How much marks would I be penalized for such mistake? I'm not getting any sleep as even 1 mark could be decider which was the case in my last attempt with p5 ended up getting 49