SBL*** December 2021 ACCA SBL exam – Instant Poll and comments ***

Was relatively ok felt less pressured than mock attempts just struggled to see what overall issues Achilles had other than less profitability which seemed to be due to not increasing prices while costs had increased. 1) Operational comments I think I did ok but didn't use any models. Comment on financial results and position was hard and struggled to write anything meaningful. Used SAF to evaluate the different proposals but was quite tedious doing SAF 4 times over and not sure that's what the marker wants to see. Also found the risk manager role & responsibilities quite tough to score marks on. Performance excellence on the slides I had to use alot of common sense. Generally found it hard to link to the exhibits when answering questions.

It wasn't difficult or tricky but I run out of time and left last question incomplete. If I pass it will be by just luck. :( Never mind, we'll see in few weeks.

First question struggled with operations - clearly though they are spending more on marketing to maintain their current customer base - sales increased but prices didn’t increase. Lots of good tangible assets to make acquisitions, interest cover increased, current stayed the same etc The second question on the spillages risks - reputation, environment, regulation, legal etc that was straightforward. Sceptism on the acquisition wasn’t too bad Big data wasn’t bad to finish either.

The acquisition I Kept saying request management accounts as they gave little info For sources of funds, equity, loans ICO and p2p Put maybe avoid buying shares as P/E ratio seemed to be overvalued though needed to compare against others

Totally agree to the comment above. The questions overall were not difficult. However, I overrun with time with Q1 and then hastily answered the rest of the questions. I guess, I would have written more relevant points if I hadn't lagged behind with Q1. Q3 was a bit confusing, and I couldn't i The case was about premium customers cruise ship company: Q1. (a) Evaluate financial and operational perfromance based on PL and BS (b) Change in corporate governance arrangements Q2. Assess strategic choices Q3. Risk manager for food quality in the ship, risk awareness Q4. Baldrige model of operational excellence - to prepare 2 slides on why operational excellence is important and how to achieve it.

Seemed to be a fair paper overall. Did anyone use the Balanced Scorecard model to assess the operational and financial performance in the first question? I didn't use Baldwin's Performance Excellence due to q4 being solely focused on this

Mine had big data And a oil slick Did the operation part of question 1 rely on reviewing the accounts only

It seems that there have been different paper variants. For those who have Q3 to evaluate sceptically the possible acquisition of river cruise company, one question. Do yo find any info about acquisition price? I think that such info was not included in the exhibit. If such acquisition price is missing, this is good point to be sceptical. P/E is worth if compared to industry, but such info was missing. Also the financial data was just for the previous year. Nothing for the current one.

The PE was key on purchase price mate You needed the pe of competitors to know if the P/E ratio was comparable of the industry or the company was overvalued

I spent way too much time on question one, I think my attempt at task 2 was good and for task 3 I think we had to value Rabinus Rivers using P/E ratio,FCF diVidends and comment on how suitable it is for acquisition and then suggest the methods of financing the acquisition, I didn't get to question 4 as I ran out of time ???I feel I could have passed if I did!!!

That’s not what I thought about the riverboat company I thought we had information from the company on figures, but we had to interrogate them using sceptism One years figures isn’t enough Average sales price what’s the average made up of ? Profit margin but what’s this done trending wise Net assets figures hides any debts of riverboat firm Achilles has well paid motivated staff nothing on staff of riverboat - culture clash Nothing on lack of experience of purchasing firms Pe suggests firm is overvalued Overpaying dividends - high shareholder expectations That’s all I got for it

You didn’t have enough information to do calculations in my opinion I think it just wanted options imho

Guys i also got same cast study of Achilles Cruises listed company of Norland, despite i practice many mocks but still i find this paper tough enough to pass, by way i complete my whole paper on time but can't say anything what i wrote in my paper. Fingers crossed. Task 1 req(a) Financial Analysis of Performance of operations Req (b)Arrangement of Governance structure and improvement if needed. professional marks on evaluation skills and analysis skills. Task 2: Req(A) Risk occurs due to spoilage of oil Req(b) Analysis on Stakeholders and recommend Startegies which company will take. Professional Marks on Analysis and evaluation Task 3 Req(A) Analysis on acquisition of Robin Cruise ship Company. Req(b) Factors to consider for funding strategies. professional marks on professional Skepticism Task 4 Two Presentation slides on Big data analysis on the improvement to Current Business Operation and further funding importance. Professional marks on commercial acumen

Hi mate I don’t know if my governance question mentioned strengths it just said suggest improvements NEDS Diversity of the board Board members been there 8 years I missed internal audit. Made a few points how two tier board may improve governance

I think the extracts were very limited on the information, I have mentioned diversity due to all directors previously worked in the same industry. Mentioned different backgrounds for the potential new board members.

Didn’t it say all directors were all associated with the ship industry no one had any outside experience

I think there was a line after CEO details , mentioning they all from Ship industry

Overall I found the paper to be fair, but I had to rush in answering the question on assessing the proposal on the Riverboat company with only 12 minutes left to answer the 24mark question. I hope what I jotted down was enough to earn a few marks which could add up to a passing grade.

I forgot to click end button after I finished with exam. Is it ok if I didn't click the end button?

Was there a model for evaluating operational performance ? I just took stuff from exhibit and elaborated on it with no structure. For the governance question I wrote about appointing a risk committee, increasing NEDs, increase diversity and include people with financial background. Roles and responsibilities of a food hygiene manager was mostly text book for me but we had a large exhibit on food poisoning just couldn't find anything relevant to the question which really worried me.

Got the Achilles case and found the case itself to be fairly straight forward, but the amount of hints in exhibits to support the tasks appeared relatively limited which is what drives it challenging. Task 1 - Operation - board want to 'learn more about operation' - felt unclear what exactly question was after. Attempted various angles including the generic strategy, porter's value chain etc. - Performance - a) no price increase but increased revenue hints improvement in occupancy ratio? - driven by increase marketing spend but whether this is worth it given the already high occupancy ratio. b) what's driving cost increase? - poor cost control? higher depreciation as seen in increase in fixed asset? c) higher interest > despite plenty of bank deposit > should explore why? d) overall low level of ROE / ROCE / Profit margin, reduction in these. - Financial position - a) high gearing but due to nature of industry - no industry comparison. b) strong working capital thanks to strong procurement (AP) and customer booking system (deposits)? c) plenty of cash surplus / current ratio > can be better utilised? Felt in general not a lot to talk about. - Governance: Strong points: some NED, NED in 3 committees Weak points to improve: lack of NED, lack of risk committee, 8y board. Why independence and NED is important for good governance, in light of being a listed company. Why best to recruit NED from other industries. - Felt definitely missed stuff for this question - could have probably talked about CEO's role in governance maybe? Task 2: Options: Started with FAS criteria then half way through realised we can also perhaps use the Ansoff matrix. Basically talked the pro/con of each Ansoff sections in conjunction of source of funding. Recommanded the partnership approach and talked about risk of partnership. Task 3 Role of risk manager: - Design, implement risk control > food hygiene procedures - Monitor risk with designing risk indicators - Support to manage risk > e.g. press release - Support to identify risk and advocate risk culture - Deal with insurance comp Also talked the catering manager is not suitable for the role as not capable of doing some of above. > probably should have talked the need for training etc. Task 4: Why achieving performance excellence is important for Achilles and how to use the Baldrige model to achieve this. Mind was blank with this one as didn't focus on Baldrige model in study and there's barely any supporting exhibit for this. Tried to talk about the need to explore into all areas to support strategic success - especially how Achilles is a differentiation model, model supports this by promoting integrated thinking. > Then basically tried to use common sense on how each element is relevant to the company... Was also conscious have mis-spelt Achilles in several ways multiple times...

For the strategic choices I was annoyed alot of the challenging of each option was done in the exhibit. I also recommended the river boat cruises but advised strongly against the partnership model. Not sure that was a good exam response by basically throwing out all the options presented and then giving my own take on it. Hope the marker accepts that.

so what was your exam technique please

Hi ryan. I did the same by challenging the existing financials by stating that there were just not enough in part 3bii where it said to evaulate the existing proposal Can u tell u what was your requirment?

Exam was ok.. I noticed that borrowings was higher than sales revenue, high gearing so that would've made an impact on financial position, raising finance etc.. Anyone else pick this up? I fee i focused more on negatives and didn't focus on any positive's so will get marked down, hopefully get to the 50% though :)

Im not sure how I did but answered them all. I struggled massively on the big data question and didn’t find the extract provided helpful. What did people put for the big data answer? I always use the same exam technique and am always left with extra time. For SBL I did the same as normal in technique but obviously this is a different style so I had to tweak it. In the 10 minute intro page before the exam I get my bit of paper and do a table headed with question, mark, time, time to finish. I gave myself 30 minutes reading and planning so time to finish that part was 3:30 left on the clock when I know I have to start the questions. I then in the 30 minutes look at the requirements and right down each question number and mark (not including professional mark) and calculate time per mark by multiplying by 2.5. Then calculate time to finish each question. This gave me 10 minutes remaining at the end. So if part 1a was 12 marks 4 prof marks I’d times 12 by 2.5 to give me then time for question and then work out time on countdown I need to finish by. Then I read through the requirements and split it by my role, audience, format, prof skill and task for them all and fill in that info. Then I started reading through the exhibits to understand what was going on and fitted the info in to the requirements so I knew what exhibits to use for each question. This took my 30 minutes. Then I started answering the questions and made sure when the time to finish was reached I would move on even if I hadn’t finished. I ended up finishing with 30 minutes spare, though I did struggle with what to put for the data question. With my last 30 minutes I went back to any that I thought I could expand on. Writing marks, time for questions and time to finish each question has massively helped me with time management and I’m always left with time remaining. Hope this helps anyone. Good luck all

All by all, a fair exam I think. I got the case with Achille's cruise Q1a) ops and financial evaluation ops- 1) they are operating in a niche market 2) they are structured in a divisional system with each vessel being one division 3) well automated and procurement centralized Finan Still profitable but 1) liquidity decrease 2) gearing stable but high 3) Margins 4) interest cover at 1,21. No increase in loans but due to increased costs and stagnation of sales the margins are decreasing and most of the PBIT is abosrbed by finance costs. It is a strategic drift Q1b) Governance question with five or six points 1) more NED's 2) more nimination of directors (8 years is too long) 3) appoint a chairman, two other points I don't remember Q2) evaluation the different strategies proposed 1) build more vessel 2) buy 20% of bigger vessel 5000 people 3) to let run existing fleet in new destinations so they can work longer than six months 4) river cruises with an alliance I think 1 and 2 are definitely out, need big investments, no debt as high gearing and also no issuance of shares as the institutionaal investors are already pissed off. 3 could eventually be possible if it does not infrange maintenance (limited option). Most suitable option 4 as it does not need high investment and it allows to diversify.

Q4a Why is excellence perf important for the company 1)reputation 2)profitability 3) best services to customers + notes Q4b) HOw to implement for company? Here I took each of the Balridge points (leadreship, strategy, customers, etc...) and gave an example for each. Not sure if that is correct.

I agree with your points just with the river cruise option going with a partner seems to allow little scope for additional profit and yet huge reputation risk. Seems like same exam on me what did you do for the hygine risk manager roles and responsibilities? Or the slides regarding balldridge model found that trickey?

Overall a reasonable exam. I didn't use any model which was kind of weird (except Baldridges performance excellence where it was asked for and given). Evaluating a Risk Manager was a nice addition though, But the rest of it felt like common sense.