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Overall, quite good and not a heavily model reliant exam
50 mark question on budgets -> Picking appropriate budget for 4 divisions
Discussion on ABB
Preparing a rolling budget
25 marks on results and determinants and appropriate reward systems
25 marks on Porters 5 forces and appropriate KPIs, and risk appetite (VC vs management) in relation to project selection
I got 50marks of EVA with 6marks on barriers to entry.
2. Building block model 12 with ESOS for 8 marks
3. Honestly can’t even remember im, still trying to recover from the shock of the 1q tbhSame as me! Q3 was on benchmarking and BPR.
I know my EVA calc in Q1 was way offSame for me with EVA think it was way off but at least tried probably had one or two things in the wrong place
Do you know if we can score any mark for the Rollinng budget calculation if we forgot to add the next quarter?
Absolute disaster for me. Got stuck in the time trap of Q1 when I should have moved on. This was a resit today and I actually feel I’ve scored lower than the 44 I got last time.
nighteyes wrote:Absolute disaster for me. Got stuck in the time trap of Q1 when I should have moved on. This was a resit today and I actually feel I’ve scored lower than the 44 I got last time.
I was the same with Q1 had to move on thought I would have time to go back at the end but didn’t had to rush it
Same here 3rd time sitting it hoping professional marks push me over 50mamanhussain wrote:Do you know if we can score any mark for the Rollinng budget calculation if we forgot to add the next quarter?
Yes you should, I don’t remember if the question was to prepare a full rolling budget with a new period or simply to recalculate and update the current periods
For me the worst questions were:
– responding to employees comments about EVA – maybe it wasn’t terribly hard but I don’t really get it how it can be awarded 15 points for that. Also 2 of them were quite strange – if Eva can be caluculated for single product (how to even expand this point) and how employee can increase Eva which I find quite strange question.
– how eva helps maximising shareholders wealth (I wasn’t sure how to understand this question).Completely agree, non of this was in the text I think examiners just make up questions, never come across Eva per product – just made up Eva is for long term growth for the over all company and if they want per product then the best measure would be opening margin or gross profit margin. Just hoping my made up answer will get me something
More or less what I put too. I put that it starts with operating profit which is overall for the company rather than per product. For the calculation it was a bit unfair having us calculate WACC without giving us the formula. It’s been a while since I studied FM so that knowledge is long gone
The points about EVA per product and employee’s control over EVA were, for me, quite easy to answer. The issue with that question is the proposal was absolute rubbish. So I went against the Marketing Director’s wishes and completely ripped into the proposal of using EVA as a performance measure across the entire business.
You can’t calculate EVA per product, and employees have no control over the performance measure. Simply asking them to add value is way too vague. Also, showing the employees the calculation was a bad move, is the marketing director genuinely expecting all their employees to understand things like WACC and capital employed? EVA is a high level calculation for qualified accountants, using it as a performance measure should be reserved for board level only, and absolutely not those on the shop floor. Honestly, the proposal was terrible, proper ‘my mate down the pub told me so and so’ kind of nonsense.
I got questions about the following
1. Budgeting of divisions
ABB and benefits
Rolling budget calculation
ERPS2. Performance pyramid and it’s relevance to scenario
Assess the internal eff measures
Why NFPI are difficult to measure3. Benchmarking exercise
BPRI completed question one and three. But couldn’t complete most of the second question. So I attempted around 80-85%
Did anyone else face this issue? What are the chances of passing if you don’t attempt 100%
nighteyes wrote:The points about EVA per product and employee’s control over EVA were, for me, quite easy to answer. The issue with that question is the proposal was absolute rubbish. So I went against the Marketing Director’s wishes and completely ripped into the proposal of using EVA as a performance measure across the entire business.
But did the question even ask if EVA should be introduced or am I missing something?
SevenUP wrote:But did the question even ask if EVA should be introduced or am I missing something?
Nope, in fact the marketing director wanted your support for it. But even at this early stage I knew I was on a hiding to nothing with this exam, and so I simply spoke my mind, because the proposal was nonsense.
Hey, I should at least score points for scepticism. 😉
Edit: I should point out I did not state in my response to the marketing director that the proposal was ‘nonsense’, I said it was ‘ill advised’. I do have some level of tact. 😉
In the music co question, I kinda advised they shouldn’t implement ABB because they currently have other bigger issues to deal with. For example the Finance director left because the 4 shareholders managed the 4 departments and would set their budgets how they liked. Even if they implement ABB, they haven’t dealt with this yet so it’ll be difficult for ABB to affect anything. Does this make sense to anyone, can I hope to score some marks on this?
There was a line in the exhibit that said the marketing direction wants us to write why each point is bad basically in regards to the quotes. I think most people missed that ! That’s why the quotes were such nonsense as they wanted us to explain why they’re incorrect and suggest correct point
I also had the 50 mark question on EVA with the first 6 marks on new entrants (which completely shocked me, knew the basics of EVA but I didn’t think almost half the exam would be on it) , Q2 on balanced scorecard and q3 on benchmarking. After reading these comments I think I completely messed up q1 on Eva as I thought it was a suitable performance measure! Did anyone else think or say this??
I also picked that up, as I was trying to plan out my answer structure on the 18 marks. However, because of time, I didn’t end up giving a detailed recommendation on the budgeting method fitted for each division. This is my 3rd attempt, praying I answered in line with what the examiner wanted.
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I wrote something along the same lines. I said it was complex and time consuming & that they’d have to weigh up the pros (which i’d listed previously) with the fact the finance team was smaller because the FD left & would the now smaller finance team have capacity to put this method in to use
I got these three questions
1. Budgeting for divisions
ABB and it’s benefits
Rolling budget calculation
ERPS2. Performance pyramid relevance to the scenario
Problems with non financial indicators3. Benchmarking exercise
BPRI completed question 1 and 3 but couldn’t complete much of question 2. So maybe attempted 80-85%
Did anyone else face this issue?
Exactly the same, spent far too long on Q1 and only got to attempt Q3 and a rough stab at q2, why did others say they go EVA questions, very confused, that was the one topic i was looking forward too, and i got budgeting for q1 instead
loissaunders98 wrote:There was a line in the exhibit that said the marketing direction wants us to write why each point is bad basically in regards to the quotes. I think most people missed that ! That’s why the quotes were such nonsense as they wanted us to explain why they’re incorrect and suggest correct point
But the quotes were not nonsense, in fact only one of them was easily refuted (that it would encourage short-term thinking) The other concerns from the employees about having no control over EVA, not knowing how to contribute to EVA, and not understanding the EVA calculation were, for me, entirely valid criticisms of the proposal.
I got my EVA calculation completely wrong, mind you. It was a total horror show for me!
for the employee concerns on how they could help create value I suggested using VBM along with EVA and for the employees to be part of this somehow but for the majority of this bit of the q had no idea what to put and wasted time on it then ran out of time completely on the last q 🙁
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