How to Pass P5?

In giving P5 exam, one approach I found useful was to use “What, How and Impact.” What does this mean? Following is a very simplified explanation.

In trying to answer any question, FIRST step is to put across WHAT the point is. For example, if the question asks to calculate net profit margin, don’t just calculate the percent. You need to state WHAT it is, in relation to previous year or a competitor. What percent has it gone up from previous year? How much better (or worse) it is than the competitor? Or benchmark?

SECOND step is toanswer HOW. What does that include? To carry on the illustration of net profit margin, after calculating net profit margin, explain how the business has come to have this profit margin. Have the sales gone up? By how many percent? Has any particular expense been reduced? Has any change in the business world resulted in this?
The THIRD step is to explain the IMPACT. What does that mean? Well, how this increase or decrease in the net profit margin will affect the business? Will they be able to pay more dividends? Were they hoping to invest in some new project that they can do now? Can the company pay off its debt?

Thus, if we write that “XYZ Ltd has a net profit margin of 12%, which is 4% more than previous year and 3% more than the nearest competitor. This is due to cost reduction of 10% in warranty claims as a result of following the TQM policy. Hence, XYZ Ltd announced an interim dividend payment of 4p per share more than last year.”
This is what I mean by, “What, How and Impact.” Thus the answer requires this additional information to score well in the exam and for an answer to be considered a good answer.
This requires training our thinking in general, so we get in a habit of thinking like a professional and have well rounded out answer without being wordy.

This brings us to the next point, that of controlling our thinking and nerves under stressful exam conditions. During the exam, our mind seems to rush into all directions. We fear that if we do not rush we may run out of time or ideas. But from experience I learned that the more we rush, the more likely we are to make mistakes and get things wrong. We may write a lot but then realise that we have not answered the question, as we misunderstood the question. That is why it is better to keep a cool head and calmly think what the question is and what our plan of action will be to answer it. That may appear very simple but unless you have practised this well in real life you are likely to get confused and start rushing madly and making mistakes. What can be done?

Firstly, learn to breathe deeply. Secondly, when practising, write out answers in full. This slows down our thinking to the speed of writing and not faster. This may sound simplistic but it does work. By practising well, you will realise that under stressful circumstances, the mind comes up with the right answer and concisely at that. You do not have to rush around looking for an answer!

Try the above suggestions, and you will find that not only you will pass the P5 exam but you will present yourself as a professional at all times. Best wishes, Ashish.