- August 19, 2018 at 4:47 pm
Alright thank you!!!August 19, 2018 at 6:14 pm
Hello please what about an online article where another person was quoted in. Do I use the name of the original person that was quoted in the article or the author of the article? For instance
An article written by Mr ABC in 2017 has a statement that was made by Mr XYZ. Do I write (ABC, 2017) or (XYZ, 2017)?August 19, 2018 at 6:18 pm
That’s assuming I want to reference that statementAugust 19, 2018 at 7:54 pm
Please note this topic thread is specifically about TOPIC 8 – we have a dedicates thread about Referencing and that is where all of these queries on referencing need to be posted. ThanksAugust 22, 2018 at 8:09 am
For topic 8 i have chosen mining companies, i want my analysis to focus on Hwange colliery a coal mining company. Im now faced with the challenge of deciding on which company to use as my comparator. On the one hand i have Bindura Nickel Corp which mines nickel and has a year end of 31 March while Hwange Colliery has a year end of 31 December. How feasible is it then to make comparisons of the two when they both have different financial year ends?
On the other hand i have RioZim which mines gold, nickel, diamonds and coal. So it does not mine only one mineral. Is it then possible to use it as a comparator regardless of the multiple minerals that it mines? RioZim has a year end of 31 December.August 22, 2018 at 8:45 am
The first thing that strikes me about your choice is why do you think a company mining coal is comparable with a company mining metals (Bindura Nickel Corp)? Their business environments are likely to be very different e.g. coal though its by-products may be used in some manufacturing processes, is mainly a product for producing energy whereas metals are solely used in manufacturing. Their customers and markets are therefore likely to be completely different (and possibly also their extraction methods?).
Whilst RioZm may mine multi minerals, it would seem that Bindura Nickel Corp and RioZm would be a more appropriate pairing unless you have sound business reasons for behind your choice of using Hwange Colliery as your main company. The whole reason for using a comparator for the selected company is to put it into an appropriate business context so that valid comparisons can be made. So unless their business environments share some similarities then if you want to use Hwange Colliery then this is best compared with another organisation operating in the field of extracting coal.
If you read through previous posts you will find that a 6-month difference is not a major concern unless the organisations are affected by seasonal variations in their operations and certainly given a choice of matching business environments or reporting periods then the former should take precedence.August 22, 2018 at 9:13 am
Okay thank you. Then there is another company Falcon gold which is into gold mining but it seems as if its small in size compared to RioZim i.e. looking at revenues and other operations. Is it still possible to compare the two regardless of size?August 22, 2018 at 12:35 pm
You would mention this in your limitations – that RioZm is much larger and possibly when comparing the ratios, where appropriate, that it benefits from some economies of scale. However it is better to match the type of operations so this would seem to be a better pairing as they are competing in a similar marketAugust 22, 2018 at 3:43 pm
Ok thank you.very helpfulAugust 27, 2018 at 9:29 am
Please how do I calculate the gross profit of my company, this figure is not given.
The revenue is 40 030b , and I am supposed to take out the “cost of sold products”. But there isn’t any. Does that mean that the Gross profit is indeed 40.030b ?August 27, 2018 at 9:54 am
It is highly UNLIKELY that an organisation will have no direct costs associated with its turnover unless the figure stated already has taken this into account -in which case it is normally called ‘net revenue’.
Direct costs may be called ‘costs of production’ the term ‘cost of sales’ is not necessarily used by every organisation. Mining companies I would expect to deduct direct production costs to arrive at gross profit and electronic companies to have manufacturing costs so it is a case that you need to read the notes to the accounts and study the figures carefully before making any assumptions.August 28, 2018 at 3:21 pm
Hello Trephena, I have still not been able to make a reasonable assumptions on what my company’s cost of sales/ direct production cost figure is because for instance in the income statement an item of cost that is not a direct cost is added to other direct cost and given one figure making it difficult to ascertain the exact cost of the non direct cost item.
Labour, materials and admin cost – $7.66b. Now where the exact value of admin is not given even in the notes, how do I get around this?August 28, 2018 at 3:25 pm
My profitability ratios are Net profit margin, return on sales, return on capital employed and gross profit margin, since I’m having a hard time getting a correct figure for gross profit margin, should I make do with the three other ratios and GNP and record this in my limitations?August 28, 2018 at 3:27 pm
I mean “drop GNP” and say why I dropped it in my limitations?September 19, 2018 at 4:36 pm
Hello Trephena, Is it ok to use subsidiary companies instead of their parent companies especially if their total materiality to the parent is immaterial. The companies I selected are subsidiaries of much larger companies.
Also, the size of both parent companies, with regards to market share and revenue, vary significantly. However their respective local operations, here in my country of residence, are of similar size (market share, revenue, profits etc). Can I go ahead and use the subsidiaries.September 24, 2018 at 9:21 am
Hi, i plan to submit my project in period 38 and the organisation i am looking to choose is under the category of Electronic Equipment Manufacturers and distributors of electronic products used in different industries.
I have identified Gemalto as the main organisation and Giesecke & Devrient as its competetiors, could these work because they provide security services mainly although they deal in digital securities as their main business.September 24, 2018 at 4:10 pm
I’m doing topic 8 for the nearest submission period.
Just prepared the FSs of the chosen company and the comparator. The thing is – I have complete annual FSs for 2016 and 2017, but only Half year reports for 2018. Is it OK to compare 2016 and 2017 based on complete annual statements and perform analysis of 2018 only using interim (semi-annual) FS?
best,September 26, 2018 at 11:00 pm
Hello opentuition team!
First of all, I apologize because this may get long but I am desperately trying to start off my project to be able to finish it by the deadline.
I am currently trying to choose companies for my RAP submission in period 37. The problem is that when I tried choosing a local company in the electronics sector (because there were no feasible local options in the other two industry sectors), enough data (e.g articles or analysis reports) were not available except companies’ annual reports (and this would limit info sources and my analysis).
And then I looked at the healthcare sector in the UK (I am going to select an international or foreign company now because of media coverage and information available as compared to my local ones) and finally came up with Spire Healthcare Plc as the perfect company except that it had no competitors (except Hospital Corporation America the revenue for which is $42 billion compared to Spire’s $1 billion- making the comparison apples to oranges) except for the non-profit ones (like Bupa or Nuffield) hence not comparable. I was also strictly making sure that both my companies were headquartered and operating in the same region i.e UK (while if I choose Hospital Corp America as primary company it is operating in US and UK both).
And then I left the UK company search to move to US companies. My mentor (who rarely replies to my queries) told me to go with General Cable and Encorewire (both NYSE listed and worldwide operations) but I could not understand their annual reports (form 10k). I don’t know where’s the Chairman’s statement located (or other such as the content list is very confusing for US companies) and then these financial statements are prepared in conformance with US GAAP (not familiar with how to deal with that in RAP). I even felt some interest in looking at Intel or Nvidia/AMD (all semiconductor manufacturers- do these fall in electronic equipment sector applicable for P37?) but the same problem rose that these are NYSE listed and their statements prepared in US GAAP while annual report contents very confusing and not interactive at all as compared to UK listed annual reports.
Summarising my issues:
1- Can I compare Spire healthcare with a non-profit competitor (e.g Nuffield Health)?
2- Can I compare Spire (primary) with Hospital Corp. America (secondary- or vice versa) given their revenues and regions of operation as well as the fact that HCA plc will not have seperate financial statements or reports for their UK based operations?
3- Do Intel, AMD and Nvidia (semi-conductor manufacturers) fall in applicable industry sectors?
4- Is it fine to select US listed companies given their reporting differences (US GAAP) and are there any adjustments to be made in ratio analysis or such if chosen?
5- Is it fine to select high revenue (e.g $5 and $10 billion for AMD and Nvidia respectively) organisations which are very dynamic as well (media coverage for these companies is huge- you’ll get some news for the companies on daily basis)? Will it be HARD to get my head around their operations (due to dynamic environment) and perform my analysis (although definitely annual reports will give me direction)?
* Tonight I am going to read an annual report from AMD to familiarise myself with the contents (and find the CEO and Chairman comments alongwith other assessments). Plus I searched for mining companies but rejected them because their operations are very wide and global ( and so their revenues e.g $40 billion for Rio Tinto). I am afraid of choosing Intel as well because of the same reason (operations very wide/global and figures insanely high).
I HOPE TO GET SOME DIRECTION FROM THE MODERATORS SO THAT I CAN FINALLY START OFF THE PROJECT (VERY EXCITED BUT VERY NAIVE).
Thank you.September 27, 2018 at 7:34 am
I am going to comply with your plea for a reply although at the moment I fear it is not the answer you are looking for.
As a former senior marker who has assessed and read and produced feedback on probably thousands of Topic 8 RAPs, I regret to say I am not very enamoured by any of the industry sectors for P37 & P38 for the types of reasons (basically amounting to difficulty in making valid comparisons and exactly what ‘electronic components’ comprises) that you state.
So much so in fact that I am actually reluctant to take on students for mentoring for Topic 8. To be totally honest I always found Topic 8 as a marker to be uninspiring as to my mind it is very same-old, same-old, mundane and quite frankly, boring. I realise this does not help you and is merely my own opinion and therefore I shall run your query by one of my contacts to see if there is any advice I can glean for you.
Meanwhile I would suggest generally that other topics such as 17,18 and 20 are not only more dynamic but in my experience had higher pass rates and may in the current circumstances offer less frustration when choosing a company. However I recognise that as Topic 8 is by far the most frequently chosen topic this advice is unlikely to be what students and many mentors want to hear.
As I say I will see what I can do to help though….. And hope to get back with more constructive advice as soon as I canSeptember 27, 2018 at 6:56 pm
@abidaca1 – regarding what constitutes electronics companies if you use these links to find appropriate companies:
My contact at OBU will answer your queries on Topic 8. Email me your email address via my contact details on my website absolutementoring.uk and I’ll forward her address to youSeptember 27, 2018 at 10:21 pm
Thank you for the help mam.
I have sent you an email and am looking forward to have my issues dealt with. I have checked out the webpage links you have provided and if it happens that I am not able to choose one of the previously stated companies, I will surely select from the options given there. You have helped much. I thank you again 🙂September 28, 2018 at 5:38 am
This is my general advice to students who do Topic 8. It is based on years of experience of marking this topic and the most common area failed (evaluation and analysis) and why the Marking Team fail this. If you approach it the way suggested below you are more likely to be successful.
Also remember if Englsh is not your first language. Most European Languages are read from left to right and therefore your graphs should similarly run from left to right in your report (the brain reads it the same way as text)
I suggest that you ensure you start Part 3 with a SWOT and PEST and really consider how the factors you have identified have influenced management strategic decisions (probably by building on the company strengths and seizing opportunities). Think about the SWOT and PEST factor influences and how these and those strategic decisions have impacted on the financial results.
You will need to read up on the CEO/ Chairman’s reports and Directors reports in the financial statements and also by reading articles on the companies in the business news pages. This will then help you understand what has gone on in the companies. A common fault is for students to present lots of figures and percentages in the text. Usually most of these are unnecessary and it is hard work for the marker to keep up with all the numbers – so aim to show the position via a graph/ chart and use the words instead to ‘tell the story’ of what has gone on focusing only on any percentages that are exceptionally significant and cannot already be seen from the graph.
Markers expect to see that there is a connection between the application of models (the business analysis) and the financial analysis and therefore you need to demonstrate how the models link to performance ( looking at SWOT and PEST factors provides the sort of connections and helps explain performance, which is what markers want to see).
PLEASE DO NOT JUST GIVE NUMBERS -MARKERS WANT MORE EXPLANATIONS AND FAR FEWER PERCENTAGES IN THE WRITTEN TEXTOctober 1, 2018 at 4:50 pm
I have selected General Cable and Encore wire as the companies to base my project upon. Both companies (infact most of the organisations that were available) are groups and have their subsidiaries worldwide.
I need to know if I need to tackle these groups (as they only have consolidated financial statements) differently as compared to individual companies. And whether something special needs to be kept it mind (and in analysis).
N.B. This has been asked before by multiple people on the forum but the replies were from other participators and I think it would be better if someone from the opentuition team answered it (or if I should contact acca obu department).October 1, 2018 at 9:28 pm
You really are best off getting the information straight from email@example.com -they set the rules and therefore are the best ones to give you reliable answers when it comes to the detail like thisOctober 2, 2018 at 8:15 pm
As I prepare the appendices where I am copying the financial statements (from the annual reports) onto the spreadsheets, I have come across a problem (couldn’t find an answer on the forum).
I know we have to use restated figures for ex. if income statement figures in 2015 financial statements are different for the comparator year 2014 as compared to the figures previously reported in 2014 financial statements. BUT my problem is that now ( in the 2015 income statement) some items for the comparator year are completely MISSING when compared to the original figures 2014 income statement. For ex. in 2014 income statement we have a figure for “Income/(loss) from discontinued operations” but when I look at 2015 income statement (from which I am using the restated figures for 2014 as well) there is no “Income/(loss) from discontinued operations” for the year 2014.
Now since I am using restated figures for 2014 (obtained from 2015 FSs), I am not writing this item in my appendices as well. Because if I do, it will be a problem (as balance sheet won’t balance- the balance sheet figures have the same problem) and income statement figures will neither match restated nor the original ones.
SO how do I account for this in my appendices and RAP? (for ex. if I need to discuss the missed item in my analysis how do I reference it?)
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