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Afternoon paper was way too difficult
Sec was simple NPV, Sensitivity and other one was Ratios for working capital and discussion on overtrading plus theory.
Section B was the most annoying – Bond valuation, Fx rates and I don’t recall the other one
Section A was tough as well, weird graphs of NPV and 4-6 marks questions on Islamic finance, a bit to govt policy and cost of equity calc
Does anyone remember the other section B question that I don’t recall?
Did the morning exam.
Section C was a cashflow question – hadnt revised this at all really
Section C was also a NPV calc – Strange wording and I ended up with a negative NPVSection B Forex – interest rate parity
Section B Working capital formulas (I think)Section A seemed ok apart from Marginal average cost of capital I had never heard of this before
Did the morning exam.
Section C was a cashflow question – hadnt revised this at all really
Section C was also a NPV calc – Strange wording and I ended up with a negative NPVSection B Forex – interest rate parity
Section B Working capital formulas (I think)Section A seemed ok apart from Marginal average cost of capital I had never heard of this before
Could anyone share how a good answer for part c question regarding working capital should look like? And which ratios count?
Could anyone share how a good answer for part c question regarding working capital should look like? And which ratios count?
Yes it was since revenue was shooting up but profits weren’t and they had increased overdrafts.
Yes it was since revenue was shooting up but profits weren’t and they had increased overdrafts.
Overtrading signs
Rapid increase in revenue
Rapid increase in receivables, inventory and payables days (As I calculated the above I quickly did the cash operating cycle as well)Sudden large reliance on ST finance – they used $11m of overdraft and none in the prior year
Liquidity ratios would have also indicated a fall in liquidity which is another sign of overtrading.All of the above boxes were ticked for 20X7!
I got the same paper, the other section B was cost of capital I think.
Some of the multiple choices from section A was abit trickyI think you had pretty much the same questions as i did.
I too found it hard and was pretty much guessing for around half of it. This comes off the back of me going through the BPP revision kit, and TWICE! While i would do some of the questions in that kit around 5 times because of their difficulty and the need to remember.
In reply to the other section B question, i think we had irredeemable preference shares? Something About the “Brothers” looking to invest? There was something about needing to find the Floor Value of the shares, along with the MV too.
I think we had across section B; Foreign X-Rates/Interest Rate Parity Theory, then there was Bonds, and i think the other was Irredeemable Pref Shares…
It was a tough exam. By the time i got section C, i was totally deflated (pardon the pun). But i think i answered my section C better.
I have to say that i am disappointed with how much i put to being ready for this, and most of the questions, rather than be a healthy challenge, were more designed to throw you off at just about every turn. So i’m questioning now why bothered with most of the revision kit.
It was a tough exam. I have to say that i am disappointed with how much i had put in to being ready for this, and most of the questions, rather than be a healthy challenge, were more designed to throw you off at just about every turn. So i’m questioning now why i bothered with most of the revision kit.
Hours and hours poured in. Committing to memory, textbook fashion the long pure knowledge questions across Working Capital Management and Investment Appraisal Methods, that involves discussion and explanation. And none of them came up!!I suppose where it did help was that i could pull a few points out from that knowledge committed to memory to make a few points in what was being asked; such as:
1. Discuss the advantages of a conservative working capital approach as opposed to an aggressive approach… (on one question, and..)
2. Discuss how the business would take account of future inflation in implementing them to DCF method based investment appraisal techniques (something like this)Perhaps you can see my disappointment and why i would be. Hopefully, with some sensible guessing for half of the exam, along with a better answered section C, i may just get over the line.
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