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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!
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