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Hi,
I want to know how can I insert function that uses data from different worksheets in the same excel file. I have created one file that includes both financial statements and ratios and I am trying to show the raw data used for the calculation of ratios.
This was one of the reasons for failure in my first submission.
Thnx
@hussainsabt92 – Have you seached on Youtube? Often individuals have posted videos and talk you through how to do various techniques on Excel and other programs. I have used such videos in the past and found some of them useful. You will need to insert a few key words for the relevant function in Google to find them.
Thank you @trephena
I have one more question if you can help me out:
While discussing each ratio, do I need to cite/reference everything taken from chairman/CEO statement? Or markers already know what the source is. Because it looks a bit silly to write after each sentence or paragraph the following brackets: (annual report,2014).
e.g revenue has increased because of a recent acquisition (annual report,2014). One off expenses derived margins down (annual report,2014).
Thanks in advance
@hussainsabt92 – Referencing is one of those sticky subjects – no work is failed for over-referencing but quite a lot of RAPs are failed for under-referencing. Perhaps not every sentence but it should be clear exactly what you are referencing. I understand from my marker friend that markers hate it when a student just puts a reference in a bracket at the end of paragraph each time (and worse still several all stacked up together) and it isn’t clear exactly what is being referenced.
Referring to you little extract above – one reference here would suffice. Of greater concern though to me is that your second ‘explanation’ cited above tells me nothing. You need to do proper explanations that the reader can follow and actually understand that do not read like the notes to the accounts. (Other things markers hate apparently is text book ‘explanations’ and comments that are statements of the obvious or things they could see and read for themselves if they bothered to download the accounts – so bear this in mind when reviewing your work).
Dear Friends
Please tell me the answer on my below query:
As I was preparing for P29, I used the FS the end of Mar 2014 which probably publish the end of April or May ( not sure exactly but my guess), if that is that case , can I use the last one used for p29 ? or just after they publish it but before the deadline for OBU, do I have to change into the one for Mar 2015?
Thank you for your time for your assistance in advance.
@pinkmonkey – please see the Information Pack for the latest rules – p.39 relates to your specific problem.
I have discussed this in more detail in my reply on the Forum “Topic 8 – Choosing a company how to start???” to redoy300 on 22 January 2015 so please read that too.
@ibiduni its calculated as Gross Profit divided by Sales expressed as a percentage.
Dear Everyone,
I just want to ensure which formula of ROE ratio is correct.
According to a accounting website it says net income /shareholders equity.
net income is profit for income tax(profit for the year – provision for income tax) OR profit for the year (profit for the year attributable to owner of the parent and non controlling interests)
which one?Just in case, net income is not total comprehensive income for the year, right?
For shareholders equity, equity attributable to owners of the parent plus non controlling interests, is that correct?Thank you for everyone
Dear Everyone
I have another question regarding ratios.
If the company has already calculated lets say ROCE or ROE, but I just follow the fomula comes from text book or accounting website then the figures have not much , if that is the case, do I have to use the company figures? or can I stick to my figures because the fomula are still correct?Thank you
@pinkmonkey – you can use the company ratios if you like but you must reference them to the page in the company’s financial statements and when you list your ratios in the appendices make it clear where you have taken the information from e.g. insert a column in the spreadsheet to say ‘company accounts’ or ‘self-calculated and with self-calculated give the formula in the next column. There is nothing wrong with using your own ratios if they are correctly calculated.
However there will often be a slight difference between your calculations for ratios and the company’s listed ones – you state this as a limitation in the limitation section. I suggest that you try to stick with one or the other, either all your calculations or all the companies in a particular section e.g. profit and return on Assets and return on capital employed otherwise it will be a muddle. However companies often do not produce liquidity ratios in the financial statements so you will have to use yours. It is best to use the published EPS as that is the most reliable (and often difficult to calculate sufficiently accurately).
Dear Trephena
Thank you very much for your reply.
In essence, It is always better to calculate ratios myself rather than just inserting those done by someone( ie the company)?
Or like you said, always that of company is more reliable so using reliable source is better than ration by myself even using correct formula?
If it does not matter which one to use, I would rather try to calculate all ratios myself so that at least I can show the marker I did make a effort , what do you think about it?
I was thinking to ask the company what formula to use ,but do you think it would not be a good idea? Like you suggested, I just put this issue in the limitation section?
Thank you very much for your time
@riteshgrg82 – I answered this the first time it was asked (if you tick the box for notification of replies when you post you would have received an email notification of this) and moved your question to the Financial Statements Queries forum as the idea is to group similar type questions together.
Regards
Trephena – OBU Forum Moderator@pinkmonkey – I would say yes it is probably better to calculate the ratios yourself. The only problem I saw once was a student who was failed because the marker used the company ratios and the student used their own calculations and the feedback said their work was inaccurate. There was,an appeal (this was not a difference of academic judgment – which you can’t appeal against- but based on facts) and it was decided that provided the formulas have been correctly used and the explanations based on the ratios was reasonable that was fine. By the way I think this was a one-off as most students calculate their own ratios and I am not aware of this normally being a problem.
If you can get the investor relations department to tell you the formulas used that would be ideal (but they may not understand that there is a problem so you may need to explain the situation very clearly so they see what you mean). Discuss it in the Limitations section and if any of your ratios is very different then go with the company one but explain why (and suggest their basis may be different as they have the level of detail you don’t have)
Dear Trephena
Thank you for your reply always.
As you suggested, I did calculate ratios myself as much as I can but some of ratios DE ratio which was not matched to that of the company. Then I decided to use both. (mine is D/D+E)Is it a good idea?
The problem I have now is if I use the company’s, 2014 is fine but 2013&12 is based on USGAAP whereas that of comparator is based on IFRS all years. Can I still use those figures based on different accounting standards?Another problem is I want to include market ratios but only EPS is available and again the basis of accounting standard for 2012&13 is different. I asked to give me dividend payout ratio, div yeild, and PE ratios to the companies but I have not received them.
If I cannot have them, my ratio analysis with less market ratios is going to be weak?Last but not least, I manually typed the financial statment (2014, 2013, 2013) then from there I created ratios for 2014, 2013 and 2012. I remember that another mentor mentioned that we should create 2014, 2013, 2012 and 2011. My understanding is the ratio analysis would be like this: let’s say GPM (Gross Profit Margin) is increased 10% from 2012 to 2014, rather than comparing each year like 2014&13, 2013&12 and 2012&11.
Could you confirm that only preparing 2014-2012 ratios are appropriate?Sorry for asking a lot but I would appreciate it if you can help me out
@pinkmonkey – as mentioned previously any differences in ratios and problems encountered that affect the figures need to be set out in the Limitations of Data Gathering/ Ratio Analysis sections.
1. If you are referring to Debt to to equity ratio by DE then as the name suggests this should be total Liabilities / to Shareholders equity. (As already mentioned you need to refer to anything that may distort the figures in the Limitations)
2. You could supplement your investor ratio section by calculating return on equity (include all the shareholder reserves and retained earnings).
3. You should be including three full years from 2011 to 2014 e.g. 1 April 2011 to 31 March 2014. However remember it is not the figures in themselves that matter but the reasons that lie behind them e.g. management strategic decisions (usually based on the SWOT) and PESTLE factors that have influenced performance. Just churning out figures and percentages with no sensible explanations is a sure way to fail…. (as I pointed out in my article on Evaluation and Analysis on our OBU Homepage). If something significant happened in a particular year then it is appropriate to mention this against the year but generally a good analysis will trace strategies through the period under review e.g. closures of a factory/ the implementation of more efficient equipment in one year may have led to lower cost of sales in subsequent years.
Dear Trephena
Thank you very much for your reply. I would appreciate you helping me out.
I am confused facing the limitation of ratio analysis in part 2 and the limitation of this report in part 4. I just thought for limitation in part2, I can just mention the generalised definition and ideas of ratio analysis from a book. Then for the limitation part 4, I should mention the actual my experience of limitation such as My company and comparator is using different accounting standard in a certain period. Also for ratios, I cannot get the matched figures as those of my company and comparator.
If you would say the specific limitation as above in part 2 then what sort of limitation can I talk about in part 4 limitation?
I would appreciate it if you could give me your advice as soon as possible, thank you
@pinkmonkey – I do not know what you are referring to when you say ‘Part 4’ as there is no Part 4 of the report.
I suggest that you read the Information Pack thoroughly as this should answer many of your queries. In particular you should concentrate on the whole of Section 7. Page 43 gives you a general idea of the 3 parts and what should go into each.
In relation to your issues on limitations these should go in Part 2 in the general discussion of Limitations relating to ratio analysis and information gathering. When doing your evaluation section (Part 3) you should remind the reader of any particular problems (limitations) in the calculations of the ratios and/or in making comparisons if they could affect the implications.of your comments
i failed my first attempt due to performing superficial business models of swot, pestel and 5 forces. (Although i did provide some details). the marker wants them to be more in detail. So for the resubmission is it okay if i only go for SWOT or pestel only as i feel i can write alone for anyone given the word limit?
and if i write now the thesis on a completely different company, will my RAP still be capped to grade C?
Hi Wajiman,
Yes, regardless of whether you change a company, your RAP will still be capped at a C.
“If you fail the RR on the first submission you will be awarded a grade C for
any successful subsequent RR, even if the resubmitted RR is initially
assessed as being of a higher pass grade;”Our students usually opt for 2 non-financial models because of the word limit, and explain them well (1,500 words or so for 2 non-financial models, it works pretty well). SWOT and PESTEL has a tendency to overlap a little, so do make sure they are sufficiently distinct from each other.
Hope this helps!
Hi,
I am doing my RAP on the banking industry here in Zambia.What are the Financial models related to this industry which i can use.Am thinking of SWOT & Pestel for my business evaluationHello,
I failed my project and one of the reasons given was the ratios and business models used.
Please I will like to know financial ratios and business models that are good for analysing BANKs.
Thank you.
Hi,
For banks, you’ll need to look at deposits, loan growth, and as a key part of risk management, analyse the changes in tier 1 and tier 2 capital in relation to Basel requirements.
SWOT and PESTEL are acceptable models to look it. They’re as applicable to banks as they are to other companies.
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Hi there!
Could you suggest any business models which I can use for Topic 2 ?
I’m considering Fitzgerald and Moon’s Building blocks as one of them.Thanks! 🙂
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