APM*** P5 December 2012 Exam *** Instant Poll and comments***

EVA was only needed for 2012, don't worry. you needed some figures from past year to calculate the actual adjustments, that's why they were given.

not hard exam but not enough time for me.

my WACC 8.65% = (16%*40%+5%*(1-25%)*60%)
could anyone please explain how they've got 8.46%?

WACC 8.65%
EVA = -12.05m
ROCE= 5.90%

EVA was only req for 2012...
the data wasnot available for 2011.

In all I have written P5 since 2011 continuously and I tell you this has been the easiest one Alex has set, disappointing there was no model I recommended a non perfomance measure since net income can be easily manipulated., Though a bit confusing and long. And am sure not all my calculations where right but I strongly believe am passing this paper. I pray ACCA will qualify me at last. Thanks opentuitution for it tips on corporat failure and all. My EVA is negative which I believe is right as they are 80 % regulated by the government. Obviously their objective will not be profit maximization but rather it should be achieving the 3'E

I wasn't well prepared for this exam. However I tried my best.

I tried to remember all the tips about how to approach an exam question and that at this level, utilizing your common sense can be helpful, but I simply couldn't answer some of the questions.

With that said, I don't think I passed. The questions were too lengthy. Particularly Q1 and Q2. and at times I wasn't sure what the examiner required :(

Am I the only person that thinks that this exam is horrible, you don't learn anything and the questions are so vague that it feels like you are stabbing in the dark trying to hit the target, I really hope I passed as I put alot of work in and most of the stuff I revised didn't come up.

BUT compared to P1,2 and P3 this one is my least favourite!!! hoping P6 will be better

Needs to pass,

You aren't the only one... I thought the exam was a disaster too. Information over-load. I had to "bluff" my way through some of the questions.

Hi, everyone good luck, I thought it was a difficult paper. Here are some of my answers, let me know what you think.

Q3 EVA was just for 2012

PAT 35
Add back
Dep'n approx 59
Non cash exps 7+2 (Doubtful debt) 9
R+D 12- (12/5 yrs SL dep'n) 9.6
Interest post tax 23 * 0.8 18.4
Less
Economic Dep'n (83)
NOPAT 48
644 * 0.304 this is wrong! (148) WACC sounds right at 8.65%
CE * WACC

b) This meant it couldn't go above 6%. The government wants to control the company from becoming a monopoly.

Q1. I found this difficult to talk about anything in section a) - I said Norths profit was falling needed investigation and I think West had cost control issues and debtor days were increasing?

b)?
c) Took each type of person and suggested how to align better with company objectives

Q4. I liked this question!
a) I talked about the company overtrading and not controlling its cashflow and this is a common reason why companies fail
b) Spoke about Argenti model, defects, mistakes and symptoms of failure and that the company in question scored well in all sections

Q2. a) Said incremental budget was traditional and suited to stable market 2 of the divsions and that the other could change to use a beyond budgeting method?
b) I just multiplied the actual figures by 1.03?
then ran out of time!!

Looking forward to comments

Really enjoyed reading these comments. I felt crap when i left the exam hall and had to lock myself in isolation after that dreadful performance. But after this, am all smiley and looking forward to P3. Overall, my conclusion is that the exam was fair. And let us not forget that ACCA like any other body want to make money... It's a lottery.

Exam was fair but lengthy...Q2 was easy..but I did not remember to compare net profit from rolling budget to net profit from Incremental

for WACC calculation - as gae that I can remember, the percentage was given after tax for debt, so I got 9.4%

Csf s n Kpi, balanced scorecard, building block, performance pyramid not tested. strage

This time? non financial measurement is not much.

I did not expect such exam/questions (q1,q2,q3) and it seems for most of those who commented above.so we are all wrong that we concentrated on certain areas of the syllubus,so while the question q1is a little bit not clear on the requirement and lengthy as usual,it is some what easier than previous one had we been prepared for all the areas.So for me q1 is the same as for every one i DID Q3 & Q4 AFTER Q1 AND LASTLY Q2.I was put of by q2 first but when I finally came to do it regreted because I stared doing rolling budget which was ok but then time was up.I expect a pass,atleast the majic one.good luck every one

Did anyone else write about how they should use non financial measures instead of net income in q1b? Or did I completely miss the point?!

@elliem said:
Did anyone else write about how they should use non financial measures instead of net income in q1b? Or did I completely miss the point?!

Everyone i suppose could not miss this point, however given time pressure i suppose again very little included it in answer, i just wondering why put an exam under so so .... time pressure? does the terminator can eat his paper under 3 hours?

@elliem said:
Did anyone else write about how they should use non financial measures instead of net income in q1b? Or did I completely miss the point?!

I was thinking the same, I wrote non financial performance measures, but no one seems to have mentioned about it all. Am I writing irrelevant points?

does anyone know when results will be out?

8th February
ACCA is trying improve in terms of getting out result quicker, But CIMA is still ahead waiting time only 6-7 weeks, besides you canretake the xam in CIMA within two months of your relust

Did anyone tried Q5 a)?

Q1

Report format
Introduction
3-4 lines
Sections
1) Compared divisions performance
2) Mentioned about EVA, ROI, RI against Net Income. Mentioned Net Income can manipulated. In addition wrote about benefits of the alternative measures. But I now regret that I should have mentioned about Non-Financial Measures like quality and etc. Also I mented about that they do not have a control over Capital expenditure
3) Remuneration Policy. For directors Fixed salary is ok , but bonus being based on net come is dangerous as it leads to disfuntional decsions makings, short termism and etc. And mentioned about commissions (I think it was wrong). I should have mentioned about EVA which long term, or smth else. Fo buying and creative staff I thought based on piece work would be appropriate to reward them with commissions rather than bonus on total income, the reason for that they are more motivated for being recognized for individual work, (because of the nature of the business i.e. advertising company)
Conclusion
I mentioned that in general company is doing very well despite current economic conditions and stiff competitions from new entries, this may be due to this company have been established for long time and have got a good reputation.
I suggested they need to look at improvement of performance measuring choice . And Reward/remuneration policy should set up in a way that should be clear, have a motivation to retain the talented staff further with the company. And controllable for divisional managers (basically I thought of building blocks.

@elliem said:
Did anyone else write about how they should use non financial measures instead of net income in q1b? Or did I completely miss the point?!

Yes I recommended to use the Balance scorecard . complete disaster of an exam for me though. fingers crossed.

do you remeber if the questions has specific for on financial mesure or just asked other measure ?

sorry what I meant to ask is if the requirement specified we need to talk about non financial measures as opposed to net income

pretty sure it just asked for other measures for each division .

questions are available:

https://www.accaglobal.com/content/dam/acca/global/PDF-students/acca/p5/exampapers/p5_2012_dec_q.pdf

google is confused ))

@elliem said:
Did anyone else write about how they should use non financial measures instead of net income in q1b? Or did I completely miss the point?!

I thought that was a subtle hint towards non-financial performance measure myself. I mentioned Balance Scorecard too (simply because I felt that it was the most suitable and also cuz I just looked at it on train on the way to the exam!).

I think in Part 3 or as it is called now the Professional part of the exams, there is no one straight answer, and that we will be given marks if our answers are relevant to the scenario and if they made sense. It is an analysis paper after all... fingers crossed people! x

Now that the questions are out...

Question 3 - has anyone else interpreted that breaching roce would mean going above 6%??

As a critical utility it would surely make sense not to have a large roce?

If a lot of people read it that way do you think they may change marking? I based all my constraints on a low roce including no motivation for cost savings