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

Ahhh thank god.. I initially thought that they had failed because they didnt go above 6.. But then I realized it was the other way around so scribbled off everything and changed my answer! Pheww.. relieved to hear I did something right! I got a positive EVA though.. It seems half the students who answered this question got positive EVA and the other half got negative! I wonder which is right.. It was slightly confusing I thought with the different ROCE’s that were given.. which to take!! LOL

yes it is less than 6%. they could not form a monopoly.

i think you could calculate current ratio and gearing? it was all in the appendix ready to calcucate. Anyway it’s over now, we will get results on 8th Feb so not long to wait. best enjoy our xmas now and forget about it. if we fail the exam next time will be better as we will only have one big scenario to worry about instead of two! I think that is why they are changing it. too much time pressure, it is impossible to absorb the scenario’s. i literally skim read them and still just managed to finish!

Omg I must have missed the appendix no wonder I couldn’t calculate anything. Was the appendix after the questions? Think a fail is looking likely for me.

I think there was an article on Baron & Sachs in Student Accountant, I know I read about it somewhere. Q5b was two perspectives of Balanced Scorecard so I talked about that.

I got a negative EVA in Q3 and 5.9 ROCE.

I did the rolling budget same as others here with the 1.3 increase etc, and then suggested zero based budget.

I thought Q1 was hard but basically went through each division talking about performance individually. Said that under EVA different dept was better performing than originally indicated under Net Income and why. Can’t remember which was which now.

Disaster for me.

I lost total 8 marks in rolling budgeting.
I am asked to suggest a budget method for marketing division. However, I sugget introduce transfer pricing policy among four divisions. And beyond budget method to adapt to market fluactuation.

I only did a lot of calculations on profitability, gearing, and liquidity, but comment very shortly. I am not sure whether marks can be given to these calculations.

Even worse, in EVA calculation. I only calculated for year 2012. Have you calculated for 2011 too?

At last, I should say THANK YOU to John and angry***and our group. I have attended many classes in P5, but I should say John gives the best lecture. You will find that on condition that you studied his F5 lecture.

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.

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

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

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

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

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

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