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The exam was not that bad althogh as always time presured.
The first question was on divisional performance, quality if report, proposed new performance measures, expected RoCE and new information system
The secon question was on business process reingeneering and performance of reward system.
The third question was on ABC and ABB and their application to divisions of the company.
The forth question was on EVA but I did not chose it so I do not know the details of the question.
The questions were clear and to the point for the first time! I guess our collective complains in the last session really helped here.
The paper itself was ok but lengthy. Manage to complete 85% properly and the rest in rush..been scoring 48 since last few sessions. Hoping just to manage a 50 at least inshAllah.
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Abm and vbn, eva, roce, is, report assessment
Thought is was an okay question but time was very much against me. With regards ROCE we had to calculate it but talk about the expected value use in decision making right? Also, in the EVA question what did everyone do to the ROCE. Did you add the operation deprecation into it?
Please God let me get 50!
The paper was ok in general! Lost a lot of time while picking question to answer. ? Did anyone notice got negative Eva in 4q for both of divisions? Also did you advice to implement abc for timber in 3?
I got negative EVAs too – I think Blue was quite badly negative and Green was borderline?
I thought the whole thing was extremely do-able – not an unpleasant exam at all – but time pressured. Stuck rigidly to the 1.8 minutes per mark throughout & hope that was enough to pass.
As far as I remembered I got Eva around -20mln for both….I did not adjust capital employed since did not reveal any adjustment which refer to PY… Did you?
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I did not adjust capital employed too. In question 1 have you discussed performance of the company or just performance report in part (i)?
To be fair to the examiner, this wasn’t a bad paper, if I fail it’ll be because I wasn’t prepared enough or my answers were vague in places.
I felt the questions had a lot of reoccurring themes, ROCE mainly.
I got negative EVA but it was massive, think I did my wacc calculation wrong? I also saw a previous question where you got marks for stating assumptions, so I put that I assumed the tax in the accounts was the tax paid and that the capital already had the leases in it, as we were given no detail.
Q2 on BPR I thought was going to be a nightmare as my knowledge on the subject is sketchy, but the question seemed to guide you to an answer, at least that’s what I hope!
I was scribbling to the last second as I did Q1 last as it was the one I felt most confident with. I usually hate Q1!
Real lack of models in this exam though which surprised me.
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I did not adjust capital employed too. In question 1 have you discussed performance of the company or just performance report in part (i)?
@gvanca said:
I did not adjust capital employed too. In question 1 have you discussed performance of the company or just performance report in part (i)?In 1a evaluation of performance report was required, not the performance of the company, so I discussed the report!
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I too but I wanted to check if I was right. Thanks 🙂
@narinemalakyan said:
As far as I remembered I got Eva around -20mln for both….I did not adjust capital employed since did not reveal any adjustment which refer to PY… Did you?Agree – no adjustment to opening capital employed. All sounds like a bit of a non-event, this exam, really 😉
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Another question on EVA have you added back lease expense in NOPAT calculation?
i am praying i passed. i didnt get to finish Q4 part b or c and i didnt understand what parts ii and iii required for Q1. How did you guys answer part ii for Q1. i thought that revenue per sq metre didnt make sense.
Do we not add back the provision for bad debt becasue it was a movement throughout the year? Also didnt the OCE not have to factor in some depreciation for the operating leases?
I di believe that they really switched examinator and it was nut Alex Watt this time! Because questions did not seem so complicated as usual.
Although I understood that I remember nothing about value based management though I’ve read about it!
Praying for passing while Alex Watt is on vacation!:-)))@gvanca said:
Another question on EVA have you added back lease expense in NOPAT calculation?I did add back the lease expense in NOPAT but now I’m not sure we should have. Hey ho, they don’t do negative marking, right?!
@vatalya said:
i am praying i passed. i didnt get to finish Q4 part b or c and i didnt understand what parts ii and iii required for Q1. How did you guys answer part ii for Q1. i thought that revenue per sq metre didnt make sense.Was ii) where she said she wanted to use revenue & operating profit per sq m as measures of utilisation of resources? I said it was fine to use them (revenue per sq m for a business with lots of shops is a really good measure to compare them by), but the business had far more “resources” than that, then listed all the ‘M’s. Money, manpower, management, MI systems, machinery (equipment), materials (stock), methods (processes & knowledge), markets/marketing, make (brand) – they’re all resources. Looking at only store footprint is a very narrow basis to focus your performance management on.
What was iii)?
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On the income statement side, operating lease charges should be added back.
I have just read this on ACCA technical article RELEVANT TO ACCA QUALIFICATION PAPER P5. So we were correct to add operating lease charge back
WACC 10.45 %
Green EVA positive around 24m, Blue negative around $35m
mostly due to revenue and cap empl figure diff as most adjutments similar for each co.
no r&d adjustment, Econ. Depn adj (12-10) x (1-25%)
Operating Lease add back (said depn incl adj for leases I think ?) couldn’t decide if that needed adj as couldn’t find a period of lease. so did not further adj.
Non cash add back
pretty much only opex not adjustedNo cap empl. opeing figure adjmts
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