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Hi Sir, could you help with the following:
1. Would it be ok when commenting on financial performance of Bonar that the net assets seem overstated in Bill’s forecast as little money has been spent on new investment in plant and machinery and depreciation would reduce the NBV. Also, from a management buy out perspective, is it worth commenting that old machinery is more likely to need high service/repair costs in the future which is a danger which should be looked at further by the buyout managers
2. part a asks to write an ‘assessment’. Is there a specific layout I should use when writing an assessment to gain the professional marks, a bit like with a memo when we write to, from, subject, date etc
3. In part b would it be ok to use JS&W’s suitability, feasibility and acceptability to help evaluate the advantages and disadvantages
Thanks for your time
Certainly, the question says that the machinery is old (also the IT system is poor) so that will need additional expenditure after the takeover.
For assessment, here, there is no particular layout: PESTEL, 5 forces, resources and capabilities can be used. Often for assessment you can use suitability, feasibility and acceptability, but as you note for part (b) you have to be careful not to ‘steal’ points from the rest of the question.
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