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The key thing to doing a successful submission for Topic 8 is to appreciate the importance of the business analysis. Too often students think that ratios are the be all and end all and consequently therefore do not put sufficient focus on how important strategy (and also the factors that influence and impact on this i.e the SWOT and PEST) contribute to a company’s success or otherwise.
So to answer your last point first, provided the strategies from this 2012 letter are still relevant for its current financial performance then it is perfectly acceptable to refer to it although your financial analysis will only be looking at figures from the last 3 financial years.
Moving on to your first point about the competitor – some basic awareness of their strategies will always be useful as just saying that one company outperformed the other is considered inadequate analysis (basically anyone come to that conclusion if they looked at the figures). Therefore you are expected to come up with reasons that account for the differences in the results – so some understanding of the comparator’s particular products and markets, its plans and any of its strengths or weaknesses may be helpful for you even though you are not required to perform a formal SWOT for it (usually the PEST with be fairly similar for both companies).
Dear All,
Please anyone help me out to choose competitor companies for Topic 8 – 50206060 Transportation Services companies that manage Ports.
I want to choose DPW (Dubai Port World) and PSA (or APM Terminals parent). My question is this can i compare these two companies F/S, as both are based in different countries and having F/S in different currencies?
Your advice will be highly appreciated.
Many Thanks,
ABUBAKER@gillianm said:
The simple answer is that unless the motor cycle operations are run and reported as a separate company you will not be able to do this. If the financial statements include cars and motor cycles you have no option but to use the financial statements that cover the whole company or choose different companies or a different industry sector.I am doing the rap with my organisation as Netflix. My issue is that almost all its main competitors such as Hulu, Amazon Prime Video are subsidiaries of large public companies and so it is nigh on impossible to find stand alone data for the rival companies
Viacom is sorely in media entertainment and has available financials and metrics but it is so much smaller in terms of market cap and revenues.Its business model is also slightly different as it delivers the content primarily through traditional linear TV .my question is how much of an issue is it if you leave out the obvious competitor ( for lack of information) and use a company that is in a different space such as Viacom.Or Would i rather use Disney even though it has investments in such thing as theme parks that are not necessarily media entertainment
Unfortunately mackawara you have hit on one of the major issues for Topic 8 – what with IFRS & GAAP, groups and their subsidiaries and organisations operating in different countries with different currencies it becomes a major problem finding a suitable comparator -and doing a meaningful comparison. Though the latter should put strategies at the heart of the evaluation and their impact on financial performance rather than just simply commenting on the trends in ratios.
I make no secret of my loathing for this topic anyway but I do sympathise. There is no easy way round it I can see apart from choosing a different topic -not much help I realise for Topic 8 devotees but something I would suggest for those embarking on P40.
Hello GillianM,
I just failed in period 38 and want to resubmit in p39. I have failed in spreadsheet as I did not show application of formula in cells. Actually I didn’t notice it while doing my rap. Rest I passed. So my question do I need to only improve that section as per marker feedback or I need to do some more works in my rr and sls. I worked with topic 20. Took 5 years annual reports of the company till 2018 year ended march 31st. CSR Scandal occurred in 2015. So do I need to update annual report till 2019 for topic 20 as well? As I know for topic 8 and topic 15 I need current 3 years report but for topic 20 I couldn’t find anything else. Pls advice…
Just do exactly what it says in the feedback and you should be OK.
Unless something else significant has happened in respect of the company’s CSR since you submitted then nothing needs to be updated. For example if you had been doing Boeing the fact that the company was initially poor to respond to the 737MAX incidents and has suffered reputational damage and a severe decline in consumer confidence, I would have expected a student to have at least mentioned this change of circumstances in a couple of paragraphs when resubmitting.
Thank you for your quick reply. My company is Toshiba corporation and they did accounting scandal in 2015. Nothing major happened since then. In that case hopefully I don’t need to update to current year then. Thank you for ur advice.
Dear @GillianM
As i’m submitting my RAP (topic 8) for period 39, i just wanted to confirm that do we need to provide references for the the formulas used in the excel sheet?
secondly, i have confusion related to 2 points in the information pack, page 17 (4.d) how to submit your RAP.
*files to submit.
point 3 = Any financial statements can be uploaded as pdf documents in the appendices.
point 5 = At least one excel spreadsheet. if you have other spreadsheet files they can be uploaded as general appendices…point 3, which financial statements shall be included the one we has used for ratio analysis or we have to submit the whole annual report (as it contains financial statements)?
point 5, as already mentioned, do we need to provide reference that from where we have used the formulas?Thank you for your time.
Hi @GillianM
As OBU requires to submit all the appendix files separately.
I have confusion that Do I need to include the appendix at the end of the main Research Report also or just the separate files?
Can you please shed some light on this.
Hi if i need to work with you on my RPA how can i? do you provide online sessions and what is your fee? thanks
@jamesparekh when it comes to your submission you will need to include separate files for most components and there should be nothing in the report file after the conclusion and recommendations section
I will endeavour to answer queries on the Open Tuition forum but for 1-2-1 mentoring please see my website absolutementoring.uk
hi @GillianM,
can please shed some light on the fact do we have to include reference for each formula that we have used in calculating the ratios?
thanks
Hello.
Can someone please clarify me on the Analysis part on Part 3 with a comparator.
I’m using SWOT analysis and Porters Five Forces model for the business analysis part, but do I have to analyse both the selected organization, which includes the comparator?
Especially on SWOT analysis, I would have to conduct the analysis twice for both companies, which would take up a lot of word count.
I compared both companies on the financial analysis part.
Thank you
@theadiltaher as these formulae are ubiquitous and appear everywhere no reference is required (after all who can claim to be the originator of these – certainly not Kaplan, Frank Woods etc). However you must reference your limitations and ideas that you have gleaned from elsewhere to show from where you have extracted this information and data
Thanks @GillianM for the quick response.
i have asked about two points in my previous post, can you please shed some light on that post too?
Regards
Hi
1). It should be PESTEL first, then SWOT then ratio analysis.
2). Yes you can, you can put it in a separate section before the pestel, swot and ratios under the headings company profile, comparator profile, company description etc
You may also choose to put it along with your choice of company and reasons for choosing in earlier parts of the report.
3). There’s no definite answer to this question , as it will depend on the authors choice and project objectives.
If for example your project objective was to ” assess the financial strength of ABC” one could argue that an analysis of profitability, liquidity, gearing and efficiency ratios will all be beneficial to achieving this objective. Another author my instead choose to accomplish this objective by using only profitability and liquidity ratios backed by a strong critical swot analysis.
On the other if your objective was to “evaluate the profitability of ABC” , one can see how a strong analysis of only profitability ratios can successfully achieve this.
If you feel your words would be better spent on the business analysis, and your objectives will still be met, feel free to reduce your ratios.
I did only 6 and I passed.
A debt equity ratio is a ‘type’ of gearing ratio.
4). True, ratios like current ratios are tricky to explain, in this case you may choose to use a part textbook approach, which is somewhat generic. However, be sure to add a supportive narrative from the business analysis and or an external source.
Hi
1). It should be PESTEL first, then SWOT then ratio analysis.
2). Yes you can, you can put it in a separate section before the pestel, swot and ratios under the headings company profile, comparator profile, company description etc
You may also choose to put it along with your choice of company and reasons for choosing in earlier parts of the report.
3). There’s no definite answer to this question , as it will depend on the authors choice and project objectives.
If for example your project objective was to ” assess the financial strength of ABC” one could argue that an analysis of profitability, liquidity, gearing and efficiency ratios will all be beneficial to achieving this objective. Another author my instead choose to accomplish this objective by using only profitability and liquidity ratios backed by a strong critical swot analysis.
On the other if your objective was to “evaluate the profitability of ABC” , one can see how a strong analysis of only profitability ratios can successfully achieve this.
If you feel your words would be better spent on the business analysis, and your objectives will still be met, feel free to reduce your ratios.
I did only 6 and I passed.
A debt equity ratio is a ‘type’ of gearing ratio.
4). True, ratios like current ratios are tricky to explain, in this case you may choose to use a part textbook approach, which is somewhat generic. However, be sure to add a supportive narrative from the business analysis and or an external source.
If you find that the current ratio is worsening, because of an increase in current liabilities like accounts payables, could this signal cashflow problems? linked to inept management ? Who are not responding appropriately to certain pestel issues?….
15 times is not too bad if it is used strategically, such as in places where the point that is being made is supported by external references or enhanced by your own criticisms.
5). Again, there is no definite answer here.
If you choose a suitable comparator, you will find that the pestel analysis will be very similar for both companies. There is not really a ‘perfect’ comparator in topic 8.
You want to be comparing and contrasting the different strategies of the companies against their results for a strong analysis. You will find that you may be focusing more on some areas than others, to help with this try and understand the strategic objectives and mission of the companies.
You will find that once you begin to enhance your analysis by juxtaposing the results of your company and its competitor, the latter’s analysis will equally be better.
It is impossible for me to say whether your competitors analysis is satisfactory without seeing your rap.
As your markers comments have been open-ended, work on the fundamentals discussed in earlier posts to remove any doubts.
Help the marker , to help you pass.
Yes, submit all the documents that have been affected by your changes, including an extract of the financial statements that can be exported to a pdf from your excel sheet.
For your part 2 fail, apply the following guidelines
An explanation of the accounting and / or business techniques you have used, including a discussion of their limitations.
All business models/accounting techniques need to be clearly explained here (and referenced to source), and their limitations discussed, so the marker can see the student has a good understanding of them.Hello @GillianM,
Do we need to provide sources as label in the graphs, table & charts while transferring them from excel to word? for e.g. to clear the examiner that the graphs presented in the word file are taken from the appendices prepared in excel.
Regards
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