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Hello Learning Lumarium/ Trephanie
I decided to make use of SWOT and PESTEL for my business analysis but I am concerned about conflicting points between SWOT and PESTEL and how do I deal with them? Also do yo advise any other model to use in liaison with SWOT apart from PESTEL?
Thanks in regards
I need an urgent help !!
While doing the financial analysis, should one consider the Consolidated Financial Statement or the Standalone Financial Statements are fine ?
please let me know as i am due for submission this period and will fail if this goes wrong as its my last attempt
thanks !
@chandan – SWOT & PESTEL should not overlap too often. This is because PESTEL describes the industry/macro situation. While SWOT focuses more on the company itself and thus is more micro.
This 2 models go well together as one takes the macro while the other takes the micro perspective. Another example of such a pairing is (a) Porter’s 5 Forces and (b) SWOT.@jahnvi – they leave it to your choice. Any annual report published beyond the 90 days rule HAS to be used. Its mandatory. Anything within the 90 days is up to your choice and you wouldnt be penalized if you did not use it.
@mango – standalone financial statements are fine. It is important that you compare apples with apples. So if you use standalone statements, please ensure that you can find the same for your competitor as well. It would be painful to compare consolidated FS with a competitor’s standalone.@learningluminarium – thank you so much for your advice. yes my competitor also has their standalone financials and i have used that for comparison.
my company is a mobile telecom, and they have subsidiaries that are not all related to mobile telecom, so i decided to go with standalone.
hope that is okay.
@Learning Lumarium, My mentor has advised me to do only SWOT and elaborate it more rather than doing SWOT and PESTLE both.. do you think its risky to just include SWOT
@ch305 said:
@Learning Lumarium, My mentor has advised me to do only SWOT and elaborate it more rather than doing SWOT and PESTLE both.. do you think its risky to just include SWOTPeople who have passed mostly have apparently used at least 2 models for each analysis. Using just one is risky coz u dont know if ur one model is perfect. If for eg they dont like it much u cud at a disadvantage. Having 2 models is like have very good prospects for passing provided both are reasonably good
When u have the chance take it. Will certainly take more effort but it is way a lot better than not passing and regretting not doing it later.
Try to think every possible wrong thing the examiners cud pick up from ur RAP thinking from their viewpoint and u will see the improvementAs I have said probably 1000+ times: evaluation is key to passing the RAP. This means providing proper explanations linking the models to performance. If you are omitting PEST you are already limiting your chances of producing a decent evaluation and analysis.
I suggest you use the search facility to pull up our forum on ‘OBU marker speak’ and read the marker feedback if you want to check out how important the models are to passing.
If word count is the issue again I have said hundreds of times to cut out all the superfluous comments in Parts 1 & 2
@trephena, thanks a lot for your valuable feedback..
I have worked on SWOT and PESTEL both.. but it is my mentor who is insisting to just focus on just one and elaborate it more rather than just listing out the points in short of both SWOT and PEST.. so wanted second opinion…
Yes I just read your article on how not considering the wider environment caused failure..
@trephena
quick question for you, part three of my RAP is 4660 wrds but my overall word count is below 7500 words. Would this be an issue as they said 4500 words for part three?if one company is using GAAP and the competitor IFRS, is comparison still possible ?
As you have obviously done so much work already on Air Canada and WestJet I think it would be a big mistake to ‘switch horses’ at this late stage.
In fact you might be able to use the fact that they tend to operate in different markets to account for some of the differences in their performances. Regarding the results expressed in thousands and millions you will mainly be comparing ratios so it is irrelevant in most respects.
Being a cynic I am not a great fan of mission statements – I often wonder if anyone (apart from those who cobble them together) take them seriously. For example ‘We strive to be one of the top five airlines in the world’ -most airlines might similarly state this but it comes down to logistics – how could a Canadian airline reach this from its actual geographical position? European airlines are literally better placed to achieve this as Europe is a ‘hub’ bridging the Americas with the East. The airlines in the Arabian Gulf with rich backers are also reasonably well placed in terms of having the money to buy newer larger aircraft and Dubai is one of the largest airports now in the world. So I would say dream on WestJet!! However I will be kinder about their core values and big oak trees from little acorns grow – so maybe in the top 5 in about 2050…. (it was 5 wasn’t it and not in the top 5th? As the latter would be a more reasonable ambition). However enough about dreams and ambitions…
…and yours is to pass. So go full speed ahead with what you have but be mindful of hyperbole coming out of the boardroom and don’t forget that when it comes to the KPIs that good RASK and CASK, load factors and aircraft utilisation will show who is likely to be the overall ‘winner’ between your two companies.
Hey trephana,
I have 2 doubts:
My companies are Delta airlines(main) and American Airlines(competitor)
I am using 31 December 2014,2015 and 2016 financial statements1. Should I explain the differences from 31 December 2013 to 31 December 2014 in my analysis or will 31 December 2014 be taken as the starting point and I only have to analyze and explain 31 December 2014-31 December 2015 and 31 December 2015-31 December 2016 (for ratio analysis)?
2. I have used PESTEL and Porter’s Five Forces. Are these models fine to use?
@Learning Lumarium
If two companies are using different accounting policies (GAAP and IFRS) is comparison possible ?
Hi,
please recommend the ratios I should do for my financial analysis.I’m doing SWOT and PESTEL for business analysis so I’m ot to worried about that now.My mentor has told me to do Op margin,Net profit margin,ROCE and gearing.I fell these 4 are’nt enough so please tell me what ratios I should do other then these.I’m doing american airlines(main) and Delta btw.Also,is it a good idea to write about the advanages and disadvantages of ratio analysis,SWOT,PESTEL?PLease let me know ASAP.I would like trephanas reply.Others are welcome to offer advice.The more opinions I have the better.Thanks.@ Sarmin Yes those ratios are fine but you need additional ones like EPS. Although payables and receivables are too complex for you to calculate (because the way airlines operate) and stock is irrelevant you should mention the current ratio and talk about cashflows. If you have read this forum you will know that I bang on about KPIs (as that is how airlines themselves assess their performance). Asset utilisation is important – see if you can find the aircraft utilization figure in the reports and load factors and you should also mention asset turnover as airlines are capital intensive businesses.
@syfar42 as it is a 3 year analysis you should really be looking at the full 3 years
@mango1991 – The tutors at the Learning Luminarium do not advise this and suggest that both companies should be using the same reporting standards as the perceived differences may just be because of the different treatments so are not always valid for analysis purposes . So either both GAAP or both IFRSYes it is fine to use statements that have been available less than 90 days – this is voluntary. As you have realised if the latest statements were published 90 days ago or longer than that, then they MUST be used – otherwise you can be failed for out of date information.
You then work backwards in terms of time in selecting the 3 years (but when doing your analysis you work forward in time e.g. start discussing the oldest year and track the trends through to the current period)
what about witing about the advantages and disadvantages of ratio analysis, swot, pestel?Is that fine or is it a waste of words?
Hi Trephena,
Are RASM(revenue per Available seat miles and CASM(cost per..) KPIs?My mentor told me to do them and I am doing them.Also,I am a bit time pressured atm with 19 days left :’).I’ll try to include the ratios you recommended if I can manage my time well.Hello,
I am worried about my word count of RAP..
Without in text citations, my entire RAP’s word count is 8837 words.
How do I reduce my word count? Can I cut down on any ratio?
PART A is of 895 words
PART B is of 2112 words
PART C is of 5830 wordsI did ratio analysis, SWOT and PESTEL
Financial Analysis:
Revenue analysis
Operating Profit
Asset turnover
ROCE
Current ratio
Gearing ratio
Interest Cover
EPS
DPS
Receivable days
Payable daysI understand receivable days and payable aren’t that relevant so I have kept them very short.. barely 300 words both of them together..
I was considering removing interest cover.. is that a good decision? it[ll reduce 500 words… any other way in which I can trim the word count?
Reduce your part B to 1400 – 1600 words.
Remove payable days receivable days altogether.
Remove DPS, because EPS will be enough. And try to write in concise manner for all other ratios. Only put relevant and material reasons in you analysis.For ratio analysis, i used operating profit margin, return on assets, fixed asset turnover, revenue per employee, current ratio, net debt/equity ratio and interest cover.
i am worried about ROA and fixed asset turnover. Both looks similar. should i go ahead with these or should i use some other ratio.
What are possible reasons for if revenue per employee fluctuates. For cathay pacific, there have protests from its employee over low pay and i used the dissatisfaction of employees as a reason, the protest also caused delays and flight cancellations. what other reasons can i include
@ehsanshah said:
Reduce your part B to 1400 – 1600 words.Remove payable days receivable days altogether.
Remove DPS, because EPS will be enough. And try to write in concise manner for all other ratios. Only put relevant and material reasons in you analysis.Are you sure?The rap document said Part B is supposed to be 2000?
Part 1 – keep as brief as possible.
Part 2 – as long as you you state limitations of you data then trim out most of the other things
Part 3 – payables and receivables are pretty pointless for airlines as they have complex cash models (use search and read why I suggest NOT to use an airline for Topoc 15 to understand why)
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