Notesale: Turn your study into money

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CASE STUDY WALKTHROUGH
1
...

3
...

5
...

7
...
2/3); scope for prof
...
g
...

Headings should be meaningful, i
...
not just ‘Requirement 1’ or ‘Appendix 2’
AUI: Familiar with info provided → assimilate → provide good analysis
SPS: Analyse problems → Structure solutions → Exercise proper judgement
AJ: Apply judgement → support your conclusions
E
...
on feasibility of new product
▪
▪
▪
▪

AUI – presenting calcs clearly with workings & stating assumptions
SPS – analysing calculation of revenue by product
AJ – comment on assumptions
CR – concluding on viability of product

Ethics & Business Trust Issues can feature in all requirements
...
Gather the relevant facts and/or identify the problem; eg inducements offered by a potential
supplier to win a contract
...
Identify the affected parties; eg the client, the supplier and any intermediaries
...
Identify the ethical issues involved; eg bribery, reputational harm
...
Consider the courses of action and their associated consequences; eg amounts involved are
not material so ignore, or risk of a financial crime being committed
...
Decide upon a course of action; eg refuse the bribe and seek an alternative supplier
...

▪
▪
▪
▪

Facts/figure – WHAT, this is AUI
Reasoning – WHY, this is SPS
Evaluation – SO WHAT, this is AJ
Summary, and way forward – this is CR

Pages 30-31 of Study Manual for examples of SOFP & Cashflow analysis

AUI
AUI 1: Well presented with appropriate headings and columns for comparative figures & movements
AUI2: Clearly showing the £ and % movements on the face of the P&L (AUI is all about P+L
Headings) in the appendix
AUI3: Wider context - make references to other information in AI e
...
budgets, forecasts etc
...
S
...

Therefore, overall E
...
revenue down by 6% representing £660k to £30m (AUI)
...
This is caused by wider market contraction and reduced
advertising budget (AJ)
...


SPS 2: Cost/ margin
analysis
Use ‘marginally’/
‘significantly’ each
time
Vs PY growth of
Discuss mix & connect
to GP’s

AJ 2: evaluating key
costs/ margins

CR 1: Draw
conclusions (under
heading)
Refer to significance of
issues
Figures with reasons
Figures and comment
for ET with impact on
f
...

Low Margins or Cash
= Big worry (key
concerns/ risks)
Refer to significance &
whether loss
sustainable etc

CR 2: makes
recommendations
Make a lot of
recommendations
(review costs,
investigate problems,
diversify, improve
margin/ cash/ credit
control) and ensure
detailed points
Write up as u go along

ASU 3: Wider context
Competitive market,
strong/ weak margin,
industry figures,
forecasts,
cash levels
Write after SPS/AJ but
before Conc

SPS 3: Other
Analysis
If no calc here, do
more analysis work on
boxes above
State what issue is

AJ 3: evaluating
other
Include
recommendations
Consider significance
of issue
Impact on F
...
,
quality, cashflow,
reputation
Scepticism & strategic
impact
Any mitigations?
Good ethical fit with
current business?
Any missing info?

Further
recommendations:
Avoid future
recurrence; check
figures/ factors or
analyse further;
investigate poor
performance;
negotiate with
supplier/ client; pricing
policy review

REQUIREMENT 2 – FINANCIAL DATA ANALYSIS
Requirement 2 will ask you to perform some financial data analysis; namely, an evaluation of a
current strategic opportunity, requiring a calculation, an assessment of any underlying assumptions,
and an evaluation of any related commercial and potentially ethical and business trust issues
...
e
...
2 – to practice R
...
measure can be gross profit
...

Pricing: will come up in a price war if business wants lowest price to sell typically during
recession or product launch
Margin of safety: size of cushion of errors business can have
...
g
...
Consider why the technique above has had to e used and if there’s any
reservations
...
80 in SM for notes on sensitivity analysis
...
g
...
showing 10 vehicles needed in total
(SPS)
...
current market (SPS)
...
Need to reflect lower costs in North England (AJ)
...
s
Identify & comment on assumptions – always quote figures
Identify practical issues, benefits & risks – always quote figures
Any ethical issues

AJ
Evaluate relevant calc
...
scepticism (6P’s: preparer – internal or external, purpose – why prepared/ bias?, precision –
how accurate, predictions – are these realistic; problems – have they been factored in; perspective –
is info objective)
Evaluate issues, benefits & risks
Evaluation AND recommend on ethical issues (i
...
conclude within paragraph related to Ethics)

CR
Conclude, under a heading, on:
▪
▪

Calcs
On assumptions

▪
▪

On issues
On way forward: judgemental with no right answer (examples: Further due diligence; Clarify
assumptions made; Negotiate T&Cs; Resolving any ethical issues)

BRIDGE R1
...
, BROADLY
...
E
...
1 DON’T RECOMMENT
NEW CLIENT IN R
...
g
...
g
...

OR commercial
considerations
Sig
...
e
...

scepticism
Link to industry trends
Link to other streams
Management time/
staffing issues
Reputation
Repeat business
Scepticism of almost
every assumption +
missing info?
inflation
Compare inputs to
benchmarks given
Rare if input
reasonable
AJ 3: Commercial OR
Ethical issues Eval
Include
recommendations
Consider significance
of issue
Impact on F
...
, quality,
cashflow, reputation
Scepticism & strategic
impact
Any mitigations?
Good ethical fit with
current business?
Any missing info?
Conclude

CR 2: makes
recommendations
Confirm accuracy of
input
Market research on
xyz inputs to confirm
validity
Impact of staffing on…
Confirm quality of…
Due diligence on…
Negotiate t&c to…
Consider alternative
projects e
...
This
requirement will require you to perform a brief calculation and will always have an ethical and
business trust issue embedded within it
...
to fin
...
context
...
g
...
e
...
R3 is always written in a way which
means that the way forward is not clear and obvious
...
The key is that your advice is consistent with your analysis
...


Provide each yr of
results separately

Fit with marketing/
strategy?
Significance of OP/GP
R1 linkages
‘Change in
assumptions will affect
model results’
Compare to acc
OP/GP
Follow on work?
Missing costs?
Cash impact

ASU 2: Use AI & CS
info

SPS 2: Operating &
Strategic issues

CR 2: makes
recommendations

Outline contract terms
and strategic &
operational context

Evaluate each
assumption
More detail in this box
Comment on
scepticism
Timeframe of project
Impact on staff time/
costs/ cash/ existing
customers/ suppliers
Prior Co
...

on Ethical issues
Include
recommendations
Consider significance
of issue
Impact on F
...
,
quality, cashflow,
reputation
Scepticism & strategic
impact
Any mitigations?
Good ethical fit with
current business?
Any missing info?
Conclude

Recommendations:
Capacity;
diversification; due
diligence; market
research; negotiate;
reputational issues;
staffing

ASU 3: Wider context

SPS 3: Ethical issues

Linkages to CY
performance of
relevant revenue
stream in R1/ cash
position

Issue (PIPCO), impact
(rep/ profit) &
recommendation
Why is it unethical

Identify which exhibit
from AI R3 relates to
and reference risks/
strat’s within there
Comment on any
names 3rd parties e
...

key customers/
suppliers
Link to business plan
etc

Impact on cash/ costs
Relate to op/ strat
issues

CR 1: Draw
conclusions (under
heading)
Significance of results
Each model/ yr’s
results
Strong/ weak margin
Big worry (key
concerns/ risks)
Query at least 1
assumption &
conclude on it
Proceed or not with
justification i
...
more
than just profit

Confirm accuracy of
input
Market research on
xyz inputs to confirm
validity
Impact of staffing on…
Confirm quality of…
Due diligence on…
Negotiate t&c to…
Consider alternative
projects e
...
)
• Comment on commercial/
operational issues
• Sig
...
?/ project/ margin vs CY

• Mark awarded for succinctness

R5rf
• Concludes on way forwards
• Conclude on ethical/business
trust issues
• Other commercial
Recommendations
•Proceed or not on project with
justification
•Scepticism
•Mark awarded for succinctness

- Key concerns paragraph with
main issues facing business e
...

cash limitations/ weak margins

- Key concerns paragraph with
main issues facing business

TO GO THROUGH ES MARKING GRIDS OF RECENT EXAMS

• Concludes on way forwards
• Conclude on ethical/business
trust issues
• Other commercial
Recommendations
•Proceed or note on project with
justification
• Mark awarded for succinctness
•Scepticism
- Key concerns paragraph with
main issues facing business

EXAM TECHNIQUE
Binder tips:
➢
➢
➢
➢

Prepare a list/ matrix which summarises connections between exhibits
Prepare glossary of names, abbreviations, acronyms
Develop checklist of ethical issues & wider context points
Keep clean copies of AI pages that contain numerical data

Report Tips:
➢
➢
➢
➢

No headings in ES
Bullet points only in recommendations area
Add to ES after each requirement
Wider context issues often come from media articles

Time tips:
Each appendix to take 15m
Each marking grid to take???
Don’t spend too much time planning
Write up your recommendations as you go along your planning marking grids
Tailor all recommendations – from generic listing – to exam requirement
Folder should be divided into sections by requirement
Use ‘/’ to give % and absolute change together, e
...
‘4
...
)

operational/strategic issues (2 each)

(with figures)

Comment on commercial/ operational issues

Comment on main risks/opportunities

Comment on key targets/

Sig
...
?/ project/ margin vs CY

KPIs

Dealing with forecasts and uncertainty

Dealing with forecasts and uncertainty

Comment on changes in sales mix (with figures)

Breakeven?

Breakeven?

BIG WORRY

MAIN PRO & CON

MAIN PRO & CON

Why did sales mix change? (with figures)

Concludes on way forwards

Concludes on way forwards

Mark awarded for succinctness

Conclude on ethical/business trust issues

Conclude on ethical/business trust issues

Comment accounting adjustments made/ ET

Other commercial Recommendations

• Need to address problems promptly/ maintain repuation

Other commercial Recommendations

 Does it fit with elements of Strategic plan?

Other commercial Recommendations

Business critical issues must be resolved

Proceed or note on project with justification

Comment on GP

TALK ABOUT EXTRA TASK

Proceed or not on project with justification

NO HEADINGS IN ES
 What is the driver of weak/strong growth
 Lack of analysis of both divisions prevents full review

- Key concerns paragraph with main issues facing
business: crucial relationships with supplier/ franchisees;
business measure (KPI) reviews - anything affecting
strategy negatively ; anything related to bribery/ timing
pressures or other pressures; mention of competitors - dont
be pressurised/ why invited to tender?/ Bias in data source?

- Key concerns paragraph with main issues facing
business: crucial relationships with supplier/ franchisees;
business measure (KPI) reviews - anything affecting
strategy negatively ; anything related to bribery/ timing
pressures or other pressures; mention of competitors - dont
be pressurised/ why invited to tender?/ Bias in data source?

- Key concerns paragraph with main issues facing
business: crucial relationships with supplier/ franchisees;
business measure (KPI) reviews - anything affecting
strategy negatively ; anything related to bribery/ timing
pressures or other pressures; mention of competitors - dont
be pressurised/ why invited to tender?/ Bias in data source?

ASU 2: Use AI & CS info

ASU 3: Wider context
Sustainability important to market
Comp
...
• Indication that
management focus is on Franchising from increasing sales mix distracted?

State what issue is

Conclude on ET

Address problem promptly

Overall Rev + Individual rev with 1 reason
Overall GP + Individual GP with 1 reason
OP with 1 comment
ET: Way forward & recommendation
Low Margins or Cash = Big worry (key concerns/ risks)
Refer to significance & whether loss sustainable etc

SPS 2: Cost/ margin analysis
Use ‘marginally’/ ‘significantly’ each time
Vs PY growth of
Discuss mix & connect to GP’s

AJ 2: evaluating key costs/ margins
Economies of scale?
review whether likely if FO targets (£15m/£1m) met by next yr

Volume or price increases? (market price sensitive)

if OO increased, good as low barrriers to entry… other wider
context '

review each cost line
low margin business, new entrants undercut expect customer retention to improve with Cost control?
& compete on price
cleaning product mark up still 20%
new CRM investment
staff exp 85% of cleaning costs in industry
• Admin expenses up probably to support large intake of new
franchises AND new CRM system
customer churn, industry typical is 60%
state whether targets easily met or just missed

Link above points to CY developments
given in EM

Investigate the cause of the issue further
Seek legal action over the issue
Peform DD & confirm ethos in line with SL
When dealing with forecasts state it creates inherent uncertainty
'Any new changes will take up management time'
Cash impact??
'Negotiate / resist pressure of…'

AJ 3: evaluating other
Include 4 recommendations
Consider significance
Impact on F
...
, quality, cashflow, reputation
Scepticism - Any missing info? & strategic impact
Any mitigations?
'Confirm press reports' ¦ 'Legal action time comsuming'
Good ethical fit with current business?
sign code of conduct for bribery & confidentiality & corruption &
wastage dealing

CR 2: makes recommendations
Make a lot of recommendations (review costs, investigate
problems, diversify, improve margin/ cash/ credit control) and
ensure detailed points
Avoid future recurrence; check figures/ factors or analyse further;
investigate poor performance; negotiate with supplier/ client; pricing
policy review
Further analysis by revenue stream/ further cost analysis
Implement cost control ops in OO stream to boost margins
Continue to grow franchise business as hugely benefits profit
margins • Investigate reasons for continued high level of customer
churn • Review customer relationship management, deal with
complaints promptly • Review competitors' offerings to ensure
Scour is competitive • Review CRM, keep on top of complaints •
Split overheads/ Admin by FO/ OO • Renew focus on OO, dont get
distract by FO increase • Address problems promptly • Obtain
legal advice • Further review of cost that goes up & implement cost
control measures

ASU 2: Use AI & CS info

SPS 1: Calculation

Outline contract terms and strategic &
operational context

When dealing with forecasts state it creates
1
...

refer to it for all r2 and r3 calcs

Breakeven?

AJ 1: Evaluating calc
...
Fit with strategy?
3
...
Cashflows? Consideration of model may be just for a year - not
multi yr model
5
...
no guarantee that SL's forecast of costs accurate so profits could
be higher/ lower than model assumption
7
...
g
...
Link to CY performance in R1
2
...
AI info on named bodies
4
...
Mentioned in Strategy - for any info given
in R2/3?
Any time a comp
...
g
...
scepticism
Talk about bargining power

Any new changes will take up management time
Economies of scale?
Bias in data source?

SPS 3: Commercial OR Ethical issues

1
...
Why is it unethical

3
...
Impact? on F
...
, quality, cashflow, reputation
Any new changes will take up management time
When dealing with forecasts state it creates inherent uncertainty
Could have body behaving aggresively (state how) - damages rep discuss with them

AJ 3: Commercial OR Ethical issues Eval
Scepticism & strategic impact; any missing info?
sign code of conduct for bribery & confidentiality & corruption
SL takes ethics seriously, high quality work, damage to rep via
association'
Turn each issue into recommendation:
• Address problems promptly
• Investigate the cause of the issue further
• Seek legal action over the issue
• Peform DD & confirm ethos in line with SL
• 'Confirm press reports' ¦ 'Legal action time comsuming'
• Obtain legal advice

'Negotiate / resist pressure of…'
All media articles are relevant to strategy

CR 1: Draw conclusions (under heading)
1
...
Significance of results
3
...
Main Commerical issue
5
...
Proceed or not with justification i
...
more than just
profit
7
...
Extra task

CR 2: makes recommendations
Confirm accuracy of inputs/ review figures
Market research on xyz inputs to confirm validity
Impact of staffing on…
Confirm quality of…
Due diligence on…
Negotiate t&c to…
Consider alternative projects e
...
Significance of OP/GP vs current OP/GP
inherent uncertainty
Perform sensitivty analysis or at min
...

2
...
Follow on work? Missing costs?
4
...
Consider synergies between FO/ OO
6
...
‘Change in assumptions will affect model results’

non-profit benefits, e
...
strategic plan

ASU 3: Wider context
1
...
Cash position in CY
3
...
COVID-19 - less offices open
5
...
mentioned, 'winning work
would take away work from them'

SPS 2: Operating & Strategic issues
Start date/ capacity/ impact on current
customers/ staffing issues/ inflation/ prior
experience in this field?, any missing info
(e
...
excludes cashflows)?/ arbitary basis
for inputs given?

AJ 2: evaluating operating and strategic issues
Talk about bargining power

Any new changes will take up management time
Economies of scale?
Bias in data source?

SPS 3: Ethical issues

1
...
Why is it unethical

3
...
Impact? on F
...
, quality, cashflow, reputation
Any new changes will take up management time
When dealing with forecasts state it creates inherent uncertainty
Could have body behaving aggresively (state how) - damages rep discuss with them

AJ 3: Commercial OR Ethical issues Eval
Scepticism & strategic impact; any missing info?
sign code of conduct for bribery & confidentiality & corruption
SL takes ethics seriously, high quality work, damage to rep via
association'
Turn each issue into recommendation:
• Address problems promptly
• Investigate the cause of the issue further
• Seek legal action over the issue
• Peform DD & confirm ethos in line with SL
• 'Confirm press reports' ¦ 'Legal action time comsuming'
• Obtain legal advice

'Negotiate / resist pressure of…'
All media articles are relevant to strategy

CR 1: Draw conclusions (under heading)
1
...
Significance of results
3
...
Main Commerical issue
5
...
Proceed or not with justification i
...
more than just
profit
7
...
Extra task

CR 2: makes recommendations
Confirm accuracy of inputs/ review figures
Market research on xyz inputs to confirm validity
Impact of staffing on…
Confirm quality of…
Due diligence on…
Negotiate t&c to…
Consider alternative projects e

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