How to Tackle Calculations in the T4 Exam by Nick Best from Astranti




1. There aren’t many ‘theory’ calculations in past TOPCIMA papers, that's to mention many of the calculations require a transparent head and customary sense instead of technical knowledge of calculations from previous papers. There’s little point therefore spending lots it slow} reviewing past technical knowledge – it slow is far better spent observing recent CIMA T4 exam questions.

2. The most exception to the current is primarily the NPV calculation which turns up frequently and wishes to be ready to be meted out very quickly.  In some cases there could also be three options with an NPV required on each. during this case there's usually only one revenue and single cost line so don’t be postpone, they’re usually straightforward, but you are doing need to work quickly to induce everything done.

3. Other calculations which require some theoretical knowledge have turned up including payback period (discounted and undiscounted), share valuation, return on investment. confirm you've revised these topcis.

4. Many calculations are simple calculations of annual profit, comparison with budget or income forecasts.  These just require you to stay track of the figures carefully. Be diligent throughout.

5. Probably about 75% of the time, the question is explicit about what's required.  Phrases like ‘The Finance Director has asked you to calculate the operating profit for every option’ often come about.  Sometimes the calculation required is strongly hinted at with phrases like ‘the target Return on Investment is …’ or ‘The company uses a value of capital of…’.

In both these cases it isn’t uncommon to seek out students who have calculated something completely different to it expected, and infrequently something that isn’t helpful to the choice being made. beware and do what the examiner wants, then remember to use that information once you are analysing the data within the body of your report.

6. Occasionally it's simply up to you to choose what calculation, if any, would help the corporate to form a choice. consider carefully about this. it's frequently the case that students calculate say a unit profit when the entire profit is that the deciding factor.  Read the question carefully and rely on what's going to best help your analysis. 

These questions are unlike anything from previous papers so practise of TOPCIMA style questions is essential. Do as many practise questions as you'll be able to, and make sure you do them below strict regular conditions, so you're practising doing them quickly and then you permit many time for the remainder of the report. Calculations ar vital, but not so important that you simply should spend any further than 20 to 25 minutes on them within the real exam.

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