Top 10 issues video - CIMA SCS May & August 2020 - Most likely unseen issues - Runnabout
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Top 10 issues video - CIMA SCS May & August 2020 - Most likely unseen issues - Runnabout |
Top 10 issues video - CIMA SCS May & August 2020
In the CIMA SCS Top 10 Issues May & August 2020 Analysis, Astranti CIMA tutor Peter Stiff provides an analysis into what believe are to be the most likely issues to be tested on in the final CIMA Strategic Case Study exam this May. These predictions are also based on our analysis of previous CIMA Strategic Case Study exams, which have highlighted some commonly tested issues and some that are more likely to appear than others.

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Text Transcript of the top 10 analysis
Hello
and welcome to this astrology oppressing video this is the top 10 most like the
unseen issues for the may and all the strategic case study exam for run about
so before we start I'm just going to go through a bit of an introduction to
this particular video and where I've got the information on and what you need
to do with said information so however I came up with these top 10 well first
of all you look at the focus in the precinct if there's a lot of material in
the pre scene on a certain topic then it's likely that there is some kind of
importance of that topic it's likely to be brought up in the exam so there's
more to talk about and that leads into the second point here the degree of
importance attached to it by the examiner but a particular section extends
beyond purely warts in the pre scene but also what CIMA like to examine for example ethics it may
be that there's no real mention of ethics in the case study but ethics is considered
very important by CIMA and therefore
they are likely to examine it next is the strategic importance.
How important is it to the organization if a certain
topic is very important to the company for example say they're suppliers if
they rely very heavily on a certain supplier then it's likely that there might
be an issue on the supplier if something were to happen to that supplier what
impact could that have on the business and also just more general experience in
doing these videos in creating mock exams and reviewing exams in the past the
typical kind of issues that come up and what kind of things have the examiner
brought up in the past and my final point here is about how easy it is to write
issues on that subject the people who write the exams are obviously people too
and they will go forms that they though for once they know that they can write
good questions on so what do you need to do for these issues well first of all
it's important to prepare key models so this will be things like your SWOT exam
like u.s. Watts and as it's like your pestle analysis because building up this
information now whether helped you to adapt the new information given you in
the unseen or help you to have that back context to apply the unseen material
next we need to do is practice exam questions on these issues if this will help
you to understand the kind of questions that will be asked around these topics
and how to answer them and also this next session here it will help you to plan
these answers in your mind so that when you go into the exam and you start
writing you'll already have a background to in which to apply this new
information you already have certain points to bring up in your head as you're
writing for them and I've also put some more generic things here such as the
advantages and disadvantages of these certain topics where they would be used
and how models can be used to support them so let's move on to the top ten
issues now and we'll start with issue number ten which is funding and the
reason why I've chosen funding is because it's a key F three topic it links to
a lot of the important topics from the p3 syllabus looks at equity funding debt
funding cost of capital etc .
most importantly it's often used as part of
other questions you're not likely to get a question that is just on funding as
in an entire exam question that's just talking about equity funding or debt
funding etc it's often part of other questions perhaps you've got to analyze a
project and then you have to mention you don't have enough money for it right now
and we have to source additional funding and where would we get that funding
from and it's also mentioned as part of the role that you are playing in these
strategic case study exams so if you think back to those statements those core activities etc it
mentions about sourcing finance sourcing funding and this is a very common
issue it's arisen in many different case studies in the past and there's no reason
to suggest that it wouldn't appear again particularly given its use as an
add-on and it's mentioned in the role given to us by SEMA and it's important to
remember that cash is going to be needed to support large investment projects
and as many potential ones that run about might pursue and they don't necessarily
have enough funding at the moment and eased in cash and cash equivalents to
source the funding needed for these different projects and so like the issues
could be for a new project .
it's an acquisition they're going to purchase
a smaller company or they're good to purchase a smaller supplier so they reduce
their dependence on managing robotics perhaps they've got new projects they
want to branch out into several new cities or they want to start using a
different service or they want to start offering a different service in
addition to the hover boards they want to do scooters or something like that or
just general organic growth as well they want to invest a lot into current
operations to expand upon it or they want to improve their head office or
whatever it may be it may also be for a short term working capital issue in the
pre-seen we saw that the cash and cash equivalents was just over two billion G dollars
and that sounds like a lot but remember that they did have trade payables of
over 7 billion GE dollars already so they couldn't actually pay those trade
payables with the cash that they have moment and of course there's a lot of other
things that go into working capital there can't be pushback that must be paid
staff salaries for example you can't push back paying star salaries tell them
that I will probably have money in a few months time to pay you but for now
just carry on as normal without getting paid can't arrange a credit line like
you could with a supplier and it's most likely to appear as an add-on to an investment
issue has already stated so it could be that we are going to acquire this
particular company or we do want to branch into this particular market or export
overseas etc but we don't have the money at the moment so we need to raise
additional financing because we either can't afford it at the moment or if we
do use all the money that we have we may run into short-term working capital
issues .
so
forth it's all conjoined together and some key points here from the pre seen
that you can use in your analysis it's already mentioned they have just over 2
billion or just over 2.3 billion G dollars in the bank at the moment but a lot
of that will be needed for working capital given that the current liabilities
are already much higher in fact 3 times higher or so and that of course will
need to be paid within the trading year and as such what we must remember what
you must remember as a student is to not say we've got 2.3 billion G dollars
available let's invest in this 2.3 billion dollar project because of course
that is not what that cash for that cash is not to be used free on anything
that takes your fancy a lot of that is going to be needed a for working capital
so we do potentially to either raise more finance in certainly in order to pay
for these project or source of funding elsewhere it's also very prudent to have
a reasonable amount of cash in cash equivalents for working capital so also
that cash and cash equivalents figure in the statement of factual position
shouldn't drop below a certain amount because that cash is me could be needed
for a rainy day.
so
to speak as I mentioned here they budgeting for your cash flow is critical you
must prepare four times we may have negative cash flow perhaps on a monthly basis
and therefore have a reasonable amount of buffer cash ready for those situations
and depth is already quite high as well gearing at fifty four point eight two
or 121 point three percent there which method you usually use depth of equity
or debt of a debt plus equity there's no right or wrong method to use as long
as you are quite clear in which one you have used and you always use the same
method so you're not preparing one year to another year or one company to another
company using different methods but they do have a reasonable amount of tangible
assets quite a high amount of tangible assets over a hundred and a 28 and 129
billion G dollars worth and that could be used as security to raise a debt
again so it could be that they take on additional debt funding if you're wondering
that these gearing ratios were quite high and that could cause a problem for
raising additional debt fund II that is possible and banks will look at that but
what I would also say is that this is a tech company and tech companies are
renowned for having very high gearing ratios and that companies like Tesla in
the past I've had gearing ratios in the hundreds of a percent and the suggested
order for raising funds is to start with using cash if you have cash available
we know cash might be a bit tight but it is for very very small projects as the
odd 100,000 G dollars here and there there know perhaps it's best to use cash
because money already have there's no real risk involved if you need to raise
more than the best thing to do is to use debt funding either secured against
assets and from a bank and finally equity and equity is usually the last resort
because of the cost of all it cost millions to raise additional equity funding
and it can take a month to take up to a year to raise that finance but this is perhaps
the best way if you need to raise an enormous amount of money if you literally
need to raise tens and tens of billions of G dollars then this is the best
method to do that and the reason why it is better is because you do not have to
pay it back dividends are optional and there's no need to pay back the capital
investors invest at their own risk if they lose money that's on them that's not
necessary on you as the company cost you you want to provide a good return to
keep people investing in the company but unlike debt which does have mandatory
interest payments it is perhaps sometimes an efficient way of raising a very
large amount of money at a better cost to the business in the long run it's
expensive in the short term but when you have high levels of debt you have very
high interest payments and that can cost a company in the long term but for
medium levels debt financing is often better because it's very quick it's
generally low cost to raise that and when you are thinking about the people
who've provided you or the stakeholders that provided the funding need to put
those into your men lows matrix and your stakeholders matrix so where do they
sit and that also determine .
how
you treat the bank's often sit in the high power low interest in that they
don't really mind as long as you are paying off your interest payments they
don't really care whereas perhaps a really big powerful institutional
shareholder would be in your high interest and high power because they will be
a lot more interested and want to be much more involved in the way the
organization is being run issue number nine now and that's ethics and ethics is
it chosen again like funding because it is the most commonly examined SES topic
and fact it's not even one of the most commonly examined is that the most commonly
examined - topic at be strategic case study there's in most variants in fact
since the strategic case that he was brought in all the way back in March 2015 there
has been a some form of that ethics question be it an add-on issue would be it
consideration be it an actual full question on ethics itself in 40 to 60 percent
of all papers of that have been sacked in every single sitting since the very
first one back in March of 2015 so 40 to 60 percent of the you watching this
video right now could get an ethics question in their exam .
it's
very important to see CIMA wants to be seen to be testing to people on ethics
it's very important parts of being a measurement captain Seymour wants ethical
people to be qualified management accountants so if you mess up really badly on
an ethical question and you suggest something that's completely unethical then
they'll be looking at you through a microscope thinking is this the person that
we want as a qualified management council representing the body of a qualified
management accountant and there's some specific focus in the pre seen the
nature of the industry does tie in with ethics not necessarily in a morally
right or wrong but with health and safety is a big issue here and there was
talk in the articles as well about health and safety and also the values and
the social responsibility of the organization as was mentioned in the value
statement in the section along with the mission and vision statement so like
the issues that could be to do with the environment and beneficial potentially
for a company like run about it could be that there be some new laws brought in
that affects motorists and affects public transport etc but as a very clean
economical efficient way of traveling like using a hoverboard it might be of
benefit although it could lead back to a question about where our electricity
is coming from that's being used in the docking stations is it coming from
renewable resources can we get additional tax credit if we do use one sir from additional
sustainable and recyclable sources etc
as
mentioned specifically in the values looking to reduce the carbon footprint and
that will also have to factor in how we operate in the things we suggest in
relations with our suppliers as well our our suppliers using the right sorts of
materials that are beneficial and sustainable for the environment are they
using recycled energy etc the time with our legal and safety responsibilities
as well who do we owe a duty of care to to be our duty of care to our
stakeholders such as our employees the users etc and all of this can have a
negative impact on the reputation of the organization as well and that's
important for raise that duty of care that what do you to think about when you
are answering your question on ethics and other issues that have arisen the
past rings ethics commonly in a strategic case that exams is issues over the
treatment of suppliers and also the achievement of employees and suppliers we
have a very big powerful supplier in managing
robotics who we rely on and they could be mistreating their employees we don't
know at this point there's no mention of supplier audits etc they're based in a
different country they may have different laws etc but we are expected to make
sure that they are treating their employees well and to essentially stop
operations with them if they are not example of Apple when it was using very
large powerful Chinese manufacturer and there was a lot of mistreatment of
staff going on and Apple wasn't auditing their suppliers and it was found that
there was a lot of this mistreatment going on an apple got sort of blame for it
even though they weren't directly responsible confidentiality importance well
ensuring that this is often quite more internal to the organization rather than
external to the organization or it more to do with individuals within the organization.
if you have a manager or someone like that who
is telling you things that are no really quite bad that they've been doing and
if it's not if it's found out then there's gonna cause a lot of problems with
the organization that you know do you keep quiet or do you have a duty to
disclose that information to make sure that people are aware of it and that
this issue can be resolved to show you're not passing on information about
users they sign up to our app and making sure that we're not selling into third
parties without approval first governance as well is there enough governments
in the organization or is it complying with the code of governance the board at
roundabouts was good but there have been issues in the past where it hasn't and
finally bribery never ever try to justify bribery in a senior case study exam
because CIMA will not like it one bit bribery is never acceptable in any circumstances
and this even includes non direct bribes as in rather than the old traditional
cartoony here's a briefcase full of money to ensure that we get the contract
more the taking them out treating them to a nice five-star restaurant at a
five-star hotel no buttering people up to try and get a contract and I
appreciate it in the real world ethics is quite great and you do have to balance
it with business needs etc
but in the CIMA exam the attitude you want to
take is that ethics is quite black and white is either ethical or it's not ethical
and this is because SEMA expects you to take the moral high ground expect you
to take action from an ethical perspective and to always act ethically and what
I would suggest doing as well is to use your recommendations in your ethics
questions and when you're talking about ethics but do it from a short and long
term perspective and that not only boosts the amount of points you can bring up
and material down it also shows you are dealing with it in the way that a
senior manager should do so you bring up a short-term fix to deal with a
specific issue perhaps someone's been injured on one of the other boards so you
change the safety procedure that's the reactive issue to deal with that but
then you also think how can we stop other people from getting injured before
could we perhaps put increased training get new equipment by other boards that
are safer to use etc what we're doing is we're then preventing it from
happening again rather than just dealing with specific issues as they arrives
we're preventing the general theme of incidents such as accidents from happen
again and also pepper in the phrase if you can ethics is the right thing to do
it's doing the right thing is being ethical as some key theories to use of CDC
myrrh ethical principles integrity confidentiality professional behavior
objectivity and competence since you care are part of the SEMA principles and
that's very important it's important to use that but what I would also say even
though the exams report says that you can basically always use this model when
answering ethical questions is talked about the model mention the model maybe
mention the five principles but then just talk about the one that is relevant
if it's a confidentiality question say here are the five ethical principles
integrity governance generation behavior etc the issue here is confidentiality confidentiality
is XYZ here's why the confidentiality breach what we must do et cetera don't
spend loads of time talking about integrity in talking about professional behavior
and talking about objectivity because if it's a question about confidentiality
then that's the only water that you need to use fully when answering the
question otherwise you'll get no marked it may be your great it may be all
correct what you've written but if it's not answering the question it will not
get you marks and another model here the American accounting Association
resolution model now of course this is a American model and it's not directly
examinable in their fee CIMA model you do not need to learn it but it does have
a few good ways in which you can assess ethics and also some key headings
either perhaps create a plan around it in your exams.
such as Judy UK who do we owe a duty of care
to and you speak about who you care to ethical consequences was the end result and
Wiser's bad values norms cultural norms internal codes illegal and the regulations
and et cetera it's a way of building a plan to answer an ethical question use
these as headers and turn these headers into paragraphs to get your marks so
thank you for watching this video I hope you have enjoyed it and more
importantly you have found it useful to finish by just telling you a few things
about the products that we produce here at Australia and the ones of that are
part of our course of these materials can all be purchased as part of the
course or purchased individually so we have our study text we have three study
texts for all the object to test exam so free study text for e 1 P 1 F 2 F 3
etc but we also have the study text specifically for the case study exams split
into two parts the first is about how to approach the exam how to analyze the
information how to plan your answers how to write your answers and also the
second part which looks at the key theories from the objective test levels that
are relevant to the particular case study so if you are looking at p2 p3 or
sorry P 2 F 2 e 2 for the management exam F 3 p3 e 3 for these strategic a
study exam and so on we have our course videos.
which looked at how to plan your answers how
to manage your time effectively these are the key reasons why people fail the
exam if our pre seen analysis which looks at the precinct and a lot of depth
applies key information to that and also concludes with these strategic
analysis where we look at the various different models in the seam of syllabus
and apply them to the case in also the top 10 most likely issues to arise in
your exam to me we have a 70 to 80% accuracy rate on our top ten issues our
industry pack which details in great depth the history and the current
contemporary issues within the particular industry that's the pre seen is based
on we also have 20 to 25 industry examples that you can use within your answers
we have mock exams that can be purchased with or without marking and feedback where
you can get some real exam practice in look for the kinds of things that the
examiner is may bring up in the exam and also get marking and feedback from
expert markers who have marked for SEMA and for us for many years who know
exactly the kind of things that exactly the kinds of things that the examiner
is looking for exactly the kinds of mistakes that students often make and can
provide lots of detailed feedback to ensure that you improve on your
performance you also have our master classes which are two day-long classes
which look at all the key issues facing students in the exam we will also go
through live planning showing you how to plan your answers effectively how to
write your answers effectively again key things that the caused people to fail
the strategic cased of the exam or any of the case study exams for that matter
and also if you do sign up for our course provided that you have filled out your
forms prior provided that you've submitted your marks provided you have done everything
to show that you have really given it your all to try and pass this exam we
also offer a pass guarantee giving a free reset to anyone who fails the exam .
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