Dfs 02/12/09
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took me 1hr 45. I always finish first for some reason. Did a good memo in section 2.1 but didn't do to well in 2.2 and did everything apart from my PPE IAS Q and the cashflow in section 1
If everything else is correct will I have passed?0 -
Dfs
Have just got back from resitting DFS - yes I'm one of the ones that failed section 2 in June 2009. Everything balances and I recommended her to withdraw investment but also commented on 2008 and 2009 net profit detoriated and they had to refinance but still profit etc was not showing any improvement. Hopefully passed but will have to wait til Feb.0 -
yeah i put that too, they did have an increase in PPE though which could of generated more profits in following year and that was reason for high gearing but I still put too risky!0
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i didnt compaire gross profits for 2008 2009 as it said not to is that right?0
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yeah that's right, I just added that in my conclusion as a general comment in case it got extra brownie points!0
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I didn't either i'm sure it said to leave the Groos profit and NEt profit figures as she understood them0
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All mine balanced and i too said to withdrawn from investment.
Gearing and Interest cover same as mentioned earlier in this thread - so very happy with it. I did comment on the net profit and revenue being worse in 2009 in the summing up of the report, but i did not do the 2 ratios for NP and GP as it told you not to.0 -
I didn't mention the Gross or Net profit formulas as email said she understood0
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for such an easy paper why do i have doubts and feel i will be doing resit in June?0
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Snap!0
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The thing is if it was an easy paper then the pass mark will be high and it will come down to the wording for the IAS's !! oh dear..........0
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lilac_angel wrote: »I didn't either i'm sure it said to leave the Groos profit and NEt profit figures as she understood them
same here, I even didn't mention those 2 in the e-mail as it clearly said to comment on the ratios that we had to calculate, not the others.And didn't risk losing marks by making a comment on them that proved to be incorrect....even if I was tempted at one point.0 -
what did people put in for the PPE IAS?
I think I mentioned the carrying and recoverable values, impairement and depreciation policy. Is that what they meant?
Of all the IAS to come up I think this was the worst!0 -
No I didnt do the NP or GP as it told you not too. Just tried to fill out comments so they could see I looked at previous year to compare.0
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same here, I even didn't mention those 2 in the e-mail as it clearly said to comment on the ratios that we had to calculate, not the others.And didn't risk losing marks by making a comment on them that proved to be incorrect....even if I was tempted at one point.
I didn't comment on the ratios I commented on the actual movement of net profit and revenue as a back up in my summary to reinforce the decision - i hope this doesn't lose marks??0 -
I didn't comment on the ratios I commented on the actual movement of net profit and revenue as a back up in my summary to reinforce the decision - i hope this doesn't lose marks??
Yer so did I. I said that the large refinance of 3,000,000 has clearly not been used effectively as profits have decreased from last year. There must be other companies with less risk and more return to invest in.
I also added that there was an additional issue of shares in the year which would make less of a return on her investment.0 -
ok section 1
every financial statement balanced straight away no problems
with ppe i said in first part non current assets first recognised at cost then after carried using either cost or revaluation model and described them and fair value. said if revaluation need a revaluation reserve and if loss on revaluation recognised in IS unless previously revalued upwards then offset against revaluation reserve. i said is revalued whole class must be revalued and said that ias 16 doesnt require any set/annual revaluations but requires them to be revalued so carried amount is in line with fair value. then said a bit about depreciation across useful life and if revaluaed its useful life and method inline with assets use
second part i saif its recognised when probable economic benefits and cost measured reliably
3rd part said cost includes purchase cost plus directly attributable cost in bringing asset to location and condition for use and gave few example like distribution, fitting costs and taxes
im happy with this question i think and one of the happier ias's that came up
happy with what i put for confidentiality bits too
so overall section 1 im very happy
section 2
reading your comments on report im a bit worried now though!
i didnt mention gross or net profit at all in report as one of the 3 points said she was happy and in line with industry average. gearing i used long term debt/capital employed x 100 got 47% or something so said not as highly geared as industry who appears to be a highly geared industry and said this could have been to do with share issue and said they are less risky than industry and in comparison to previous year (BUM BUM BUM! IS THIS MAJOR MAJOR BAD?)
interest cover i had 3.3 said this was something to consider and said almost half industry standards but still sufficient cover. said this could be do do with reduced revenue and increased expenses effecting profit from operations and also increased loans increasing interest payable. said was of some concern
current and acid test i said current ratio in line with industry and acid test a little lower than industry but looking at inventories this was probably the reason as was 62% of all current assets. i said stock control needed to be looked at as industry averages being slightly lower suggested that they held lower percentages of stock. i said a further ratio could be looked at inventories turnover and said that if inventories held were reduced that this would impact reduce cost of sales and improve profits from operations and so interest cover also. i said that there was evidence of expansion to do investment in ppe and that this could also be a reason for high stock levels and said bit about timing of purchase and how this may not be generating economic benefits as yet but when it did interest cover would increase as a result
then trade receivables and payables said that they were bit better than industry at collecting debts quicker good for cash flow and industry figures suggest that the industry tends to pay within credit terms. payables i said they were a bit quicker than paying than industry and possibly werent using full credit terms available and if they did this could help OD however they were receiving debts before paying debts so this was good working capital management
then i said that currently i would leave investment in business as they appeared less risky than other businesses in industry and compared to previous year due to gearing (BUM BUM AGAIN!! BIG PROBLEM??) then said although they were in an OD at end of year this didnt necessarily have to be negative as was investment in ppe and evidence of expansion and that when this did produce the economic benefits it would increase profits distributable to shareholders. also said that they were managing working capital fairly well currently
so how does the report thing work marking wise as im bit worried about this now using wrong gearing (we were told when it said gearing though it meant gearing and when it said debt equity it meant debt equity not a choice!) and saying not as risky when it was as from this i seem to have recommended wrong????
2.2 was happy with
left exam with 35mins to spare0 -
hmm, now Im not sure!
I got that gearing improved as the % was lower... calc was debt / equity+debt x 100. for some reason (lord knows why!) I put about research and development costs in tehe IAS for PPE, apparently thats intangible! lovely...i smell resit!0 -
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I also advised not to sell, I said they just invested in new PP&E and teh future benefits may not have come in yet...0
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the calculation should of been the alternative Debt/Equity x 100 thats how they worked out the 2008 figure they put downbagpuss3008 wrote: »hmm, now Im not sure!
I got that gearing improved as the % was lower... calc was debt / equity+debt x 100. for some reason (lord knows why!) I put about research and development costs in tehe IAS for PPE, apparently thats intangible! lovely...i smell resit!0 -
DFS today exam
So very interesting reading everyone's comments. I didnt think the paper was as bad as i was expecting. I recommended that she continued with the investment. It seems like most of you recommend to sell so a bit worried about that!
I left with an hour to spare but waffled about confidentiality
A waiting game now!0 -
Lisnic - i did almost identical to you - although i did not comment on IAS 16 as in depth as you (the less i write the less chance i have of exposing my lack of understanding)..
However i did recommend selling investment. I also did not mention Gross of Net profit ratios and concentrated on comparing results to industry averages rather than previous years... Feel like i have missed out lots from email that i could have put in .. but where does it end.. i wrote 4 pages!!
And as for 'Associates' ... all that time.. energy...brain cells!! wasted on revising them.. I feel cheated!!0 -
I reckon as long as you've justified what you've put either answer is right as some people are more risk adverse that others.
I know what you mean about associates, i was half hoping for them to come up!0 -
I also calculated the Gearing as Debt/Equity + Long-Term Liability thus getting the 47% and and improvement on the Industry Average.
The Acid Test I did using Current Assets-Inventories/Current Liabilities, is that wrong too then? My BPP book says these are both okay?
Also, because of the results of the ratios I said that before making a definate decision I would like to have compared the relative performance of the company over the 2 years and had more detail to further look at asset investment. So I recommended she kept her investment for the next year and then review it again at the end of the following year. Poo!
June resit, here we come!0 -
The Master wrote: »I had 88.65 gearing and 3.3 interset cover? anyone else?
I did the gearing calculation the other way and ended with 47%. But I had the same interest cover ratio. I advised to stay with caution and to have the higher inventory levels investigated. Hopefully as it supports my other calculations, I will be ok on this one.0 -
Dont know what the correct answer is ... seems to be an even split as to who advised what?? I did the same calculation for Acid Test... didnt think there was another way??0
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bagpuss3008 wrote: »hmm, now Im not sure!
I got that gearing improved as the % was lower... calc was debt / equity+debt x 100. for some reason (lord knows why!) I put about research and development costs in tehe IAS for PPE, apparently thats intangible! lovely...i smell resit!
This is a correct calculation of the gearing ratio (Debt / (Debt+Equity)) x1000 -
I also calculated the Gearing as Debt/Equity + Long-Term Liability thus getting the 47% and and improvement on the Industry Average.
The Acid Test I did using Current Assets-Inventories/Current Liabilities, is that wrong too then? My BPP book says these are both okay?
I used both those too, is there another formula for the acid test as well?0 -
Trade Payables days
How did everyone do this as there wansn't a specific "purchases" figure. I have spoken to a few people and they just took the cost of sales figure. i went round the houses and used the Inventories from 2008 and the inventories from 2009 and cost of sales figure to work out Purchases. Which way is correct? :-S little confused.0
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