FNST Exam V Soon

stephleedz

Hi,

A question to all those who have say this exam. Part 2 of the exam I am aware asks you to give the equations for X amount of ratios, then asks that you calculate the ratios and finally asks that you compare ratios from say 20X0 to 20X1. The main ratios we are asked to compare are:

Gross Profit
Operating profit
Gearing
Interest
Return on Equity

Have those who have sat this exam come across having to compare any other ratios? I am concerned of I am asked to compare any other ratios than the above because I wouldn't have a clue??

Does anyone have any reassuring words for me...given that I am aware questions in the actual exam can be different to what other students have encountered?

Thanks in advance guys and girls

Steph x

zhulme

hello

Same here, i have done this before and just studied what equations were given in the books/past exam papers and then asked to calculate extra equations when it came to the actual exam!

It seems as thought there is a large step up between all the other units and this one.

I found the others relatively easy with a lot of revision but this exam seems to be a complete minefield for everyone! hopefully i'll pass it in 4 weeks and then have a good rest!!!:laugh:

stephleedz

Zhulme,

Thank you for your reply. This will be the first time I sit the exam. Can you remember what other ratios you were asked to compare?

Thanks

Steph

zhulme

hello stephleedz

im afraid it was a different exam i sat that i did this in, cant remember which one now.. theyve all rolled into one now! im on the same page as you in thinking they may throw some extra bits that arent in the general revision guides.:001_smile:

I do hope not, as it seems hard enough as it is and the pass rate is pretty dire so ive heard although im not sure of the percentage, so i shall be swotting up big time for this one!

Morpheus1980

I would advise you to brush up on your liquidity ratios too...just in case they crop up.

NicF

I think I got the current ratio and/or the quick ratio and also one of the ones for the number of days, either inventory days, purchases days or supplier days. I took this exam back in February and also did credit management which also has ratios in it so I may be mixing up the two.

smithy44

The written bit in section 2 has not been related to the ratio's you calculate when i have sat the exam i have sat it twice still waiting on my result for the second time!!!

stephleedz

Smithy44,

Sorry can you explain what you mean?

I am aware that in section 2.1 we are required to give the formulaes of approx 8 ratios then asked to calculate them. Then in section 2.2 we are asked to 'comment on the relative performance of the company for the two years based on the ratios calculated and what this tells you about the company'. They will have already calculated the ratios and you just have to comment on them. It is this that concerns me a little because all the practice questions I have done on this part have asked that we comment on:

Gross Profit
Operating profit
Gearing
Interest
Return on Equity

I havent come across a question that asks that we comment on say acid test ratio or the trade receivable days ratio.

Jo Clark

You need to be able to do the following:

Explain how to calculate accounting ratios – profitability, liquidity, efficiency, financial position.
Explain the inter-relationships between ratios.
Explain the purpose of the interpretation of ratios.
Describe how the interpretation and analysis of accounting ratios is used in a business environment.


I would also like to refer you to the attached document and page 15 which details all the ratios which you could potentially be tested on. There is also guidance on which IFRS/IAS you could be tested on.

Jo Clark

Learning outcome 3:
Interpret financial statements using ratio analysis

Learners must be able to calculate and analyse and interpret accounting ratios with regard to profitability, liquidity, efficiency and financial position.

Furthermore, in order to assess a company’s performance and financial position in respect of an accounting period, learners must be able to compare the calculated ratios to:

i.) Ratios of a previous accounting period for the same company,
ii.) Ratios of another company and
iii.) Industry average ratios.

Learners must be able to draw valid conclusions from their calculations and analysis, and be able to present these clearly to appropriate parties.

Assessable ratios and their formulas are listed in the delivery guidance in section 4.2 (Page 15 of above document)

smithy44

Sorry I was very clear.

In the written section they give you two sets of ratio's already calculated and you have to comment on them, depending on what the questions asks you to do. It could be someone wanting to invest in the companies or someone who has already invested and wants to know how their investment is doing.