Ruby Dale - Synoptic Assessment
AATSM
Registered Posts: 16
Has anyone else got their level 4 synoptic assessment this week using Ruby Dale Ltd? Does anything in particular stand out to you on the pre-release material? I have written lots of notes around this but just wanted to see if I had missed anything! Also, how are you feeling about the exam? Good luck to anyone taking the exam this week!
Comments
Would you like me to send you some notes over regarding the pre-release? I have done a few bullet points below though (just the obvious stuff though)
Fashion Business
Fast-moving environment, heavily influenced on consumer disposable income and economic conditions
Economic uncertainty in the UK and Europe caused by political events. 42% of sales are generated by the UK (with its economic uncertainty, not good). The fast-growing business also leads to mistakes in the internal control system. May need to review/renew policies.
The company is committed to corporate and social responsibility, yet an opportunity of outsourcing products overseas was suggested by the FD (Joshua Edeki). The triple bottom line needs to be considered, adverse environmental impact, and maybe the quality of the product. The Directors are also shareholders, so maybe Joshua is thinking more about the profits of the company rather than the commitment to corporate social responsibilities. Maybe a bias SWOT analysis.
Rolling budget would probably be best for this company because of the fast-paced environment of fashion
The organisational chart for the employees has ample opportunity for segregation of duties within the accounting and internal control system. (Credit controller, accounts payable, accounts rec, general accs and cashier, payroll) - 5 subdepartments?
Another problem with the SWOT analysis (sorry I have done a lot on this haha) is the opportunity to float on the stock market. It will dilute the shareholding of Ruby Dale and Jack Carey, meaning loss of voting control. Increase pressure from investors to generate profit. Ruby's morals (of triple bottom line) may go out of the window.
I have worked out all of the ratios too, and the following is what i gathered
Profitability:
Gross Profit
Operating profit
ROCE
Profitable company, high GP but lower OP in comparison, due to high costs?
Liquidity
Current ratio
Quick ratio
Inv holding days
Receivable period
Payable period
Working capital cycle
Sufficient current assets to cover the current liabilities. Even when taking out the inventory, the liabilities are still covered. Current assets are mainly made up of inv and trade receivables. Maybe obsolete inv and credit control issues?
Payables are quite high if the standard is 30 days. Need to see what terms are offered. Maybe cash flow issues and maybe overtrading?
Working capital is long for this industry. both long inv time and payable time - can't use suppliers as a form of finance
Financial risk
Gearing
Interest cover
Lower financial risk. lots of opportunities to take out further long term borrowing as the gearing is low at present. May interest potential share investors. Banks would be happy to loan more out with the good finance cover.
I am not feeling great about this exam at all, after reading all the failed students comments on this forum haha. I am hoping that if I have a good understanding of all the information, no matter what question comes up, I shouldn't struggle. However, there is just so much to remember!!
When is your exam? And good luck to you too!
I feel ok for the exam at the moment but I wouldn’t want to feel over confident given it’s meant to be a tough one and there’s a lot to try and remember. I’ve heard the best advice given is to try and relate your answers back to the pre release material where possible and this will boost your marks!
What task are you most worried about?
Good luck again!
I think my problem is that the do not read into the material enough and i just answer the questions in the exam, and dont refer to the company. As I got 66% and 67%, i really feel very negative about this exam.