Interpretations
System
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Is anyone finding it difficult to think of what to say and how to word it?
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Re:Interpretations
In what respect?0 -
Re:Interpretations
I can sort of remember the ratio calculations and what each one means. But in some aspects I think I am possibly thinking too deeply into what I am required to write.
At the moment we have been given a basically stating an increase in gross profit mean profitability has improved etc etc... IS that basically what we are required to do cause 50 minutes seems a little excessive to comment on that or do you have to give possible reasons. We have been given a couple of interpretations to do for next week with not really much guidence on doing it. I am following the example in the text book at present was realy just wondering if anyone had an hints and tips.0 -
Re:Interpretations
The most common form of discursive type question would in the form of a report to a third party analysing financial information. A typical scenario would be an individual thinking of investing in one of two companies - you would have to calculate various ratios and comment on them accordingly. The aim here is to prove your thinking goes beyond rote learning. Various ratio calculations are easy to learn - but it is the interpretation of what you have calculated that is the key.
Try to put yourself in the shoes of a non-financially orientated individual who, say, has inherited a fortune and wants to invest in one of two companies. What would you expect in the form of a report on the profitability/liquidity of the two companies? If you were to present a gearing ratio to the individual would s/he understand what you were talking about - possibly not. The trick is to try and put the interpretation into understandable English. The best bet would be to look at some past papers and see how they word them.
Regards
Steve0 -
Re:Interpretations
Thanks Steve,
That helps a little better in understanding what I am expected to do.0