Ratios DFS vs PEV

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
I did DFS in June this year and ratio analysis was a large part of the syllabus. I've just started doing PEV and have noticed that one chapter of the Osbourne books is devoted to ratios and that it crops up in past exam questions.<BR><BR>Are the ratios and the analysis required of them the same for both ? (don't want to spend too much time on it if its just regurgating stuff I already know 0 need to time to learn variances !)<BR><BR>But it if is the same, why do AAT bother to examine it twice, in two different subjects, both of which are compulsory ?? Just curious...........

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Ratios DFS vs PEV

    Ratio Analysis in a subject such as DFS will crop up in a numerical format (i.e. calculating ratios) and a discussion format. See June 2005 DFS - you had to calculate various ratios and comment on them in order to portray your understanding of what you are calculating. This was assessed to guage your understanding of the financial aspects of ratio analysis in two companies with varying degrees of financial performance. Ratio analysis will overlap into financial and management papers because ratios, by their very nature, can indicate core variances. For example, in a financial exam such as DFS the Gearing ratio of two company's can be assessed with a view to possibly purchasing the company with the lowest ratio. From a management perspective, especially in a manufacturing organisation, ratios are an integral part of the internal decision making process which a budgeting/costing paper is all about. The ratios, however, are calculated more or less the same way in PEV as in DFS - there may be slightly different approaches to say return on equity which could be termed return on shareholders funds/return on capital employed etc etc. but the calculations are invariably the same.<BR><BR>Hope that helps. The AAT aren't trying to examine things twice - it just happens that sometimes financial and management aspects of accountancy can fall in to different papers. <BR><BR>Regards<BR>Steve

Categories

Privacy Policy