Royal Holloway. University of London

Transcription

1 Royal Holloway University of London BSc Business Administration Accounting for Management BBA 1020 May 2015 Examiner s Report Statistical Overview : Scripts marked to date : 236 students sat the exam of which 174 passed, 62 failed. This represents a pass rate of 74 % (fails 26 %). Of those who sat the exam, the spread of grades was as follows: Grade Number of student s % A (above 70 %) % B (60 69 %) % C (50 59 %) % D (40 49 %) % Fail (less than 40 %) % (as above) Totals %

2 General comments per question Question 1 Profit and Loss Account (Income Statement) and the Balance Sheet (Position Statement) This question was attempted by 193 students, representing 82 % of the students who This was the 2 nd most popular question. This question was attempted by more students compared to previous years but even though it was generally tried by the majority, the question still represents a popular question amongst students. Fewer numbers of students managed to get the correct figures for both financial statements compared to previous years. Accounting concepts however adequately covered. On the whole, those who attempted the question did generally well with a small percentage achieving average or minimal marks. Of those students that achieved average or minimal marks this was based on the following observations : 1) The interim dividend was added to the final declared dividend in the profit and loss account and not used as a figure to calculate what is left owing for the year in the current liabilities. 2) Calculation of depreciation missing. Many students this time around did correctly calculate the provision for doubtful debtors in the profit and loss account. Some students did add the investment income after net profit rather than after gross profit, however was accepted. Students were still using the old layout of the balance sheet rather than the new layout but still very acceptable. Accounting concepts this time adequately defined and explained.

3 Question 2 Statement of Cashflows (IAS 7) This question was attempted by 129 students, representing 55 % of the students who This was the 4 th most popular question. For those that attempted this question, the students did quite poorly, especially regards the calculation of the actual cashflow statement. First the students did not recognise that they were dealing with the accounts of a sole trader and thus assumed it to be a limited company. To derive the net profit they took the difference between the two years, whereas they should have taken the last years reported profit (2015) and not the difference. All other adjustments for working capital correct. Drawings once again the difference was taken as students should have used the last years reported drawings figure. Few students included the cash / bank reconciliation. The question which asked about the difference between the direct and indirect approach was extremely weak. Difference between cash and profit adequately examined but could have been a lot stronger. Students were assuming that a limited company s set of accounts would have been provided i.e which in the past has included tax and dividends. Students made the assumption based on previous year s exam questions and as such were expecting a similar approach.

4 Question 3 Ratio Analysis and Interpretation This question was attempted by 195 students, representing 83 % of the students who The most popular question in the exam (1 st ). Most students managed to calculate the correct ratios and make some sort of reasonable comments. The last part of the question did ask students to briefly examine the disadvantages of the use of accounting ratios as a means of business performance analysis. Though many did answer this question adequately, a large number did not read the question thoroughly and went onto discuss the advantages as well. Students did use the correct net profit figure for generating the net profit margin ratio i.e they used the operating profit (net profit before deductions of interest and tax). Comments were generally quite good indeed. Question 4 Break Even Analysis This question was attempted by 102 students, representing 43 % of the students who This question was the least popular question (6 th ). This question was done either extremely well or either extremely poorly. Those who attempted the question and derived the profit for the different options perhaps did so the long way around. Rather than do units beyond break even x cpu most students basically derived a small marginal cost statement to derive the profit. So though they managed to get the correct profit figure they did do it the long way around. Limitations of breakeven adequately answered but could have been a bit stronger response.

5 A fairly straight forward question and given that the tutor had given additional notes / learning material on the subject via the VLE, the question was not attempted by as many as expected. Question 5 Limiting Factors (Scare Resources) This question was attempted by 105 students, representing 44 % of the students who This question was the 5 th popular question. Very few students achieved the correct maximum contribution figure. Others that did attempt the question did it on a haphazard basis i.e they really did not know how to approach the question. Firstly they were calculating the wrong contribution figure and thus from then on all other figures incorrect. However benefit was given for calculating the correct labour hours needed per unit and materials needed per unit in kgs. When asked about the non-financial factors that would affect the decision maker some students made positive comments yet some students did not make any reasonable statements, so a mixture of very good answers here and very poor answers. Students seemed unaware that this type of question would come up and perhaps did not revise the topic matter. Some students assumed that this was a budgeting question (based on previous year s question 5) and thus went onto answer in the same manner as budgeting.

6 Question 6 Investment Appraisal This question was attempted by 153 students, representing 65 % of the students who The 3 rd most popular question. Those who attempted this question managed to calculate the correct payback period. A handful / minority of students managed the correct calculation of the accounting rate of return (ARR). ARR was poorly attempted. Very few achieved full marks. There appeared to be a haphazard attempt at this section of the question, even though extra advice had been given on how to attempt this type of question prior on the VLE notice board. Theoretical question on the time value of money answered adequately yet the cost of capital answers were a little brief and poor. Students kept referring back to the time value of money as a means to explain the cost of capital. OTHER GENERAL OBERSTAIONS Other statistical observations : Yearly pass rates : 78 % (2011), 77 % (2012), 72 % (2013), 77 % (2014), and 74 % (2015) 5 year average rolling pass rate fluctuating at a stable 75.6 % Looking at a comparative analysis of grades between 2014 and 2015 : % +/- A 42 % 21 % - 21 % B 11 % 17 % + 6 % C 14 % 19 % + 5 % D 10 % 17 % + 7 % Pass 77 % 74 % - 3 % Fail 23 % 26 % + 3 % Top range of the grades at A has decreased but an overall shift in the middle grades can be seen, B through to D grades increasing.

7 Examiner s Final Overview This exam paper proved that students have a tendency to look too deeply into the last one or two years exam papers as a means to find out what will be questioned and what to revise. Comments made on the VLE re-inforce the above comments i.e question 2 (cashflow statement) the students were expecting a limited company set of accounts and question 5 a budgeting question. The exam however generally went well. On the whole this exam more than challenged the students on a variety of topics. This exam will hopefully indicate to students that they cannot expect a fixed pattern of questions every year and that students must revise more than just a few topics. Sucha Sandhu, Mr