From mocks Flashcards
Review reasons for movements per mocks completed
Revenue share for top 10 writers increased, which could indicate too much…?
Revenue share for top 10 writers increased, which could indicate too much dependence/higher not necessarily better
CoS increased at a higher rate than revenue, showing…?
CoS increased at a higher rate than revenue, showing poor direct cost control
Poor performance- for example- in mechanical sales.
What should you recommend?
Further investigation of reasons for poor performances/remedial measures.
Recommendation for R1 section: calculate GP and GP% by ____ and by ____ to allow deeper analysis
Recommendation for R1 section: calculate GP and GP% by source and by territory to allow deeper analysis
When asked to perform a catalogue valuation, it (appears always) sensible to perform a ____ ______
When asked to perform a catalogue valuation, it (appears always) sensible to perform a sensitivity analysis
If a competitor approaches Jubal with an offer to sell them a catalogue, this puts Jubal in a _______ bargaining position
If a competitor approaches Jubal with an offer to sell them a catalogue, this puts Jubal in a stronger bargaining position
A lack of payment terms/timing in a catalogue sale contact is a setback for Jubal, since…?
A lack of payment terms/timing in a catalogue sale contact is a setback for Jubal, since Jubal needs to be able to evaluate cashflow impact
Jubal normally looks ___ years into the future as an appropriate horizon for catalogue valuations
Jubal normally looks 7 years into the future as an appropriate horizon for catalogue valuations
In drawing conclusions for a catalogue valuation, it is important to note that that valuation is only a _______ point, and the____ figure will emerge from ___________
In drawing conclusions for a catalogue valuation, it is important to note that that valuation is only a starting point, and the final figure will emerge from negotiation
An issue with the income method of valuation is that it’s difficult to ______ so many years into the future.
An issue with the income method of valuation is that it’s difficult to extrapolate so many years into the future.
In evaluating assumptions of a catalogue sale, it is pertinent to raise the issue of _____ ______ which may have been omitted.
In evaluating assumptions of a catalogue sale, it is pertinent to raise the issue of other costs which may have been omitted.
Income multiples should be ________ confirmed, and ideally not used based on press articles
Income multiples should be independently confirmed, and ideally not used based on press articles
In making an offer for a catalogue, it is important to:
Do further _______ _____ to back up predicted figures
In making an offer for a catalogue, it is important to:
Do further market research to back up predicted figures
In making an offer for a catalogue, it is important to:
Perform ____ ______ on both the catalogued artist and seller
In making an offer for a catalogue, it is important to:
Perform due diligence on both the catalogued artist and seller
In making an offer for a catalogue, it is important to:
Obtain _____ advice on contract terms
In making an offer for a catalogue, it is important to:
Obtain legal advice on contract terms
In making an offer for a catalogue, it is important to:
Perform a ______ model on the different variables included
In making an offer for a catalogue, it is important to:
Perform a cashflow model on the different variables included
If royalties fall at a lower rate than revenue, this could indicate that…?
If royalties fall at a lower rate than revenue, this could indicate that writers are negotiating higher rates.
Major A&R investment should result in increased _______ revenue.
Major A&R investment should result in increased sync revenue.
GP% has been relatively _____ in the years to 2023
GP% has been relatively constant in the years to 2023
Industry growth to 2023 is relatively steady (Ex2/Ex15), driven by ________
Industry growth to 2023 is relatively steady (Ex2/Ex15), driven by streaming.
The ______ industry is not growing.
The physical industry is not growing.
Jubal is operating in a _______ market (Ex2)
Jubal is operating in a competitive market.
Jubal’s 2023 revenue was the “______ annual growth for many years” (Ex4)
Jubal’s 2023 revenue was the “highest annual growth for many years” (Ex4)
Valuations are prepared in expectation of _______
Valuations are prepared in expectation of negotiation
Selling of a catalogue recommendations:
1) Seek further ____ about forecasts.
2) Evaluate artist in context of _____ _____ catalogue sales.
3) Investigate demand for the artist.
4) Manage ______ with artist appropriately
Selling of a catalogue recommendations:
1) Seek further information about forecasts.
2) Evaluate artist in context of other potential catalogue sales.
3) Investigate demand for the artist.
4) Manage relationship with artist appropriately
Sale of a catalogue can free up funds and ____
Sale of a catalogue can free up funds and time
Jubal needs to ‘keep up to date with all the _____ trends”
Jubal needs to ‘keep up to date with all the latest trends”
The music industry is ‘heavily influenced by _______’ (Ex9)
The music industry is ‘heavily influenced by technology’ (Ex9)
How is average running cost per song calculated?
Total cost of sales plus admin expenses, less depreciation, less amortisation and impairment. Divide this figure by number of songs.
The minimum EBITDA acceptable margin is ____%
The minimum EBITDA acceptable margin is 25%
When mentioning the 3% industry revenue growth anticipated (from p.9), what should you also include from p.17?
Jubal PY revenue growth of 28.8%
P.9 of AI, useful for generally identifying business issues and wider context:
1) Industry has recovered from _______.
2) _____ is popular.
3) There is a threat of _______.
P.9 of AI, useful for generally identifying business issues and wider context:
1) Industry has recovered from decline.
2) Streaming is popular.
3) There is a threat of competition.
For evaluating KPIs in R1 (R1.SPS.3), it is important to write what 3 things per point?
1) Changes from prior year to current year.
2) Compare this to target and include adjective for difference.
3) Include risks/end of year impact.
Explain how year-end accounting entries works for revenue.
1) Jubal initially records estimates as it does not have finalised information AND no cash changes hands.
2) Accrued income is debited and accrued royalties payable is credited, as cannot have a cash entry.
3) Update needed when final information received AND this sets up right balances ready for cash receipt.
New writers acquired in the year tends to be correlated with what cost?
Higher A&R costs.
Even though Yongo can be used as a comparative for valuation purposes…?
Even though Yongo can be used as a comparative for valuation purposes, it may not be appropriate as they are a different artist in a different period.
Potential issue with large, rounded numbers in estimated costs for a contract?
Round sum estimates may lack validity (rougher estimate)
Risk register adjustment:
1) Including more risks could make the Risk register more _______
2) What is a perk of removing all risks and starting again?
3) What in the advanced information makes the inclusion of the risk of AI a possible strong suggestion?
4) What would be the perk of making management accounts compliant with IFRS for loan purposes?
Risk register adjustment:
1) Including more risks could make the Risk register more comprehensive.
2) Ensures the register is fully up to date.
3) The letter to the board.
4) Gives greater comfort to bank.
How often is the risk register reviewed by the board?
Twice a year
Advances can be a ____ risk for Jubal (p.8)
Advances can be a major risk for Jubal (p.8)
