Question Structure Flashcards
How might I structure a question that relates to cash flows?
Supply/ demand - we know there is ample demand
Significant cash outflows or resale?
Sales volume - in Flatthall’s case this is number of rooms.
Sales price - market driven but subject to quality
Cost management - utilise economies of scale, Energy performance, hedging techniques etc
How might I structure a question in relation to negotiation?
Planning stage - hugely important
Opening
Bargaining
What bargaining power to we have ?
Close
2 key words in the exam for question answer ?
Look for AND
Add to my answers the word BECAUSE
How should I structure a question in relation to investment appraisal ?
Are there any funding constraints ?
Does it support the objectives of the company? ie listed company creating value
Details of variables provided ? Npv irr payback arr etc
Non financial factors
Profitability index
Sensitivity analysis & scenario planning / stress testing
Structuring of team engagement?
Stress the importance of operating as a team
Why is this important
How will the team performance be measured ? Emphasis on pulling together
Could we implement Team building activities or away day to gain mutual respect ?
Leadership style & conflict ?
Is there any history of the employees leadership style ?
How does this fit with the culture ?
Should the employee be briefed on adapting his/her leadership style?
(Authoritative) Telling, selling, asking, joining
Could there be a benefit to management training ?
Has this disrupted career progression?
Can we look into backgrounds, CVs, HR files to understand more ?
Resolving conflicts?
What’s the current environment of the conflict?
Conflict reduction via areas of compromise ?
Find issues and work together to improve them in order to build relationships
Offer reassurance
Put the company and team objectives first
How can I more effectively build a discussion/ argument?
Layer the answer by firstly setting the scene
Considering a range of scenarios
Build these up to the answer
Thoughts in the exam
What things need to be considered and why do they need to be considered before we reach the conclusion of the answer? Nuggets should be available here from the unseen
Build answer by including what we shouldn’t do and why!
2 pages per 45 min question
500 words ?
25/marks per section
Key answer structure
Define, discuss, apply answer with example, because/ why ?
Question structure for issue with NPV?
Investment value
Do we know this? Is there room for negotiation?
Are there upgrades required ?
Use sensitivity analysis to determine price
Cash inflows /
Revenue model? Forecasts ? Growth
Cash outflows
Cost model ? Risks ? Inflation ?
Discount rate ?
Structure of a question on cost transformation?
Align products with profit
Understanding cost drivers
Manage risks related to costs / inflation (risks associated with cost reduction)
Cost conscious culture
Sustainability
ABC ABM
Transfer price ?
Explain viewpoints from both sides of the transaction.
Offer range solutions.. ie somewhere between the marginal cost and market price
Dual transfer ? Maintain discretion
How to structure the stages of investment decision making?
Initiation phase
Identify the objective
Seek out all investment opportunities
Identify ‘states of nature’ both controllable and non controllable
Decision phase
List possible outcomes (risk vs return)
Evaluate capital budget
Sensitivity/ deep analysis
Rank investments and choose the most appropriate that aligns with the objective
Implementation phase
Obtain authorisation
Keep review of capital investment decisions
Add actuals to forecasted variables
