Resit Cards Flashcards
What is the four stages of the gartner data analytics maturity model?
Descriptive
Diagnostic
Predictive
Prescreptive
What is the descriptive stage of the gartner data analytics maturity model?
What happened?
What is the diagnostic stage of the gartner data analytics maturity model?
Why it happened?
What is the predictive stage of the gartner data analytics maturity model?
What is going to happen?
What is the prescriptive stage of the gartner data analytics maturity model?
How can we make it happen/ prevent it happening?
What can financial statements be used to analyse?
Performance
Position
Adaptability
Prospects
What are the limitations of financial reporting information and data?
Only provide historic data
Only provide financial information
Filed at least 3 months after reporting date reducing its relevance
Limited information to be able to identify trends over time
Lack of detailed information
Historic cost accounting does not take into account inflation
What are the difficulties in drawing comparisons between different entities?
Comparisons affected by changes in entity business
Different accounting policies between different entities
Different accounting practice between different entities
Different entities within the same industry may have different activities
Different entities may not be comparable in terms of size
Why may users apply the gartner data analytics maturity model?
to create focussed decision-making and improve the conclusions from their financial statement analysis
What actions may be taken following financial statement analysis?
Pursuing the acquisition of a particular target company
Deciding whether to continue to provide finance to credit customer
Searching for alternative suppliers if it is considered that a supplier may go bust
Deciding what strategic approach the business should take
Decisions regarding selling or retaining current investment in shares
Agreeing to provide new financing or to withdraw existing finance from borrowers
What are some methods employed by creative accountants?
Altering the timing of transactions
Artificial smoothing - involves exploitation of the elements of choice that exist in accounting regulation
Classification
Exclusions of liabilities - under reporting liabilities in the SFP
Recognition of revenue - e.g recognising revenue from sales that are made conditionally
Managing market expectations
Tax avoidance
Increasing shareholder confidence
What can indicate overtrading?
High profits and low cash generation
Large increases in inventory, receivables and payables
What would reduce ROCE?
Taken out additional finance
Issued debentures
What would cause GPM% to change?
Change in sales price
Change in COS
Change in sales mix
Efficiency in production
Change in accounting policy e.g FIFO to LIFO
What would decrease ROCE?
Issue of shares
