P5: PROGRESS TEST 3
Progress Test 3 Section A numerical questions (2 questions approximate time 35 minutes) 1
Fitzgerald and Moon's building blocks set up six dimensions of performance (a) (b) (c) (d) (e) (f)
Competitiveness Financial performance Quality Flexibility Resource utilisation Innovation
Using the data below, identify and calculate suitable measures of performance for these six dimensions for Q Ltd, an 'over the telephone' car insurance company. Number of staff Peak times Off peak Telephone calls received (per hr) Peak times Off peak Insurance policies sold: Fully comprehensive Third party Holiday rental Average price per policy ($) Insurance market size ($m) Complaints Opening hours per day Peak Off peak
Budget
Actual
12 8
14 6
27 13
28 14
60,000 30,000 10,000 100,000
70,000 25,000 15,000 110,000
150 25 5,000 10 6
130 27.3 7,500 10 8
Assume 360 working days per year. (12 marks)
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P5: PROGRESS TEST 3
2
R plc is a quoted company with 5 million ordinary shares with a current value of 90c each, down some 20% from last year's level. Extracts of the results for the last financial year are as follows: $'000 4,375 175
Income statement Revenue Earnings before interest and tax Statement of financial position Non-current assets Current assets Inventories Trade receivables Cash and cash equivalents
$'000 200 160 40
Equity and liabilities Share capital (5 million ordinary shares of $1 each) Retained earnings Non-current liabilities Bank loan due 2015 Current liabilities Trade payables Calculate the Z-score for R plc and thus predict whether R plc is likely to fail.
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$'000 9,800
400 10,200 5,000 3,100 1,800 300 10,200 (6 marks)
P5: PROGRESS TEST 3
Section B discursive questions (10 questions approximate time 25 minutes) (1 mark)
1
What is a not-for-profit organisation?
2
Identify two potential criticisms of public sector league tables.
3
What are the three management styles identified by Hopwood?
(1 mark)
4
What are the four perspectives considered as part of the balanced scorecard?
(1 mark)
5
Explain briefly why it is important to monitor non-financial performance indicators as well as financial performance indicators. (2 marks)
6
Brands are considered to be an important way for companies to convey information about their products and services to customers. Suggest four ways to assess the strength of a brand. (2 marks)
7
What is a target cost?
8
The costs associated with quality management can be classified into four types. What are they? (2 marks)
9
What are the three characteristics that Fitzgerald and Moon (in the Building Block model) suggest that effective targets should have? (1 mark)
10
Argentis A score model suggests that business failure follows a predictable pattern. What are the three groups of indicators which Argenti identified in the A score model? (1 mark)
(2 marks)
(1 mark)
END OF PROGRESS TEST
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