Countdown to Bus 4 Tuesday 20 January 2009
Today’s Objectives • Support • Reinforce • Identify gaps • How to approach exam
Outline • Session 1 – Content and the Case Study • Session 2 – Operations • Break • Session 3 – Finance • Session 4 – People • Lunch • Session 5 – Bus 4 Challenge • Session 6 – Marketing • Session 7 – Success in Bus 4
Q2. Give me TWO… Reasons why a firm might use a market led approach
Q3. This type of HRM sees employees as a resource like any other available to the business What is the approach? • Hard HRM • Soft HRM
Q4. True or False Arbitration is the attempt to settle an industrial dispute through the use of a neutral party
Q5. Average Rate of Return? • A) total return divided by expected lifetime of the investment, expressed as a % • B) the net return on an investment when all revenues and costs have been converted to their current worth. • C) the length of time it takes for an investment to pay for itself from the net returns of an investment
The Exam Paper • Based on unseen case study – 800/900 words – fictitious business – read it and use it! • Time allowed - 90 minutes • 4 main questions – worth 20 marks – often split. • Focus of each main question either: • Marketing • Accounting and finance • People • Operations management • Revise/use relevant AS theory too!
Getting into the case Size & scope Owners & Objectives Customers Competitors External Environment Resources
Over to you Read the case study on Park Leisure Highlight SOCCER points (3 mins)
Problems…problems… What are the main problems facing Park Leisure?
Park Leisure’s problems • Declining sales • Falling profits • Other?
Topics • Productive efficiency - Critical Path Analysis • Facilities – Location • Exam skills – Content, Application, Analysis and Evaluation
Bus 4 Specification - CPA Can you? • Draw simple networks, calculate Earliest Start Times, Latest Finish Times, identify the critical path and calculate total float? • Understand the implications of CPA for efficiency, business decision-making, time based management and working capital control?
Evaluate the usefulness of CPA for Park Leisure • Define the term, explain the purpose CONTENT A technique used to find the cheapest and fastest way to complete an operation.
Two sides Right of the screen Left of the screen Identify 2 problems to David of using Critical Path Analysis Give 2 benefits to David of using Critical Path Analysis
Building argument – 2 sides Useful because……… However…………………. Construction of CPA not enough to guarantee success, projects need to be managed properly Relies on estimates of expected duration Does not guarantee this is the right project for PLL Unforeseen circumstances • Provides a clear outline of the problem. • Encourages forward planning • Improve efficiency • Can identify critical activities which must be completed on time • Control mechanism, APPLICATION AND ANALYSIS
Evaluate – it depends on: • Can provide a valuable focal point for management system, particularly important for HH as this is a new venture and the diagram will provide clarity to all involved. • However a lot will depend on David’s ability to make sure that everything is implemented correctly and each activity is completed on time.
On the other hand Paul Robinson, Marketing Director outlines an alternative
Operations focus – Location, Option • Evaluate the key location factors that the Park Leisure Board of Directors should consider in choosing an appropriate site for the proposed time share development. (10 marks)
Location, Location List the key location factors the PLL Board should consider.
Time for a Quick Break!
Topics • Ratio Analysis • Investment Appraisal • Using the financial data to support answers on Bus 4
1. Which one of the following: Measures the ability of the business to settle its debts in the short term A B Current ratio Return on capital employed C D Net profit margin Stock turnover ratio
2. Which formula measures how efficiently assets are being used? A B Dividend yield Gearing ratio C D Asset turnover Net profit margin
3. The formula, sales over net assets is the ratio for? A B Stock Turnover Dividend per share C D Asset turnover Net profit margin
4. Write down the formula for.. RETURN ON CAPITAL EMPLOYED
Examiners tip You will need to know: • How to calculate the ratios • How to interpret the ratios, some exam questions give the results of the ratios as part of the information. • Be prepared to use the information to show application and analysis
Tricky topics – investment appraisal Content & application • Techniques for comparing the value and timings of different investment projects: • Payback – calculates the time period required for earnings to cover the original investment costs • Average Rate of Return (ARR) – calculates the % rate of return generated over a period of time • Net Present Value (NPV) – uses discounted cash flows to convert future earnings into present values
Investment appraisal Analysis – examples: • Interpreting the results of calculations • Advantages/disadvantages of using techniques Evaluation - examples: • Considering relative importance of financial and non-financial factors • Making judgements on the most suitable technique for a given scenario
Option C is now presented to the board Anne Robinson, Finance Director outlines Option C
Option c – Sale and re-invest • Sale of smaller parks to generate cash • Investment in larger parks
You are the Board… Discuss whether Park Leisure Ltd should sell its smaller parks in order to finance investment in the larger more profitable sites (12 marks)
The potential sale • Ann has identified 3 non core parks which together generate sales of £5.5 million and operating profit of £200,000. • The sale value including land is estimated to be £4 million