Analysis and evaluation of the business and financial performance of an organisation over a three year period.
“A key to a successful RAP is the improved knowledge on the various models used in evaluation of the financial and business performance (ratio analysis, SWOT, Porter Five Forces, PESTEL, etc.) and their application to selected organization for a specific period of time (i.e. the last three years) by considering all the micro and macro level factors under the guidance of a highly qualified mentor”
This topic is based on the analytical assessment of the business and financial performance of the selected organization over a period of three years.
“Analysis” is a careful study of something to learn about its parts, what they do, and how they are related to each other while “Evaluation” is the making of a judgment about the amount, number, or value of something.
While preparing the RAP on this topic, the student needs to conduct financial and business analysis of the selected organization. The financial analysis is the process of understanding the risk and profitability of an organization by analyzing the reported financial information through different accounting tools and techniques. The business analysis is a practice of permitting a change in the organizational context, by defining the needs and recommending solutions that enable the delivery of value to the shareholders.
The topic number 8 is the most popular topic for the students because they can easily apply the models and all the learnt knowledge during the studying ACCA. Furthermore, to prepare for this topic, the students do not need to use primary sources of information (as the access to primary sources of information is very difficult for the majority of students), and the entire project can be completed by using reliable secondary sources of information. According to the OBU prescribed guidelines, the use of a primary source of information is not vital for topic 8.
Below are some key points that the student needs to have in mind while preparing for their RAP:
- According to the OBU prescribed requirements, the students who want to work on topic 8 or topic 15 need to select an organization in these three sectors: Mining, Health Care Providers and Electronic & Electrical Equipment. Below are the definitions of these sectors:
1. Coal Companies engaged in the exploration for or mining of coal.
2. Diamonds & Gemstones Companies engaged in the exploration for and production of diamonds and other gemstones.
3. General Mining Companies engaged in the exploration, extraction or refining of minerals not defined elsewhere within the Mining sector.
4. Gold Mining Prospectors for and extractors or refiners of gold-bearing ores.
Health Care Providers: Owners and operators of health maintenance organizations, hospitals, clinics, dentists, opticians, nursing homes, rehabilitation and retirement centres. Excludes veterinary services, which are classified under Specialized Consumer Services.
Electronic & Electrical Equipment:
1. Electrical Components & Equipment Makers and distributors of electrical parts for finished products, such as printed circuit boards for radios, televisions and other consumer electronics. Includes makers of cables, wires, ceramics, transistors, electric adapters and security cameras.
2. Electronic Equipment Manufacturers and distributors of electronic products used in different industries. Includes makers of lasers, smart cards, bar scanners, fingerprinting equipment and other electronic factory equipment.
- The students should select an organization for which they have sufficient information and be aware of the different parameters of the sector in which the selected organization is involved. Without proper knowledge on the sector and organization at the beginning of the project, the analysis and evaluation may not be focused on the correct aspects, meaning that the RAP may be focused on unimportant matters. The basic understanding of the overall operations of the selected organization and its associated sector is essential in getting good grades for a RAP prepared under topic 8.
- Logical discussion and proper interlink on all the ratio analysis along with providing internal and external factors and micro and macro level factors.
- When discussing a certain trend of a ratio, the student needs to consider and discuss the various internal and external factors alongside the micro and macro level factors that in turn impact on the movement of the specific ratios in the given time frame. The internal reasons for the movement of the different ratios of the selected organization are usually in the annual reports (reports to shareholders section, key achievement sections, financial performance section, chairman/MD review section, etc.) of the company along with online articles and in newspapers related to the selected organization. On the other hand, the external reasons for movement of the different ratios of the selected organization are from the sector reports (in which your selected organization operates) over the online sources (especially websites related to business activity or the economy of a certain country) and articles related to the associated sectors over the online journals, magazines, etc.
- The parallel discussion of the performance of the competition in relation to your selected organization rather than at the end of each ratio as a continuous discussion of the both selected and competition company will enable the reader of your report to effectively analyze the scale of your work.
- Keep a good balance with the information gathered from various sources (annual reports, newspapers, online sources, books, etc) so that the marker can clearly see that you have been very resourceful in your research as this is an essential factor in passing your RAP with good grades. Another important factor is the proper presentation of the gathered information in an effective manner.
- You will have to utilize one or maybe two business models you can describe each important aspect of the selected model in an effective manner, but also have in mind the overall prescribed word count in part 3 of the RAP (i.e. 4,500 words).
- Provide proper graphs so the reader of your RAP can easily understand the company’s performance without the need to read the text of the RAP. This is an aspect called IT skills and this is very important in order to pass the RAP under topic 8 with good grades.
- There are, of course, many other factors in successful passing of the RAP under topic 8 with good grades and student engage highly qualified mentor for the preparation of RAP to get regular and appropriate advice on the various technical aspects of the topic that will, in turn, enable him/herto get good grades.
Key features / requirements
- An analytical assessment of the financial performance of the selected organization in the specific period (last three years);
- An analytical assessment of the business performance of the selected organization in the specific period (last three years);
- Appropriate discussion of the financial and business performance of the selected organization through the examination of the internal and external factors along with the micro and macro level factors; and
- Providing a proper conclusion based on the performed research and analysis by keeping all the important aspects in consideration.
Key Success Factors
- Fair knowledge on the broader categories of all the ratios;
- Excellent knowledge and proper application of the selected accounting and business models;
- Proper interlink between the important aspects of the selected accounting and business models through the provision of practical examples;
- Continuous comparison of the selected organization with its competition throughout the whole discussion in the RAP;
- Correct application of the proposed goals and objectives (that were set at the beginning or the RAP) in the appropriate sections of the RAP;
- Correct answers to all the research questions (that were set at the beginning of the RAP) in the appropriate sections of the RAP;
- Implementing the proper research methodology to get good results on all the proposed goals and objectives (that were set at the beginning or the RAP); and
- Ensure proper flow of information during the discussion by keeping up all the requirements of the topic.
- Give a logical conclusion of the whole work process at the end of the Research Report by having all the requirements of the topic in consideration.
Major benefits for choosing this topic
- The student can implement the knowledge of this topic in practical, real life conditions;
- The student will get familiar with the proper application of the various accounting and business models; and
- The various techniques learned by this topic will undoubtedly help the student in their professional life.
Possible limitations faced by the student under this topic
- The student may be ignored by the management of the selected organization, and not be provided with the necessary information due to different factors like confidentiality issue, unavailability of authorized personnel etc. Overall, this topic can easily complete without using primary sources of information;
- The student can face lack of quality information on this topic and may lack ideas for improving the progress of the project (due to improper research approach); and
- The student may face confusion by the gathered research material (verbal or documented) that is provided by primary sources with the material derived from other research done according to the requirements of this topic.
Suitable organisation under this topic
The most suitable organization where the student can properly undertake this topic is the one where the student has appropriate access to secondary sources of information. The selection of the proper organization is essential as the student needs to have a better understanding of the sector of operation of the selected organization. Upon the knowledge of the selected organization and its sector of operation, the student can interconnect the different aspects of the general operation of the selected organization with the prescribed requirements of this topic that will, in turn, help them obtain good grades on their RAP.
The student needs to address the following aspects during the selection of proper organization for their RAP.
- The OBU prescribed requirements in choosing an organization in these sectors: Mining, Health Care Providers and Electronic & Electrical Equipment;
- The student’s interest in relation to the general business of the organization;
- Access to information from reliable secondary sources (primary sources are not significant in topic 8);
- Comprehension of the general operations of the organization;
- Comprehension of the associated sector of the selected organization; and
- The basic understanding of the requirements of the selected topic and the proper application in the proposed organization at the beginning of the preparation of the RAP.
Suggested approach for this topic
If the student chooses this topic, a proper plan must be set from the beginning so the student can conduct all the necessary tasks in a proper manner. The student needs to have an in-depth understanding of the major requirements of this topic and needs to analytically evaluate the obligatory required aspect by establishing a detailed strategy of operation. The student needs to assess the processes of action that they will follow in order to meet all the necessary requirements, this is possible by a thorough planning in the beginning of the RAP.
The student needs to prepare the overall contents of their RAP under topic 8 so that they flow in a logical sense, and cover all the tasks that the student needs to adhere to. The prepared contents will enable the student to stay on the proper track from the beginning of the project, and also the student can estimate the time factors of planned versus actual time necessary for completing the various tasks required for the proper completion of the RAP.
After finalizing the overall content for the RAP under topic 8, the student needs to start gathering the proper information per the requirements of the topic. The student needs to evaluate all the gathered information in an analytical manner through consultation with their Project Mentor. The feedback from the Project Mentor on the key areas of the RAP is essential in the proper completion of the RAP, so the student needs to regularly share their thoughts with their Mentor in order to get the proper guidance in a timely manner.
To sum up, there is no 100% guaranteed approach for topic 8. There is the broad level approach described above, but the detailed approach under topic 8 varies greatly on the students’ perception of the requirements of the topic along with the available information on the selected organization. Whichever approach you choose to follow, you need to keep getting guidance from your Project Mentor at every step of the way so you will meet all the prescribed information of this topic and get good grades on your RAP.
Availability of Information
The student needs to complete their RAP based on the information provided straight from the management of the selected organization (the primary sources of information) along with various other relevant secondary sources of information (online sources, newspapers, journals, books, etc). For topic 8, the availability of primary sources of information is not essential, as this topic can be completed without getting direct information from the selected organization. The student needs to be sure that he has access to enough information on the selected organization from reliable secondary sources, and will not be facing major issues in obtaining this information.
The student needs to carefully consider selecting this topic for their RAP, as all the requirements of this topic are only met if the student has access to enough relevant information on the selected organization. If there are any issues in providing the required information during the preparatory stage of the RAP, the student should consider choosing a different topic, as the improper information can lead to low-quality RAP and low grades or even failure of the RAP.
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