Recommendations for Requirement 1

An area you can get ahead of most students

We expect all our students to be able to generate strong recommendations for all scenarios set by the examiner.

Students tend to do better with conclusions over recommendations, but even still a significant number of students perform poorly on both.

Details on what constitutes a good conclusion can be found in our Steps To Pass In Case course

Recommendations

You should be building your recommendations around the following core themes:

- Continue doing the things you are doing well

- Improve in order to put right the things that aren't going so well

- More information or investigation is required to help analyse the business

- Future events - Be wary of future important events and consider how to mitigate their impact.

One of the largest criticism markers have with recommendations is that they are often vague, too generic or lacks commercial substance. Whilst the wording in our recommendations is longer, it is less vague and we believe more likely to achieve the points. For instance, we often see wording such as "Improve average revenue per customer" which does not say why or how this can be done and would come under the pre-prepared / vague and adding no additional value.

Recommendation

When to use it

Review cost allocations between product types to understand profitability better

Most situations as management accounts do not have this level of detail. We have anecdotal knowledge only.

Continue to attract Bespoke Clients due to its higher GP margin

Pick out the games which have declined and bring them into this conclusion.

Review sole supplier arrangement with Eaton and consider diversification

Use if material prices are increasing

Consider bonus scheme rules and criteria for rewarding staff

If bonus missed or if any issue linked to the bonus then always use

Consider future of PP including inhouse manufacturing

We think you can always use this as it is likely to be loss making

Consider selling to a Buying Group

ONLY if WWL are not selling to a buying group in 2022 and especially if retail has decreased

Review prices and consider if these can be increased to offset any cost increases due to high inflation levels

Especially if GP margins are lower and reason is down to increasing in costs rather than changes in sales mix towards commercial

Review reasons for worsening working capital position and introduce better policies for controlling inventories / receivables.

Inventories if days have increased OR there is evidence of slow moving stock

 

Debtor days if there is evidence of a worsening of the days as these

Consider delivery costs and assess whether performance of Mistral offsets prices increases

Only if Mistral costs have increased

Review dividend policy following the decrease in OP / CASH

Only if dividends are a LARGE % of OP or if there is a Net Cash Outflow

EXAM SPECIFIC:

  • Watch for poor performance in a particular stream
  • Bring in recommendations to investigate or ensure the issue in the Twist doesn’t occur again

 


Final Comments

There are way too many conclusions and recommendations in our list for you to use in the real exam! What you have to do is consider what you believe to be the most important and discuss these. 

For instance, if you owned the business, what are the areas you would be most concerned about and therefore which recommendations would you like to see in a professional report.

Whilst the four best recommendations for the scenario set, should enable you to achieve a CC, you may want to put one or two extra recommendations in if you have the time available. You shouldn't lose any marks for doing this unless it impacts your time on future requirements.

Watch out for our tips on Requirement 2 and Requirement 3 conclusions and recommendations!!

A number of these key learning points are included in our mock examinations and our marker feedback also helps you to better target your answers on all of the four professional skills being assessed. If you have any concerns about the case study, try one of our mocks and see how we can help improve your answer and confidence ahead of the real exam.

How We Can Help You

Written to help you improve your technique and confidence ahead of the real exam

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