1/10/24, 3:59 PM TestReach
SBL Specimen 1
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Exhibits You are a management consultant throughout the case study.
1. An overview
The following exhibits, available on the left-hand side of the screen, provide information
2. Background report relevant to the tasks.
3. Transcript of interview with CEO
1. An overview of this case study.
2. A background report on DCS Company’s organizational overview, the external
4. Extracts - integrated reporting data
environment and the business model researched and prepared by Danny Leman, your
5. October board report colleague.
6. Evaluation of options 3. A transcript from an interview which was held between you and Java Peraya, the CEO
of DCS Company.
7. Notes - middle management focus group
4. summary of financial and business performance of DCS Company extracted from the
Integrated Report (20X2-20X5) presented to you by the finance director of DCS
Tasks
Company.
Task 1a (31 marks)
5. The October board report, notes from a recent board meeting which include strategic
Task 1b (14 marks) choices facing DCS Company – presented to you by the marketing director of DCS
Company.
Task 1c (8 marks)
6. An evaluation of alternative future strategies being considered by the DCS Company
Task 1d (7 marks)
board, prepared and presented to you by your colleague, Freddie Lithium.
Task 2a (8 marks)
7. Minutes from the focus group meeting you held with middle management of DCS
Company.
Task 2b (14 marks)
This information should be used to answer the tasks within your chosen response
Task 3 (18 marks)
option(s).
Response Options
Word Processor
Spreadsheet
Slides
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https://cbept.accaglobal.com/tr-candidate/exam 1/1
Extracts of the integrated reporting data (20X2–20X5) from the finance director – Tosh Mondal
Financial performance: (all figures in $m)
Financial periods: 20X5 20X4 20X3 20X2
Sales revenue (domestic and international) 6.95 7.4 6.8 4.75
Cost of sales 4.97 4.85 4.25 2.62
Gross profit 1.98 2.55 2.55 2.13
Overhead expenses 1.12 1.51 1.41 1.3
Profit before tax and finance costs 0.86 1.04 1.14 0.83
Finance costs 0.69 0.38 0.37 0.14
Tax expense 0.02 0.06 0.08 0.54
Profit for the year 0.15 0.6 0.69 0.54
Other data: 20X5 20X4 20X3 20X2
Number of employees 127 135 143 150
Staff turnover (%) 10% 7% 5% 4%
% of orders delivered late 10% 8% 7% 5%
Forward contract order book (number of orders) 2500 3750 4150 3505
Customer complaints as a percentage of total orders and
existing contracts 3.40% 2.40% 2% 1.50%
Employee satisfaction survey score (100% max) 61% 65% 68% 72%
Investment in non-current manufacturing equipment as a
percentage of sales revenue 7% 8% 8% 10%
R&D expenditure as a percentage of sales revenue 3% 5% 5% 6%
Carbon emissions in kg per $1,000 sales revenue 80 75 65 60
Table 2: Freddie Lithium's spreadsheet
Payback Spreadsheet - DCS strategy
evaluation
Strategy 1: Re-focus strategy: 20X5 20X6 20X7 20X8
With total cash contribution maintained: $'m $'m $'m $'m
Data Communications 1.55
Network supply and support 0.85
(1) Total for Strategy 1: 2.4 2.4 2.4 2.4
Strategy 2: Re-alignment strategy Growth: Probability:
Network supply and support ($0.85m): 25% 0.6 1.063 1.328 1.66
15% 0.3 0.978 1.124 1.293
10% 0.1 0.935 1.029 1.131
(2) Expected value from network growth: 1.024 1.237 1.497
(3) Data communications ($1.55m) 10% decline 1.55 1.395 1.256 1.13
(4) Total cash contribution from Strategy
2: (2+3) 2.419 2.492 2.627
(5) Incremental cash contribution (4-
1): 0.019 0.092 0.227
Additional annual fixed costs based on
expected growth:
Growth: $m Probability:
Network supply and support ($0.85m): 25% 0.75 0.6 0.45 0.45 0.45
15% 0.45 0.3 0.135 0.135 0.135
10% 0.25 0.1 0.025 0.025 0.025
(6) Expected value of additional cash
fixed costs: 0.61 0.61 0.61
(7) Cash fixed cost savings (Data comms) 0.5 0.5 0.5
(8) Net additional cash fixed costs: 0.11 0.11 0.11
Incremental cash contribution from
Strategy 2: (5) 0.019 0.092 0.227
Incremental cash fixed costs (8) 0.11 0.11 0.11
Incremental net cash contribution from
Strategy 2 compared with Strategy 1 -0.091 -0.018 0.117
Cumulative payback period = 2 years and
11 months
1/10/24, 4:20 PM about:blank
(a) From the information you have collated, draft a section of the consultancy report for the directors of
DCS Company to include the following:
(i) An analysis of the industry and market which DCS Company is competing in, using an
appropriate model.
(15 marks)
(ii) An evaluation of the overall performance of DCS Company between 2012 and 2015 from an
integrated reporting perspective.
(12 marks)
Professional Skills marks are available for demonstrating evaluation skills relating to DCS Company’s
environment and performance.
(4 marks)
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1/10/24, 4:20 PM about:blank
(b) You are now reviewing the transcript of the interview you held with Java Peraya, the CEO of DCS Company
and you identify some key weaknesses relating to the governance of DCS Company which you want to include
in the consultancy report.
Required:
Explain the key weaknesses of the current governance structure of DCS Company since it became a public
limited company, recommending how they should be addressed.
(12 marks)
Professional Skills marks are available for demonstrating scepticism skills in identifying key weaknesses
from the information given.
(2 marks)
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1/10/24, 4:21 PM about:blank
(c) Under the Strategy and resource allocation heading in the October board report, the possibility of DCS
Company supplying and supporting such technologies as cloud computing and big data analytics is referred to.
To accompany the consultancy report a presentation is needed about the exploitation of such new technologies.
Required:
Prepare information for two presentation slides to be presented to the DCS Company board, including relevant
bullet points and supporting notes, highlighting the key benefits and identifying the main opportunities presented
by big data analytics to DCS Company and its customers.
(6 marks)
Professional Skills marks are available for demonstrating communication skills in highlighting the key
points to include in the slides and for clear supporting notes.
(2 marks)
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1/10/24, 4:21 PM about:blank
(d) You have noted from information you have gathered that DCS Company has an increasing carbon footprint,
which it estimates in total, but is failing to control adequately. As part of the consultancy report you are
considering recommending to DCS Company that it commissions a specialist environment and sustainability
consultancy company to assess these issues at DCS Company.
Required:
Draft a concise section of the consultancy report which constructs the case for commissioning an environmental
and sustainability audit of DCS Company, from both a financial and environmental perspective, suggesting ways
in which the consultants might assist DCS Company managers to become more sustainable in the management
of the DCS Company carbon footprint.
(5 marks)
Professional Skills marks are available for demonstrating commercial acumen in identifying how DCS
Company could benefit from the findings of the audit.
(2 marks)
(60 marks)
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1/10/24, 4:21 PM about:blank
2. In the October board report, the executive directors refer to a number of factors affecting DCS Company and
the need to choose one of two alternative strategic options. You now need to do the following:
Required:
(a) Draft a section of the report to identify and briefly discuss THREE main risks which DCS Company currently
faces and plot them on a heat map, recommending appropriate strategies to manage those risks using an
appropriate risk management framework.
(6 marks)
Professional Skills marks are available for demonstrating commercial acumen in identifying and locating
the risks appropriately.
(2 marks)
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1/10/24, 4:22 PM about:blank
(b) You are reviewing the spreadsheet prepared by your colleague Freddie Lithium which evaluates the strategic
choices facing DCS Company in the next three years, to ensure its validity in supporting your recommendation
in the consultancy report.
Required:
(i) Critically evaluate the contents of the spreadsheet including any assumption made by the DCS Company
board.
(5 marks)
Professional Skills marks are available for demonstrating scepticism skills in analysing the spreadsheet
and any supporting assumptions.
(2 marks)
(ii) Prepare some key recommendations for the consultancy report, using appropriate supporting evidence to
advise which of the two strategies, re-focus or re-align, DCS Company should implement. (5 marks)
Professional Skills marks are available for demonstrating commercial acumen skills in justifying the
recommendations.
(2 marks)
(22 marks)
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1/10/24, 4:22 PM about:blank
You have highlighted from your interview with Java Peraya and from your notes from the middle management
focus group meeting, that there are some key stakeholder management and engagement issues at DCS Company.
You are now preparing working notes, with relevant visual aids, which will form a key part of your presentation
of the overall consultancy report.
(a) Using appropriate stakeholder analysis, evaluate how the relative power and interests of the following
three stakeholder groups and the strategies for engaging with them should have changed after DCS
Company became a public limited company.
– Shareholders;
– Employees;
– Lenders.
(9 marks)
Professional skills marks are available for analytical skills for assessing the relative power and interest
and how to engage with these stakeholders before and after flotation.
(2 marks)
(b) Criticise the CEO’s and HR director’s ethical and professional behaviour relating to the design,
conduct, and reporting of the staff satisfaction survey.
(5 marks)
Professional skills marks are available for scepticism skills in identifying ethical and professional issues in
the conduct of the survey and communicating these criticisms to the client in a way that is appropriate.
(2 marks)
(18 marks)
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