Page 19 - CIMA SCS Workbook November 2018 - Day 2 Tasks

Chapter 10

FINANCIAL STRATEGY (F3)

PRACTICE TASKS

EXERCISE 1

UPDATE

You arrive at work on a Monday morning to find a note from Randal Edwards, Novak’s Director of
Finance, on your desk.

He has asked you to meet him in his office at 09.00, to discuss the contents of an email he has
received from Marcia Conelli (one of the Novak non-executive directors).

TRIGGER

“On Friday I received this email from Marcia. I’ve printed it out so that you’ve got a copy (see
reference materials).

She’s right that Novak has slipped behind PosterRend this year in terms of revenue. We are
planning to launch three new products in the near future that will hopefully help to boost our
sales. However, I think Marcia is right that the other directors might look to me for some expert
advice at the next Board meeting about the options for increasing Novak’s growth even more.

The trouble is that I’m tied up with the auditors at the moment, so I don’t have time to prepare
anything to present at the Board meeting.

To help me out, I’d like you to prepare some briefing notes for me on the following two key
issues:

First, could you explain what are the advantages and disadvantages of growth by acquisition
compared to organic growth?

Second, please give some examples of the sort of synergies that could be generated if Novak
decided to acquire another company in the pharmaceutical sector.

This is quite urgent – the next Board meeting is on Wednesday. Could you please try to get the
briefing notes to me by lunch time?”

KAPLAN PUBLISHING 35