Prediction and prevention Students are required to be familiar with failure prediction models based on both quantitative and qualitative information, and also to comprehend the underlying factors leading to the decline and eventual demise of a company. In this article, the various failure prediction models are critically discussed and an attempt is made to identify the most significant reasons for […]

This article explains why increasing recognition is given to satisfying the needs of different stakeholders. Recent years have witnessed major changes in business structure. In general, today’s businesses are far more complex in terms of both structure and operation. Increasing recognition is given to satisfying the needs of different stakeholders who include customers, suppliers, employees, local communities, investors, lenders and

A focus on the success of airlines such as EasyJet and Ryanair and how the balanced scorecard might be utilised to maintain the low-cost carriers’ competitive edge. The emergence in the 1990s of low-cost airlines and the expansion of the European travel market has shown how competition can significantly affect the structure of an industry. Ryanair and easyJet are now

This article outlines the issues which are central to the understanding and assessment of performance measurement. It has become increasingly important for organisations to develop systems of performance measurement which not only reflect the growing complexity of the business environment but also monitor their strategic response to this complexity. The need for good performance management is an ongoing issue which

This article provides a brief overview of two models which can assist accountants, not only in the determination of business strategy, but also in the appraisal of business performance. Porter’s Five Forces Model The use of Porter’s five forces model (see Figure 1) will help identify the sources of competition in an industry or sector. The model has similarities with

The term ‘charity’ refers to the practice of benevolent giving. Charities are established for general or specific philanthropic purposes. They are one type of not-for-profit organisation, but with several additional distinguishing features: they exist entirely to benefit defined groups in society as their purposes are philanthropic, they can usually avail themselves of favourable tax treatment, and for this reason have

This article explains some of these features. The first part of the article broadly describes the generic characteristics of not-for-profit organisations. The second part of the article takes a specific and deeper look at charities, which are one of the more important types of not-for-profit organisations. Several papers in the ACCA Qualification may feature questions on not-for-profit organisations. Although many

Public sector organisationsPublic sector organisations come in many shapes and forms. The most obvious examples are schools and hospitals, police forces and local transport providers, but there are many less visible organisations such as regulatory bodies. The objectives of public sector organisations are very different from those of commercial organisations, and this can make performance management more complicated. The following

Transfer prices are almost inevitably needed whenever a business is divided into more than one department or division In accounting, many amounts can be legitimately calculated in a number of different ways and can be correctly represented by a number of different values. For example, both marginal and total absorption cost can simultaneously give the correct cost of production, but

The second part of an article on Economic Value Added (EVA focuses on how to interpret the calculated EVA and its use as both an organisational and divisional performance measure. Relevant to ACCA Qualification Paper P5 In the first part of this article, we considered the rise in popularity of Economic Value Added – or EVA – as an alternative