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Feb 2016 – Strategic Case Study

Rio

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Senior Finance Manager of Rio

You are the Senior Finance Manager at Rio Fashions, A Fashion Retailer.

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Role of the Senior Financial Manager

Your role includes the following activities from each of the subjects in the CIMA Strategic Level

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E3

• Analysis of strategic options

• Recommendation & justification of analysed strategic options

P3

• Risk associated with strategic options needs to be scrutinised

F3

• A financial strategy needs to be formulated ensuring the strategy is adequately funded

Rio and The Fashion Industry

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Fashion Industry

Fashion industry is multibillion-dollar global enterprise devoted to the business of making and selling clothes.

Some observers distinguish between the fashion industry (which makes “high fashion”) and the apparel industry (which makes ordinary clothes or “mass fashion”), but by the 1970s the boundaries between them had blurred.

Fashion is best defined simply as the style or styles of clothing and accessories worn at any given time by groups of people.

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Worlds Largest Fashion Retailers

Ranking is based on Forbes - Global 200

Which ranks of the World’s largest Public Companies

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Source: http://www.forbes.com/global2000/


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Company Background

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Name – Rio

Industry – Fashion Industry

Home Country – Sealand

Inception – 1990

Flotation – 2007

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Company Profile

Operations – Principally a fashion retailer, but a key part of its business model is managing a complex distribution network. – The majority of Rio’s products are manufactured by carefully selected outsourced suppliers. – It also has its own production factory based in northern Europe. Rio also operates its own distribution centres and manages a road haulage fleet of trucks in Europe and in Asia.

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Company Profile

Revenue – € 2,557 million

Gross Profit –€ 401 million

Net Profit – € 286 million

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Company Profile

(2015)

Rio – Company History

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Founded by Rita Irina Oliviera

First named as Rio Stores

First store opened in Capital city of

Sealand

Timeline

1990

2015

Flotation on a major

European stock exchange 2007

Rio operates 976 stores

across several European &

Asian countries

after 2001

New designers & experienced

managers recruited

Raising loan finance

2010 Launched website for online sales

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Rio and Rita

Rita Oliviera’s born in 1957 was 33 years when she started the Rio in 1990. She was not very young which means she should have work for at lease of 10 years.

Company started growing for 12 years (1990-2002) with the cash generated from Operations and Bank loans.

In the year 2001 it was clear that the shortages of long term fund and lack of senior management skills.

In the year 2007 Rio registered under a major European stock exchange.

There will be a huge impact if Rita resigns from Rio; She is the founder

She holds 20% of shares

CEO of Rio with a greater knowledge on Business and Industry

She was running the business by herself till the IPO happened (2007)

She is also a Fashion designer which adds value to Rio

Rio’s Board & Senior Management

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Name Designation Age Year of Joining

Rita Irina Oliviera CEO 58 1990

Cedric Pirlo Non-executive Chairman 56 2002

Stella Erikson Finance Director 52 2003

Mani Kaur Logistics Director 44 1993

Carly Edmonton Marketing & Merchandising Director

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Diana Templeman IT Director 42 2007

Kamal Singh Procurement Director 53 2006

Linda Lee Human Resource Director 34 2011

Sabine Roos Head of Property 29 2013

Ralf Helber Head of Franchising 38 2008

Veronique LeFevre Head of Design 47 2012

Stavros Axis Head of CSR 39 2010

Most of the Board of directors have joined Rio before the IPO in 2007

Sealand

A European country

The currency of Sealand is €

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Fast Fashion

Fast fashion is a contemporary term used by fashion retailers to express that designs move from catwalk quickly in order to capture current fashion trends.

Fast fashion clothing collections are based on the most recent fashion trends presented at Fashion week in both the spring and the autumn of every year.

Emphasis is on optimizing certain aspects of the Supply chain in order for these trends to be designed and manufactured quickly and inexpensively to allow the mainstream consumer to buy current clothing styles at a lower price.

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Fast Fashion

This philosophy of quick manufacturing at an affordable price is used in large retailers such as H&M, Zara, Peacocks, and Topshop.

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Rio’s stores sell well designed, quality products.

Rio differentiates itself from other fashion retailers by its innovative, up-to-date designs.

Rio also provides an excellent customer experience, due to attractive stores and high levels of customer service.

Rio does not compete on price. The prices charged by Rio

reflect the reputation which the brand has established.

Rio’s Fast Fashion Business Model

Rio sells only its own designs under the ‘Rio’ label in its own stores, which range from high street stores to out of town and city centre shopping malls. Rio’s basic business model is based on the ‘fast fashion’ concept, whereby designs are prepared and approved within Rio.

Rio’s Fast Fashion Business Model

Zara

Zara is a Spanish clothing and accessories retailer based in Arteixo, Galicia, and founded in 1975 by Amancio Ortega and Rosalía Mera.

It is the flagship chain store of the Inditex group, the world's largest apparel retailer.

Zara was described by Louis Vuitton Fashion Director Daniel Piette as "possibly the most innovative and devastating retailer in the world.“

Zara has also been described as a "Spanish success story" by CNN.

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Zara Responding to Consumer Trends!

Spanish apparel company Zara has built its strategy around consumer trends, embracing the fast-changing tastes of its customers.

To do this successfully, Zara has developed a highly responsive supply chain that enables delivery of new fashions as soon as a trend emerges.

Zara delivers new products twice each week to its 1,670 stores around the world. This adds up to more than 10,000 new designs each year! It takes the company only 10 to 15 days to go from the design stage to the sales floor.

Because of this streamlined model, Zara is not forced to be ahead of the curve. Rather, they exist on the curve, evaluating trends first, then following.

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Pricing

From the Pre-seen:

The above statement in the pre-seen states that in order for Rio to stay competitive it needs to consider its pricing strategies as well.

‘Primark’ is a company which has an aggressive pricing strategy giving out fashion at ‘cheap’ prices.

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‘’ However, whilst price is still an important determinant of customers’ buying behaviour….’’

Primark’s Pricing Model

An aggressive pricing strategy practiced by Irish fast-fashion retailer Primark is a threat to its competitors.

Primark is long known to European shoppers as a place to find affordable yet stylish additions to their wardrobes.

Primark’s prices are drastically lower than any other U.S. competitor in the fast-fashion market such as H&M, Old Navy and Forever 21.

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Primark’s Pricing Model

The Irish chain offers lower prices by about 40% from H&M, according to a Sanford Bernstein analysis.

And while Old Navy and Forever 21 may only share overlapping consumer segments with Primark, their prices are still on average 30% and 20% percent higher, respectively.

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Why do we grow Franchised stores? 21.6% growth in the number of stores compared to the year 2014.

This could be due to expansion of the Brand around the Globe.

Franchising would increase the value of the brand and market share however there is also a high franchising risk when it comes to Quality and standard.

Since the size of the stores are not given it is difficult to accept the given growth rates of the managed and franchised stores.

Rio’s operating profit margin is 15.7 % for the year ended 2015. The analysis on each type of Sales given below.

Sales Growth of Rio

€’million Year ended 31 Dec 2015

Year ended 31 Dec 2014

% growth in sales revenue

% growth of the no of stores

Managed stores 2,323 2,070 12.2% 9.9%

Franchised stores 32 25 28.0% 21.6%

Internet sales 202 146 38.3% -

The total operating profit margin given as 15.7% cannot be the margin generated in each revenue segment.

Activity based costing should be used to identify the actual operating profit generated from each revenue segment.

Sales & Profit of Sales Channels

Year ended 31/12/2015

Revenue (€’million)

Operating Profit (€’million)

Operating Profit %

Managed stores 2,323

Franchised stores 32

Internet sales 202

Total Revenue 2,557 401 15.7%

Activity based costing (ABC)

‘’An approach to the costing and monitoring of activities which involves tracing resource consumption and costing final outputs.

Resources are assigned to activities, and activities to cost objects based on consumption estimates.

The latter utilize cost drivers to attach each activity cost to outputs’’

CIMA official terminology

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Appendix 7 of the Pre-seen contains the 5 year business plan of Rio. (page 29)

When comparing the actual revenue growth percentages from 2014 to 2015, the planned figures seems to be aggressive and could prove to be unrealistic as well.

The Future of Rio

2014 2015 2016 2017 2018 2019 2020

Number of stores 880 976 1086 1211 1351 1506 1676

% growth from prev year 10.9% 11.3% 11.5% 11.6% 11.5% 11.3%

€’million

Revenue 2,241 2,557 2959 3429 3975 4607 5332


Operating profit 349 401 482 576 688 819 973


Actual Plan

Rio and the Generic Strategies

Rio’s fast fashion model doesn’t concentrate on cost effectiveness instead they are following the Differentiation concept.

Rio differentiates itself from other fashion retailers by its innovative, up-to-date designs.

Rio and the Generic Strategies

As per Michael Porter’s generic strategies there are three concepts a company could follow to compete;

Cost Leadership : This strategy involves the firm winning market share by appealing to cost-conscious or price-sensitive customers. This is achieved by having the lowest prices in the target market segment, or at least the lowest price to value ratio (price compared to what customers receive).

Differentiation : Differentiate the products/services in some way in order to compete successfully. Examples of the successful use of a differentiation strategy are Hero, Honda, Asian Paints, HUL, Nike athletic shoes (image and brand mark), BMW Group Automobiles, Perstorp BioProducts, Apple Computer (product's design), Mercedes-Benz automobiles, and Renault-Nissan Alliance.

Focus : This dimension is not a separate strategy for big companies due to small market conditions. Big companies which chose applying differentiation strategies may also choose to apply in conjunction with focus strategies (either cost or differentiation).

Real World Retail Companies

Examples of Retailers following Differentiation concept; M&S Levis Hugo Boss PVH

Examples of Retailers following Cost leadership concept;

Tesco Wal-Mart Asda Primark

Fashion Seasons

The four seasons in Europe will have less effect on Rio’s Sales as Rio does not produce for each of the seasons, but it follows a continuous fashion and style changes throughout the year.

Company Operations

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Operations

The steps of design to finish products in a Rio Store;

Information about the latest customer trends comes directly from Rio’s

own stores on a daily basis.

Each store manager, using a tablet device and through the Point of Sales (POS) system within each store, feeds back the store’s daily sales data.

Rio aims to have any new design or modification of an existing design in the stores within three weeks.

New and updated product designs from Rio's design teams are downloaded daily, via a secure Electronic Data Interchange (EDI) system to the selected outsourced supplier’s Information System.

Rio’s design team will place a firm order based on a mixture of criteria including price, quality of material and delivery times

Manufactured products are then delivered to the distribution centre nearest to the outsourced supplier.

Transport & Logistics

From the Pre-seen:

This operation is not a core activity of Rio as its different to the main line of business.

Mani Kaur, the Logistics Director is the head of this function.

At the exam there could be possible questions relating to outsourcing of this function.

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‘’ Rio also operates its own distribution centres and manages a road haulage fleet of trucks in Europe and in Asia.’’

Revenue Analysis

Revenue from customers for

sales

Franchising fee received by Rio

The mark-up on inventory

supplied to Rio’s franchisees

Rio’s Revenue Analysis

Multi Channel Retailer

Rio operates a number of routes to market which are: Rio managed stores Internet sales Franchising

Since Rio is a multi channel retailer the online prices could be different to the in-store prices. Its highly likely that the online

store offers a lower price or prices with discounts.

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Rio’s Stores

All of Rio’s stores in Europe are managed by Rio.

However, since expanding into Asia, Rio has identified the need to operate franchised stores.

The table below shows the number of managed and franchised stores.

No of Stores at 31/12/2015


% growth

Managed Stores

886 806 9.9%

Franchised Stores

90 74 21.6%

Total Stores 976 880 10.9%

Rio’s Stores by Continent



% growth

Europe 838 776 8.0%

Asia 138 104 32.7%

Total Stores 976 880 10.9%

85.9% stores in Europe

14.1% stores in Asia

Rio’s Stores in Europe

Rio’s European stores are predominately in northern and central Europe

Rio does not currently have many stores in southern Europe

Rio’s Stores Setup

Rio refers to the statement that it doesn’t follow the format “Shop within a shop”. This means Rio does not currently rent space in department stores.

A store-within-a-store is an agreement in which a retailer rents a part of the retail space to be used by a different company to run another, independent store.

Sales and Demand

Over 90% of Rio’s sales revenue is generated by full price products this means Rio has developed a high Brand value which creates customers to accept the price it has been quoted on the products.

Rio’s focus on shorter lead times has allowed it to develop its high fashion principle and the scarcity of supply provides an image of exclusivity amongst its customer.

When there is a scarcity of supply the demand for the products increases which creates the customers to buy the products at it’s full price.

Internet Sales

The act of purchasing products or services over the Internet.

Online shopping has grown in popularity over the years, mainly because people find it convenient and easy to bargain shop from the comfort of their home or office.

Online shopping has revolutionized the business world by making everything anyone could want available by the simple click of a mouse button.

Internet Sales of Rio

In 2010, Rio invested over €25 million on the launch of its website to offer online shopping to its customers within the European market.

At the end of 2015 Rio’s website was fully operational across 20 of the 30 European countries in which Rio currently operates stores.

Rio’s website allows customers to view and order the full range of products they could otherwise find in its store.

In the year ended 31 December 2015, Rio achieved internet sales of €202 million.

This is a 38% growth from last year. (Year ended 31 December 2014)

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Franchising

Franchising is the practice of the right to use a firm's business model and brand for a prescribed period of time.

The Franchisee will have to pay a franchising fee.

Franchising is a network of interdependent business relationships that allows a number of people to share:

A brand identification

A successful method of doing business

A proven marketing and distribution system

Franchising

Franchised stores are managed and run by the franchisee who retains all of the profit generated by the franchised stores but must pay Rio a franchising fee and also pay Rio for supplying the products sold.

The franchisee is also responsible for working capital management, running the franchised store and all revenues and operating costs associated with running the store, such as employing store staff.

Franchising

The franchised stores are allowed to sell only Rio branded products.

Rio provides the franchisee with support, the use of the Rio brand name, all of the products it can sell and also some marketing support.

Franchisees pay Rio directly for the inventory supplied

Supplier Management

Supplier management is the discipline of strategically planning for, and managing, all interactions with third party organizations that supply goods and/or services to an organization in order to maximize the value of those interactions. This entails creating closer, more collaborative relationships with key suppliers in order to uncover and realize new value and reduce risk of failure.

Supplier Management

Rio operates a mixed manufacturing strategy.

Rio’s own production factory manufactures 30% of the total sales volume, 40% is outsourced to suppliers in Asia and 20% is outsourced to suppliers in eastern Europe.

The remaining 10% of Rio’s production is manufactured by highly specialist outsourced suppliers.

Rana Plaza Collapse

The 2013 Savar building collapse or Rana Plaza collapse was a structural failure that occurred in April 2013 in Dhaka, Bangladesh where an eight-story commercial building named Rana Plaza collapsed.

It is considered the deadliest garment-factory accident in history.

Dozens of consumers in the United States spoke out against unsafe working conditions found in the factory building.

People also unleashed their anger at fashion & clothing retailers that did not have any connections to that specific building, but are known to source from factories located in Bangladesh.

Analysis on Rio

Rio’s haulage fleet (transport) is a different Business hence there can be some questions expected.

Rio’s Non- current assets details; This comprises Rio’s Head Office building, fixtures and fittings in all stores, plant, machinery and fixtures at the distribution centres, Rio’s vehicle fleet and IT hardware and software.

Rio leases all of its stores and distribution centres. Rio does not believe that its lease arrangements give it the risks and rewards of ownership and these are therefore excluded from non-current assets.

KPIs

Rio has a system of indicators to measure the performance of the company.

The Balance score card can be applied to measure the performances.

This is a concept which measure Financial as well as Non-financial measures of Rio.

Four indicators such as Financial, Customer focus, Learning and growth, Internal process can be used in order to prepare the score card.

Example :

Rio monitors the ‘footfall’, which is defined as the number of customers entering all of its stores, irrespective of whether a purchase is made or not. This could be taken under customer focus so that can identify why the sale is made out or not?

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Glory Soccer Club vs. Rio Fashions

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Applicability of Strategic case study – August 2015 to Strategic case study – February 2016

August 2015 Case – Variant 1 – Task 1

Glory - Variant Summary

Signing an expensive

player to the team and it’s implications

Task

Risks of getting the player and factors

relevant to be considered

Financial impacts both positive and

negative

Application to Rio Case

Rita Oliviera could decide to get a

fashion designer who is famous in the

world of fashion as a celebrity stylist due to the novelty in her

designs.

The same questions could be asked based

on this situation.

Risks

1)We might get more sales (upside risk)

2)remove the risk that our competitor would sign her (upside risk)

3)the performance could not be worth the investment

4)risk that other designers would quit the company due to demotivation

5) If the designer doesn’t perform well we won’t have a choice but, to cancel the contract.

6) risk that the designer will not fit our fast fashion culture

Financial impacts

Positive

1)Increase in revenue from the new customers that get attracted

2) more sales from existing customers

Negative

1)increase in costs(wages, other benefit entitlements)

2)incurring a higher investment

3) Competitors recruiting more reputed designers due to our action of recruiting will make us recruit more in order to match with their position.




Signing an expensive

player to the team and it’s implications

Task

Share price reaction,

communication to media

Motivating and driving team

performance and ethical implication

of misleading players

Application to Rio

The signing of the fashion designer could create a

huge uproar in the market and the investors would see this as a good sign.

However, we will have to manage with the fashion designers as this person would entitle for more

benefits and compensation than the

industry par which would lead to demotivation of

others.

Share price

1)Possibly increase

2) Rita holds 20% of shares and if she holds on to them positive signal. If not, share prices would fall.

3) 64% institutional shareholders and could be loyal to the Rio brand. If so, share price increase.

(Consider the shareholders that we have in the company and their possible reaction and then, give your view about the short term reaction and the long term reaction)

Communication to media (Key message)

This is done for the betterment of Rio; to improve our designs and to provide a better customer service (message should always be positive)


Implications for Motivating and driving performance

1)the demotivation would be higher within the team having an impact on their performance

2)other designers feeling jealous about the new designer having an impact on motivation

3)however, the new designer could also inspire to perform better

Ethical implication

-lack of integrity

[Based on the situation write practical points and then it would be better to make reference to the CIMA code of ethics]




National team Participating

in international

matches

Task

Challenges in building and

motivating the national team

Predicting long term success and the use

of big data in the purpose

Application to Rio

We could decide to go for a new geographical

region (Australia or South America) and

meet new competitors of a different scale.

These questions would then be applicable. The

question could be to motivate and build a

team of store managers to operate in

the new market.

Challenges

1)Resourcing the team

2) selection of the best combination of members to the team

3) how to motivate the team members

4)rewards (financial incentives, career progression)

5)appointing a team leader

Predicting long term success

1)Delphi method

2)get the view of our experienced management team

3) past practice and similar incidents happened before

4) Rita will have a good experience in predicting results due to her involvement in the industry for a long time.

Big data

-small description about what is big data

-modes- social media, researches, industrial magazines, articles

- show how the above modes can be specifically used




National team Participating

in international

matches

Task

Share price movement to the

said proposal

Viability of structure

Performance evaluation of the

new proposal

Application to Rio

If it be a share price movement it will be likely due to the fact that we go for a new region. A question on share price movement

could be expected. Also, there could be a question on how we

can evaluate the performance of the

new managers.

Share price

-consider the shareholders that we have in the company and their possible reaction and then, give your view about the short term reaction and the long term reaction

Viability of structure

1)briefly mention the current structure

2)mention the benefits and the drawbacks of the current structure

3) based on the above mention whether the structure has a viability to succeed or not

Performance evaluation of the new structure

-if we are going for a new region it is unfair for us to measure the performance of managers using financial indicators because, it is unlikely for them to gain a considerable sales amount.

Therefore, we will need to measure performance in other nonfinancial methods.

-the answer should be written based and related to the scenario specifically.




Expanding the current

stadium and an implication

on possible renaming

Task

Is expansion sensible

Will scenario planning help the

decision

Is a rights issue possible

Application to Rio

The scenario could come as either to

expand our operations within

the regions that we now operate or

either go for new regions.

Expansion sensible

1) Evaluate the position of the company (cash position, ability to get extra funding, management expertise etc.)

2) Look at the related external environment factors too.

3) Based on those factors suggest whether it is sensible to expand or not.

Scenario planning

-What is scenario planning (give a brief description)

-How will it assist if we use it

Rights issue

-Advantages of going for a right issue- cost is low, we are already in stock market etc.

-will our rights issue succeed in getting enough funds

(Consider the share holders, share holder impression about the company, current share price, market condition etc.)

-If the above are favorable then suggest to go for a rights issue




Expanding the current

stadium and an implication

on possible renaming

Task

Handling shareholders and

media

Will the unhappiness of the

fans matter

Implications on share price and

ethics

Application to Rio

These questions would be exactly

applicable only if we change the company

name.

Handling share holders and media

-Never give a wrong message or let anyone misinterpret.

-Inform then the current condition and always be ready to respond to them on any concern

-single point of communication

[Based on the specific scenario given the question should be answered ]

Unhappiness of Customers

-If the customers are unhappy with our new name it will definitely matter as sales will go down and they might consider moving to another brand. Customer loyalty is the key to the success of Rio.

Share price and ethics

- consider the shareholders that we have in the company and their possible reaction and then, give your view about the short term reaction and the long term reaction

- Based on the situation write practical points and then it would be better to make reference to the CIMA code of ethics




Conflict in internal

management between the chairman and

the team manager

Task

Risks associated with chairman of

Glory

Process management

Team managers accountability

Managing working relationships

Application to Rio

It is possible even at Rio where the

internal parties could make

decisions in their own accord without

proper processes and streamlined decision making.

For Rio it could be the intervention of

Rita.

Risks associated with active management

-the chairman may not be the expert

-demotivation of the management team

-the responsibility of a decision cannot be clearly allocated

-the lower level staff would get confused over whom they need to listen to.

[ based on the specific situation the points would need to be altered]

Team managers accountability

-should only be made accountable for the decisions he has made otherwise, it would lead to demotivation.

Managing working relationships

1)Explain the roles of the people who are in conflict

2)Explain the importance of their contribution to the company

3) Appoint a suitable party with good communication skills and personality to resolve the conflict and to do the communication with both the parties.

[ specific points will need to be mentioned as per the scenario ]




Fault with our t-shirt supplier

Task

Response to claim

Conducting internal audit

Application to Rio

This would be a severe issue in the

context of our company, as already

the industry is heavily regulated

and as we too have processes to avoid

such situations.

Response to the claim

-The way in which to respond to a claim would be dependent on the specific claim and the person to whom we are responding.

Generally, the answer points are;

1) A responsible and a reputed person with the necessary knowledge should make the response.

2) Have a structured response and avoid adding personal views.

3) Response should be brief and clear.

Internal Audit

-Mention whether it is a compliance audit is it of another kind.

-what will be covered during the audit (scope)

-who will conduct it

-Any other specific thing that needs to be done based on the individual situation should be mentioned.





Task

Going for manufacturing and selling t-shirts on

our own.

Risks.

Financial management and

motivational challenges and how

to overcome.

Application to Rio

We are already in the process of manufacturing some garments

(30% of total volume)on our

own.

Risks

-mention the possible upside and the downside risks that we will encounter if we go for this process.

-make the risks scenario specific -general points would be;

1)possible failure

2) Managing the operations (working capital etc.)

3)lack of expertise

4)cost

Financial management challenges

-investment, quantification of the costs and spending on them, opportunity cost, working capital, purchase of inventory

Motivational challenges

-The motivation challenges would be based on the specific situation encountered

How to overcome

-This should be suggested relating it specifically to the respective situation and the company position





Task

Additional skills required for new

business

Evaluating performance

Application to Rio

We will need more staff, more

experienced management and also new factory

complexes.

Skills required

For Rio manufacturing of garments is familiar therefore the additional skills will mostly be in respect of

1)managing operations

2) efficiency to supply within a short time frame

3) Quality control etc.

Performance evaluation

In general, performance evaluation should cover financial and nonfinancial indicators. Others should be suggested based on the situation.




Going for a new business

with a previous not-so-good party.

Task

commercial viability

Associated risks

Application to Rio

A new business for Rio would be

to go for perfumes or it could be

going for interior designing or

starting a fashion institute that

awards degrees and other courses.

Commercial viability

1) Evaluate the position of the company (cash position, ability to get extra funding, management expertise etc.)

2) Look at the related external environment factors too.

3) Based on those factors suggest whether it is sensible to expand or not.

Risks associated

-mention the possible upside and the downside risks that we will encounter if we go for this process.

-make the risks scenario specific






Task

Leadership challenge within divisions

Accepting company chairman as mentor

Investment

Ethics

Application to Rio

A new business for Rio would be

to go for perfumes or it could be

going for interior designing or

starting a fashion institute that

awards degrees and other courses.

Leadership challenges

-scenario specific

Mentorship and investment

-Scenario specific

Ethics

[Based on the situation write practical points and then it would be better to make reference to the CIMA code of ethics]






Task

best valuation method(profit or asset

basis)

Glory’s supporters relationship with

Praree city

Encouraging Glory’s fans to support Praree

city

criteria to evaluate the management team

Application to Rio

The questions are applicable except

for ones specifically

relating to Glory.

Best valuation method

-List out the possible valuation methods and it’s applicability in the context of Rio

-Suggest the best and always support your answer with justification.

Management team

-Evaluation should be structured based on the specific situation and the purpose of evaluation


The End of Part1

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