From mocks

Question 1

Revenue share for top 10 writers increased, which could indicate too much…?

Answer 1

Revenue share for top 10 writers increased, which could indicate too much dependence/higher not necessarily better

Question 1

CoS increased at a higher rate than revenue, showing…?

Answer 1

CoS increased at a higher rate than revenue, showing poor direct cost control

Question 2

Poor performance- for example- in mechanical sales.

What should you recommend?

Answer 2

Further investigation of reasons for poor performances/remedial measures.

Question 3

Recommendation for R1 section: calculate GP and GP% by ____ and by ____ to allow deeper analysis

Answer 3

Recommendation for R1 section: calculate GP and GP% by source and by territory to allow deeper analysis

Question 4

When asked to perform a catalogue valuation, it (appears always) sensible to perform a ____ ______

Answer 4

When asked to perform a catalogue valuation, it (appears always) sensible to perform a sensitivity analysis

Question 5

If a competitor approaches Jubal with an offer to sell them a catalogue, this puts Jubal in a _______ bargaining position

Answer 5

If a competitor approaches Jubal with an offer to sell them a catalogue, this puts Jubal in a stronger bargaining position

Question 6

A lack of payment terms/timing in a catalogue sale contact is a setback for Jubal, since…?

Answer 6

A lack of payment terms/timing in a catalogue sale contact is a setback for Jubal, since Jubal needs to be able to evaluate cashflow impact

Question 7

Jubal normally looks ___ years into the future as an appropriate horizon for catalogue valuations

Answer 7

Jubal normally looks 7 years into the future as an appropriate horizon for catalogue valuations

Question 8

In drawing conclusions for a catalogue valuation, it is important to note that that valuation is only a _______ point, and the____ figure will emerge from ___________

Answer 8

In drawing conclusions for a catalogue valuation, it is important to note that that valuation is only a starting point, and the final figure will emerge from negotiation

Question 9

An issue with the income method of valuation is that it’s difficult to ______ so many years into the future.

Answer 9

An issue with the income method of valuation is that it’s difficult to extrapolate so many years into the future.

Question 10

In evaluating assumptions of a catalogue sale, it is pertinent to raise the issue of _____ ______ which may have been omitted.

Answer 10

In evaluating assumptions of a catalogue sale, it is pertinent to raise the issue of other costs which may have been omitted.

Question 11

Income multiples should be ________ confirmed, and ideally not used based on press articles

Answer 11

Income multiples should be independently confirmed, and ideally not used based on press articles

Question 12

In making an offer for a catalogue, it is important to:

Do further _______ _____ to back up predicted figures

Answer 12

In making an offer for a catalogue, it is important to:

Do further market research to back up predicted figures

Question 13

In making an offer for a catalogue, it is important to:

Perform ____ ______ on both the catalogued artist and seller

Answer 13

In making an offer for a catalogue, it is important to:

Perform due diligence on both the catalogued artist and seller

Question 14

In making an offer for a catalogue, it is important to:

Obtain _____ advice on contract terms

Answer 14

In making an offer for a catalogue, it is important to:

Obtain legal advice on contract terms

Question 15

In making an offer for a catalogue, it is important to:

Perform a ______ model on the different variables included

Answer 15

In making an offer for a catalogue, it is important to:

Perform a cashflow model on the different variables included

Question 16

If royalties fall at a lower rate than revenue, this could indicate that…?

Answer 16

If royalties fall at a lower rate than revenue, this could indicate that writers are negotiating higher rates.

Question 17

Major A&R investment should result in increased _______ revenue.

Answer 17

Major A&R investment should result in increased sync revenue.

Question 18

GP% has been relatively _____ in the years to 2023

Answer 18

GP% has been relatively constant in the years to 2023

Question 19

Industry growth to 2023 is relatively steady (Ex2/Ex15), driven by ________

Answer 19

Industry growth to 2023 is relatively steady (Ex2/Ex15), driven by streaming.

Question 20

The ______ industry is not growing.

Answer 20

The physical industry is not growing.

Question 21

Jubal is operating in a _______ market (Ex2)

Answer 21

Jubal is operating in a competitive market.

Question 22

Jubal’s 2023 revenue was the “______ annual growth for many years” (Ex4)

Answer 22

Jubal’s 2023 revenue was the “highest annual growth for many years” (Ex4)

Question 23

Valuations are prepared in expectation of _______

Answer 23

Valuations are prepared in expectation of negotiation

Question 24

Selling of a catalogue recommendations: 1) Seek further ____ about forecasts. 2) Evaluate artist in context of _____ _____ catalogue sales. 3) Investigate demand for the artist. 4) Manage ______ with artist appropriately

Answer 24

Selling of a catalogue recommendations: 1) Seek further information about forecasts. 2) Evaluate artist in context of other potential catalogue sales. 3) Investigate demand for the artist. 4) Manage relationship with artist appropriately

Question 25

Sale of a catalogue can free up funds and ____

Answer 25

Sale of a catalogue can free up funds and time

Question 26

Jubal needs to 'keep up to date with all the _____ trends"

Answer 26

Jubal needs to 'keep up to date with all the latest trends"

Question 27

The music industry is 'heavily influenced by _______' (Ex9)

Answer 27

The music industry is 'heavily influenced by technology' (Ex9)

Question 28

How is average running cost per song calculated?

Answer 28

Total cost of sales plus admin expenses, less depreciation, less amortisation and impairment. Divide this figure by number of songs.

Question 29

The minimum EBITDA acceptable margin is ____%

Answer 29

The minimum EBITDA acceptable margin is 25%

Question 30

When mentioning the 3% industry revenue growth anticipated (from p.9), what should you also include from p.17?

Answer 30

Jubal PY revenue growth of 28.8%

Question 31

P.9 of AI, useful for generally identifying business issues and wider context: 1) Industry has recovered from _______. 2) _____ is popular. 3) There is a threat of _______.

Answer 31

P.9 of AI, useful for generally identifying business issues and wider context: 1) Industry has recovered from decline. 2) Streaming is popular. 3) There is a threat of competition.

Question 32

For evaluating KPIs in R1 (R1.SPS.3), it is important to write what 3 things per point?

Answer 32

1) Changes from prior year to current year. 2) Compare this to target and include adjective for difference. 3) Include risks/end of year impact.

Question 33

Explain how year-end accounting entries works for revenue.

Answer 33

1) Jubal initially records estimates as it does not have finalised information AND no cash changes hands. 2) Accrued income is debited and accrued royalties payable is credited, as cannot have a cash entry. 3) Update needed when final information received AND this sets up right balances ready for cash receipt.

Question 34

New writers acquired in the year tends to be correlated with what cost?

Answer 34

Higher A&R costs.

Question 35

Even though Yongo can be used as a comparative for valuation purposes...?

Answer 35

Even though Yongo can be used as a comparative for valuation purposes, it may not be appropriate as they are a different artist in a different period.

Question 36

Potential issue with large, rounded numbers in estimated costs for a contract?

Answer 36

Round sum estimates may lack validity (rougher estimate)

Question 37

Risk register adjustment: 1) Including more risks could make the Risk register more _______ 2) What is a perk of removing all risks and starting again? 3) What in the advanced information makes the inclusion of the risk of AI a possible strong suggestion? 4) What would be the perk of making management accounts compliant with IFRS for loan purposes?

Answer 37

Risk register adjustment: 1) Including more risks could make the Risk register more comprehensive. 2) Ensures the register is fully up to date. 3) The letter to the board. 4) Gives greater comfort to bank.

Question 38

How often is the risk register reviewed by the board?

Answer 38

Twice a year

Question 39

Advances can be a ____ risk for Jubal (p.8)

Answer 39

Advances can be a major risk for Jubal (p.8)