CA Business Strategy & Advisory 3

Question 1

A business advisor recommending a 'turnaround strategy' would most likely suggest:

Accepted Answer

Cost cutting, asset disposal, and refocusing on core operations

Answer

Turnaround strategies address declining performance through cost reduction, divestiture of non-core assets, and refocusing on profitable core activities.

Question 2

In scenario planning, the primary purpose is to:

Accepted Answer

Explore multiple plausible future environments to test strategy robustness

Answer

Scenario planning creates several distinct, internally consistent future environments to stress-test strategic options rather than predict one outcome.

Question 3

Which of the following best describes 'blue ocean strategy'?

Accepted Answer

Creating uncontested market space by making competition irrelevant

Answer

Blue ocean strategy focuses on value innovation to create new demand in uncontested market space rather than fighting over existing customers.

Question 4

A CA advising on a business combination notes the acquirer is paying significantly above book value. The excess of purchase price over fair value of net assets is recorded as:

Accepted Answer

Goodwill

Answer

Goodwill represents the premium paid above the fair value of identifiable net assets and reflects intangible factors like brand and customer relationships.

Question 5

The balanced scorecard's 'learning and growth' perspective primarily measures:

Accepted Answer

Employee capabilities, information systems, and organizational culture

Answer

The learning and growth perspective focuses on the human capital, technology, and culture that enable the organization to execute its strategy long-term.

(CA) Chartered Certified Accountant Practice Test

(CA) Chartered Certified Accountant Practice Test

CA Business Strategy & Advisory 3