Subject: STRATEGIC CASE STUDY

Search 500 + past questions and counting.
  • Filter by Professional Bodies

  • Filter by Subject

  • Filter by Series

  • Filter by Topics

  • Filter by Levels

SCS – Mar2025 – L3 – Q4 – Financial Management

AML evaluates money market and forward contract hedges to mitigate USD/GHS exchange rate risk on USD 10M gold export revenue, with calculations and internal hedging strategies.

Akosa Minerals Limited (AML) exports a significant portion of its gold production, making its revenue highly sensitive to global gold prices and exchange rate fluctuations. Recently, gold prices have surged to a six-month high of USD 2,904.4 per troy ounce, creating an opportunity for AML to maximize export earnings. However, the company also faces foreign exchange risk, as the Ghanaian cedi (GHS) may depreciate before AML receives its USD payments.
To mitigate this risk, AML’s finance team is considering two hedging strategies: money market hedge and forward contracts. The company must determine which approach provides the best protection against exchange rate fluctuations while optimising its financial position.
AML expects to receive USD 10 million from gold exports in three months. The company is concerned that the USD/GHS exchange rate may depreciate and is evaluating both a money market hedge and a forward contract. The following information is available:

  • Current spot exchange rate: 1 USD = 12.50 GHS
  • Three-month forward rate: 1 USD = 12.20 GHS
    Three-month interest rates:
  • USD borrowing rate: 4% per annum
  • USD deposit rate: 3% per annum
  • GHS borrowing rate: 23% per annum
  • GHS deposit rate: 18% per annum

Required:
a) Explain the concept of both the money market hedge and forward contract hedge, and how AML can use each to mitigate its exchange rate risk.
(6 marks)
b) Calculate the amount AML needs to borrow or invest today in both USD and GHS under the money market hedge to fully hedge the future receipt of USD 10 million.
(4 marks)
c) Calculate the GHS amount AML would receive if it chooses the forward contract hedge instead.
(2 marks)
d) Compare the GHS amounts received under the money market hedge and forward contract hedge. Recommend the better option for AML based on the calculations.
(2 marks)
e) Discuss THREE internal hedging techniques AML can employ to mitigate the depreciation of the Ghana Cedi against the US Dollar.
(6 marks)

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "SCS – Mar2025 – L3 – Q4 – Financial Management"

SCS – Mar 2025 – L3 – Q3 – Competitive advantage, International financial

Analyze AML's employee management using IR Framework and evaluate the appropriateness of its diversification strategy into lithium mining.

a) Akosa Minerals Limited (AML) operates in both local and international mining markets, with operations spread across different regions, including Ghana, Mali and Burkina Faso. AML faces pressures for local adaptiveness, such as meeting the specific needs of employees in diverse communities, and global integration, which requires maintaining consistent HR policies and performance standards across all operations. The IntegrationResponsiveness (IR) Framework helps organisations determine how to balance these competing pressures to achieve strategic objectives.

Required:

i) Explain the Integration-Responsiveness (IR) Framework, and show how AML can manage its employees across various locations by balancing the pressures for local adaptiveness and global integration. (6 marks)

ii) Suggest TWO situations where AML should emphasise local adaptiveness and TWO where it should prioritise global integration. Provide examples to support your response. (4 marks)

b) AML diversified its operations by integrating lithium extraction into its core business. Diversification is appropriate in some situations but not in others.

Required: Explain FIVE reasons why the diversification strategy of AML is appropriate and THREE factors that could make the diversification strategy inappropriate. (10 marks)

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "SCS – Mar 2025 – L3 – Q3 – Competitive advantage, International financial"

SCS – Mar 2025 – L3 – Q2 – Change Management

Explain leadership's role in change management and three of Kanter's skills for AML's diversification strategy.

a) Akosa Minerals Limited (AML) has undergone significant transformations in its operations, particularly with the integration of lithium extraction into its core business. This shift has presented both opportunities and challenges, including regulatory compliance, technological advancements and stakeholder management. Successfully navigating these changes requires effective leadership and change management.

Rosabeth Moss Kanter suggests that managers in change-adept organisations must possess key skills to drive transformation effectively. As AML continues its diversification efforts, the company’s leadership must demonstrate these skills to sustain growth and maintain a competitive edge.

Required:

Identify and explain the critical role of leadership in managing change and THREE out of five key change management skills suggested by Kanter that AML’s leadership should exhibit to effectively manage its diversification and growth strategies.

b) Akosa Minerals Limited (AML) recently engaged a risk consultant from Isodek Consultants to conduct a comprehensive risk assessment and provide recommendations on managing the transformational changes the company is undergoing. The consultant’s report highlights key risks and challenges related to AML’s diversification strategy, operational restructuring, stakeholder engagement and compliance with global sustainability standards.

To navigate these challenges effectively, AML’s leadership needs to apply the Gemini Consultants’ 4Rs model which provides a structured framework for managing large-scale organisational change.

Required:

Using the Gemini Consultants’ 4Rs model, discuss how each component can be applied to address the operational and environmental risks identified in the consultant’s report.

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "SCS – Mar 2025 – L3 – Q2 – Change Management"

SCS – Mar 2025 – L3 – Q1 – Employee Satisfaction

Identify two key concerns from AML's employee satisfaction survey and their impact on competitive advantage.

a) Akosa Minerals Limited (AML) recently conducted an employee satisfaction survey to address ongoing challenges in attracting and retaining skilled labour. The survey evaluated staff experiences across five critical areas: conditions of service, career development, performance support, work environment and work satisfaction. The survey revealed key issues related to job security, career progression and employee welfare. AML’s leadership is now focused on implementing strategic measures to enhance employee satisfaction and engagement to reduce turnover risks and improve productivity. Required: Identify and explain TWO key areas of concern from the employee satisfaction survey. How might these concerns impact AML’s ability to maintain a sustainable competitive advantage?

b) AML has expanded its operations beyond Ghana, securing mining concessions in Mali and Burkina Faso. The company’s international growth has been driven by rising global demand for gold and lithium, particularly for use in battery production and renewable energy technologies. However, AML must navigate various external factors such as economic fluctuations, trade policies, global commodity pricing, and regulatory frameworks in different countries. To maintain its competitive advantage, AML’s leadership must evaluate external business conditions using tools such as Porter’s Diamond Model, which assesses factors influencing national competitiveness, and broader international economic analysis to identify key opportunities and threats. Required: Using Porter’s Diamond Model, analyse THREE factors that contribute to Ghana’s competitiveness in the global mining industry. How can AML leverage these factors for long-term success?

c) AML has evolved through various strategic phases over the last decades, including modernization, diversification and international expansion. The company is evolving and strengthening its governance, financial structure and operational processes. As AML continues to grow in a competitive mining industry, selecting an appropriate strategic approach is crucial for sustaining long-term success. The board of AML must consider different organisational strategy approaches to align with its corporate objectives, resource capabilities and industry trends. These approaches include the systems-based approach, resource-based approach, core competencies approach, rational strategy and adaptive/emergent strategy. Required: Using AML’s strategic journey as a reference, explain each of the FIVE strategic approaches and how they are relevant to AML’s organisational strategy.

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "SCS – Mar 2025 – L3 – Q1 – Employee Satisfaction"

SCS – Nov 2024 – L3 – Q1a – Charles Handy’s Cultural Types

Discuss the application of Charles Handy's cultural types to BOGML's growth phases and analyze their impact.

Charles Handy identified four distinct categories of corporate culture (cultural stereotypes) that can exist within an organization. Since its formation, BOGML has exhibited all four categories of corporate culture during different phases of its growth.

Required:
Identify and explain the specific and appropriate category of corporate culture applicable, and discuss its impact on the company for each of the following phases of growth when Dr. Ayimadu Baffour:

i) Created the functional departments.
ii) Stated that BOGML is built around him and without him the company will not exist.
iii) Insisted on retaining all authority for decision-making.
iv) Emphasized getting work done through teamwork.

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "SCS – Nov 2024 – L3 – Q1a – Charles Handy’s Cultural Types"

AAA – Nov 2011 – L3 – SB – Q1 – Application of Audit and Assurance Principles

Evaluate the steps for identifying and responding to fraud risk during audit planning.

Fela Idaewor is the auditor for Matty Co. Ltd, a rapidly expanding retail business based in Lekki. This is her first year as the audit manager. During her engagement planning, she observed multiple risk factors, such as the company’s strong interest in maintaining earnings and share prices, unrealistic financial forecasts, and high reliance on debt financing for expansion. Additionally, there were strong indications that fraud might have been committed by top management.

Required
(a) What should Idaewor do about the possibility of fraud at the planning stage? (7 Marks)
(b) What documentation is required for identifying risk factors? (5 Marks)
(c) If Idaewor has evidence suggesting fraud, what are her communication responsibilities to management? (3 Marks)

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "AAA – Nov 2011 – L3 – SB – Q1 – Application of Audit and Assurance Principles"

SCS – Nov 2019 – L3 – Q2d – Ethics and social responsibility

Discuss the ethical operations of Ghanalux and recommend internal controls to enhance customer safety and service.

i) Discuss whether the company is operating in an ethical manner.
(5 marks)

ii) Recommend internal controls that might be implemented by the company to improve customer safety and security, and to deal with the problems of poor service to customers.
(7 marks)

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "SCS – Nov 2019 – L3 – Q2d – Ethics and social responsibility"

SCS – Nov 2019 – L3 – Q2c – Controlling risk

Recommend governance and organizational changes for Ghanalux to improve its performance.

i) In response to the views of the company directors, and giving your reasons, recommend any changes to the governance and organization of Ghanalux that would benefit the performance of the company.
(8 marks)

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "SCS – Nov 2019 – L3 – Q2c – Controlling risk"

SCS – Nov 2019 – L3 – Q2b – Capital structure

Discuss the potential benefits and problems of converting short-term borrowing into long-term loans.

i) Discuss the potential benefits and problems with proposals to convert the company’s short-term borrowings into a longer-term loan.

ii) Pay bigger cash salaries, or add a share option element to the remuneration packages.

iii) Maintain the dividend for 2019 at the 2018 level, or even reduce it further.

iv) Convert any surplus dollar cash into cedis.

(10 marks)

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "SCS – Nov 2019 – L3 – Q2b – Capital structure"

SCS – Nov 2019 – L3 – Q2a – Financial management

Analyze the financial performance of Ghanalux in 2018 and its effect on the bank overdraft.

i) Analyze the financial performance of Ghanalux in 2018 to determine the extent to which the continuing large bank overdraft is attributable to profitability issues, cash flow management issues, or a combination of both.

ii) Prepare a forecasted cash flow statement for Ghanalux in 2019 to determine the likely bank balance or bank overdraft at the end of 2019. Assume the financial relationships and ratios are largely maintained from 2018 to 2019.

iii) iii) Recommend measures to improve the cash flow of the company.

(20 marks)

 

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "SCS – Nov 2019 – L3 – Q2a – Financial management"

SCS – Nov 2019 – L3 – Q1d – Controlling risk

Recommend internal controls to improve customer safety and service at Ghanalux.

Recommend internal controls that might be implemented by the company to improve customer safety and security, and to deal with the problems of poor service to customers.
(7 marks)

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "SCS – Nov 2019 – L3 – Q1d – Controlling risk"

SCS – Nov 2019 – L3 – Q1c – Methods of development

iscuss the strategic alliance proposal between Ghanalux and Sunlit Hotels.

i) Discuss the issues that should be considered when responding to proposals for a strategic alliance between Ghanalux and Sunlit Hotels.
(7 marks)

ii) Discuss the issues that should be considered when responding to proposals for a business combination with the tour company in Kumasi.
(7 marks)

 

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "SCS – Nov 2019 – L3 – Q1c – Methods of development"

SCS – Nov 2019 – L3 – Q1b – Competitive Advantage

Discuss the competitive advantage of Ghanalux in the tourism industry.

i) Discuss what you consider to be the main competitive advantage of Ghanalux in its industry.
(5 marks)

ii) Discuss how a balanced scorecard approach to performance measurement might help Ghanalux to improve its profitability.
(3 marks)

iii) Recommend performance measures that might be used by Ghanalux if it adopts a balanced scorecard system.
(8 marks)

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "SCS – Nov 2019 – L3 – Q1b – Competitive Advantage"

: SCS – Nov 2019 – L3 – Q1a – Environment analysis

Analyze the competitive disadvantage of Ghana’s tourism industry using Porter’s Diamond model.

i) Discuss the view that the tourism industry in Ghana might currently be at a disadvantage and under-developed compared to other countries.
Note: Use Porter’s Diamond to structure your answer.
(8 marks)

ii) Assess the two suggestions about expanding the business of Ghanalux outside Ghana and into conferencing, from the perspective that strategy should be suitable, feasible, and acceptable.
(6 marks)

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for ": SCS – Nov 2019 – L3 – Q1a – Environment analysis"

SCS – MAR 2024 – L3 – Q6c – Strategy, stakeholders, and mission

Describe and explain the four broad roles of NEDs identified in the Higgs Guidance (2003).

Prestige’s Board acknowledges that by adopting and implementing the highest standards of
corporate governance, this sets the standards and values for the entire Company. The
Company seeks to comply with best practice in all areas of corporate governance and
continues to review the Company’s procedures to maintain proper control and
accountability.
Required

There are nine members on Prestige’s Board of Directors. They include the Chairman, Chief Executive, three executive directors, and four non-executive directors (NEDs). Describe and explain four broad roles for NEDs identified in the document published in the UK in 2003, known as the Higgs Guidance.

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "SCS – MAR 2024 – L3 – Q6c – Strategy, stakeholders, and mission"

SCS – MAR 2024 – L3 – Q6b – Strategy, stakeholders, and mission

Explain how Principles V and VI of the OECD Principles of Corporate Governance could be applied at Prestige.

Prestige’s Board acknowledges that by adopting and implementing the highest standards of
corporate governance, this sets the standards and values for the entire Company. The
Company seeks to comply with best practice in all areas of corporate governance and
continues to review the Company’s procedures to maintain proper control and
accountability.
Required

Describe and explain how Principles V and VI of the OECD Principles of Corporate Governance – 2015 Edition, could be applied at Prestige to ensure good corporate governance practices.

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "SCS – MAR 2024 – L3 – Q6b – Strategy, stakeholders, and mission"

SCS – MAR 2024 – L3 – Q6a – Strategy, stakeholders, and mission

Describe and explain 5 key issues in corporate governance for Prestige.

Prestige’s Board acknowledges that by adopting and implementing the highest standards of corporate governance, this sets the standards and values for the entire Company. The Company seeks to comply with best practices in all areas of corporate governance and continues to review its procedures to maintain proper control and accountability.

Required:
Describe and explain five key issues in corporate governance that would establish how well or badly Prestige is governed.

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "SCS – MAR 2024 – L3 – Q6a – Strategy, stakeholders, and mission"

SCS – MAR 2024 – L3 – Q5c – International financial management

Evaluate the factors restricting foreign investment despite potential good returns.

With reference to Option Three, evaluate the factors that restrict foreign investment despite the perceived potential for good returns. 

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "SCS – MAR 2024 – L3 – Q5c – International financial management"

SCS – Nov 2020 – L3 – Q8 – Financial management

Calculate operating and financial gearing for GGOH and assess how these ratios impact investor decisions.

Assume a 10% interest on the outstanding loan and 22% Corporate Tax.

Required:
i) Calculate the operating gearing and financial gearing for GGOH. (5 marks)

ii) Assess how these ratios could impact an investor’s decision to invest in GGOH. (5 marks)

Login or create a free account to see answers

Find Related Questions by Tags, levels, etc.

Report an error

You're reporting an error for "SCS – Nov 2020 – L3 – Q8 – Financial management"

Oops!

This feature is only available in selected plans.

Click on the login button below to login if you’re already subscribed to a plan or click on the upgrade button below to upgrade your current plan.

If you’re not subscribed to a plan, click on the button below to choose a plan