Association of Chartered Certified Accountants (ACCA) Strategic Business Leader (SBL) Flashcards

24 sample cards from the Strategic Business Leader (SBL) deck

Sampled from the end of the deck, so these are different cards from the ones shown on the syllabus page.

1. What is benchmarking and what are its main types?

   Benchmarking is comparing processes/performance against a reference point to identify improvement. Types: internal (between units), competitive (against direct rivals), functional/process (against best-in-class for a function in any industry), and strategic benchmarking.

2. How is Return on Capital Employed (ROCE) calculated and what does it measure?

   $$\text{ROCE} = \frac{\text{Operating profit (PBIT)}}{\text{Capital employed}} \times 100\%$$ where capital employed = total assets − current liabilities (or equity + non-current liabilities). It measures how efficiently capital generates operating profit.

3. Define the current ratio and the quick (acid-test) ratio.

   $$\text{Current ratio} = \frac{\text{Current assets}}{\text{Current liabilities}}$$ $$\text{Quick ratio} = \frac{\text{Current assets} - \text{Inventory}}{\text{Current liabilities}}$$ Both assess short-term liquidity; the quick ratio excludes less-liquid inventory.

4. What is gearing (leverage) and how is it commonly measured?

   Gearing measures the proportion of debt financing relative to equity, indicating financial risk. A common measure is $$\text{Gearing} = \frac{\text{Debt}}{\text{Equity}} \times 100\% \quad \text{or} \quad \frac{\text{Debt}}{\text{Debt} + \text{Equity}}.$$ Higher gearing means greater financial risk and interest obligations.

5. What is Net Present Value (NPV) and the decision rule for investment appraisal?

   NPV discounts future cash flows to present value: $$\text{NPV} = \sum_{t=0}^{n} \frac{C_t}{(1+r)^{t}}$$ where $C_t$ is the net cash flow in period $t$ and $r$ the discount rate. Decision rule: accept projects with a positive NPV; choose the highest NPV among mutually exclusive options.

6. What is the Internal Rate of Return (IRR)?

   The IRR is the discount rate $r$ at which a project's NPV equals zero, i.e. $$\sum_{t=0}^{n} \frac{C_t}{(1+r)^{t}} = 0.$$ A project is acceptable if its IRR exceeds the required rate of return (cost of capital).

7. What is a key limitation of payback period as a financial decision tool?

   Payback measures how long it takes to recover the initial investment but ignores the time value of money (unless discounted), ignores cash flows after the payback point, and does not measure overall profitability. It is best used as a simple risk/liquidity screen alongside NPV.

8. What are the typical stages of the project life cycle?

   Initiation (define the project, business case), planning (scope, schedule, budget, resources, risk), execution (delivering the work), monitoring and controlling (tracking progress against plan), and closure (handover, review, lessons learned).

9. What is the project management 'iron triangle' (triple constraint)?

   Time, cost and quality (scope), with scope often at the centre. The constraints are interdependent: changing one affects the others. The project manager must balance these to deliver the required output within agreed parameters.

10. What is a business case in project management and why is it important?

    A business case justifies undertaking a project by setting out the rationale, expected costs, benefits, risks and options. It supports the go/no-go decision and is revisited at gateways to confirm the project remains viable and worthwhile.

11. What is a Post-Completion (Post-Implementation) Review of a project?

    A review carried out after a project is finished to assess whether objectives, benefits, time and cost targets were met, and to capture lessons learned for future projects. It supports accountability and organisational learning, distinct from in-project monitoring.

12. What are the five fundamental principles of the ACCA/IESBA Code of Ethics?

    Integrity, Objectivity, Professional competence and due care, Confidentiality, and Professional behaviour. These principles govern the conduct of professional accountants and underpin public trust.

13. What categories of threats to the fundamental ethical principles does the IESBA Code identify?

    Self-interest, self-review, advocacy, familiarity and intimidation threats. Where threats are not at an acceptable level, safeguards must be applied to eliminate or reduce them; if they cannot, the engagement/relationship should be declined or ended.

14. Distinguish between an ethical absolutist (deontological) and an ethical relativist (consequentialist/teleological) stance.

    Absolutism/deontology holds that some actions are inherently right or wrong regardless of consequences (rules and duties matter). Relativism/consequentialism (e.g. utilitarianism) judges actions by their outcomes, so what is right depends on context and results.

15. What are Kohlberg's three levels of moral development?

    Pre-conventional (morality based on self-interest, reward and punishment), conventional (morality based on social approval and law/order), and post-conventional (morality based on universal ethical principles and self-chosen values). It explains how ethical reasoning matures.

16. What does Carroll's Corporate Social Responsibility (CSR) pyramid comprise?

    Four layers of responsibility, from the base upward: economic (be profitable), legal (obey the law), ethical (do what is right and fair) and philanthropic (be a good corporate citizen). Together they describe the full scope of an organisation's social responsibilities.

17. What are the ACCA professional skills assessed in the SBL exam?

    Communication, Commercial acumen, Analysis, Scepticism, and Evaluation. Marks are awarded for demonstrating these skills in applying technical knowledge to the scenario, not just for the technical content itself.

18. What does the professional skill of 'scepticism' require a candidate to demonstrate?

    Probing, questioning and challenging information, assumptions and the views/motives of others; not accepting evidence at face value; identifying inconsistencies, bias or missing information; and recognising the implications of unethical or questionable behaviour.

19. What does 'commercial acumen' mean as a professional skill?

    Demonstrating awareness of the wider business and organisational context, using judgement that recognises the practical and commercial realities of the scenario, identifying opportunities and risks, and making recommendations that are realistic and value-adding for the organisation.

20. What is the difference between data, information and knowledge in a business communication context?

    Data are raw, unprocessed facts and figures. Information is data processed and given context so it has meaning for a purpose. Knowledge is information combined with experience, judgement and understanding that enables effective action and decision making.

21. What qualities make management information effective (the ACCURATE attributes)?

    Accurate, Complete, Cost-effective, Understandable, Relevant, Adaptable/Accessible, Timely and Easy to use. Good information must be reliable and fit for the decision it supports, with benefits exceeding the cost of providing it.

22. What should be considered when choosing an appropriate medium and tone for a business communication?

    The audience and their needs/knowledge, the purpose (inform, persuade, instruct), the formality and confidentiality required, the complexity and urgency of the message, and the need for a record or feedback. The chosen format (report, email, presentation, briefing) and tone should match these.

23. What are the key elements of persuasion in French and Raven's bases of power?

    Legitimate (positional authority), reward, coercive, expert (knowledge/skill), and referent (personal charisma/respect) power. Influence and persuasion draw especially on expert and referent power, which tend to gain genuine commitment rather than mere compliance.

24. What is the difference between influencing through compliance and through commitment?

    Compliance is when people do what is asked because they must (driven by position, reward or coercive power), often yielding minimal effort. Commitment is when people genuinely agree and are motivated (driven by expert, referent power and persuasion), producing sustained, willing engagement and better outcomes.

What this deck covers

Strategic Business Leader (SBL) flashcards FAQ