This question asked candidates to analyse and discuss the extent to which a company had achieved each of three objectives during a two-year period. Overall performance was somewhat variable in quality.

The first objective related to profit before interest and tax (PBIT) and most candidates were able to calculate PBIT growth in each of two years, and discuss the extent to which the objective had been achieved. Some answers gave only a geometric mean growth rate, when annual growth rates were needed to discuss the extent to which the annual objectives had been achieved.

The second objective related to earnings per share (EPS) and some candidates were not able to calculate EPS, so the success rate (in terms of marks gained) for this objective was lower than for the first objective. Answers that calculated EPS correctly were usually able to discuss the extent to which the objective had been achieved.

The third objective related to total shareholder return (TSR) and a significant number of candidates had difficulty in calculating this. The success rate for this objective was therefore lower than for the first two objectives. TSR is the actual return to an investor for buying a share at the start of the year, so it is the sum of the capital gain and dividend for the year, expressed as a percentage of the opening share price.

While dividend yield was therefore a useful figure to calculate, the dividend growth rate was not. Calculations could be made on a whole company or on a per share basis, as the number of shares in issue was constant over the two-year period. Answers that calculated TSR correctly were usually able to discuss the extent to which the objective had been achieved.