Put your learning to work
Make a case, then test what changes it
Write your initial DailyCup memo before opening the new payment evidence. Retain both versions so your committee can see what changed and why.
1 Take a first view2 Work and test3 Record your judgement
Case briefing video coming soon
Apply The Investment Case
Read the full narration
You have now built the tools in The Investment Case. The next task is to apply them to the supplied fictional case. Start with the objective and constraints. Record your first decision and the evidence supporting it. Work the numbers using consistent definitions and units. Invite the strongest reasonable challenge. When new information arrives, keep your first record and explain what changes. Finish with a conditional conclusion: what you would do, why, what remains uncertain and what evidence would trigger a review. This is a teaching exercise with fictional information. The quality of your reasoning matters more than whether a simulated outcome later looks favourable.
DailyCup committee lab.
All case records, prices and forecasts below are fictional teaching material. First complete Stage A and save your memo. Only then open Stage B. This is a teacher/peer-reviewed exercise, not an adaptive or secure exam.
Stage A · initial record
| Input | Initial management summary / teaching assumption |
|---|---|
| Annual transactions | 100,000 |
| Average realised price assumed | £5 |
| Variable cost per transaction | £3 |
| Annual fixed costs | £150,000 including £10,000 depreciation |
| Optional operating tax / capex / Δ operating WC | 25% / £20,000 / £5,000 |
| Equity asking price / other claims | £300,000 / no debt, excess cash or other claims |
| Sustainable future annual cash range | £25,000–£40,000, after all necessary reinvestment |
| Value model | No growth perpetuity, required return 10%; conditional, not a probability range |
Decision
Who is deciding, at what price, for what purpose?
Evidence
What is verified, assumed or still unknown?
Mechanism
How does the business produce sustainable cash?
Opposing case
What credible alternative could change the view?
Value and risk
What assumptions drive the range and downside?
Action and review
What happens next, and what would change your mind?
Source cards · each has a specific use
- A: Management summary supplies the transaction and price assumptions above; it is not independently verified.
- B: A loyalty sample has 240 returns among 400 identifiable members within 30 days; it excludes non-members.
- C: A voluntary social poll has 12 complaints among 20 respondents; representativeness is unknown.
- D: Eight news items repeat the same company release; they are not eight independent datasets.
- E: A competitor interview says promotions are important but supplies no payment data.
- F: An AI summary repeats the £500,000 revenue calculation with an unverified citation.
Your initial memo · 150 words
State the proposed research action, price, value assumptions, strongest opposing explanation and two evidence gaps. Reproduce base profit £50,000 and optional FCFF £22,500. Save this before revealing the next card.
| Claim / definition | Source / date / scope | What it establishes | Limit / next check |
|---|---|---|---|
| Paid transactions / period | Record the original file or report | Separate count from unique customers | Reconcile refunds and exclusions |
| Repeat demand / cohort | Define who is tracked and for how long | Observed cohort frequency | Check promotions and selection |
| Sustainable cash / period | Accounts plus investment assumptions | Cash after stated needs | Check capex, tax and working capital |
Stage B · reveal the new payment evidence
Reconciled payment evidence identifies 20,000 transactions at £4.50 and 80,000 at £5, with the same supplied variable and fixed costs. It does not yet establish how long promotions persist.
Calculate revenue, operating profit and the optional cash bridge. Then test the explicitly conditional assumption that a £7,500 annual after-tax cash reduction persists across the initial forecast range with all other assumptions unchanged.
Control totals after your calculations
Revenue £490,000; contribution £190,000; operating profit £40,000. Optional FCFF £15,000. Initial cash bridge £22,500, so reduction £7,500. If persistent under the stated forecast assumptions, range £17,500–£32,500 cash /10%=£175,000–£325,000 value. Do not infer persistence from one period alone.
DailyCup · the revised investment case
Complete the practice-lab first memo before the new-information reveal. Then write a 300–450 word revised committee note at the fictional £300,000 equity asking price. Use the corrected payment data and clearly state which future effects are assumed.
- Separate the observation, calculation, forecast and judgement.
- Reconcile corrected revenue/profit and, if used, the cash bridge.
- Compare the initial and conditional revised value ranges with price; do not call them probabilities or annual returns.
- Present the strongest opposing explanation, a justified next action and two verification or review conditions.
Original classroom rubric · 15 marks
- Evidence and calculations (4 marks): Uses relevant sources, accurate arithmetic and explicit assumptions.
- Analysis and alternatives (4 marks): Explains causal mechanisms and treats the strongest contrary case fairly.
- Judgement and revision (4 marks): Weights the evidence, gives a conditional action and explains changes or retained views.
- Communication and process (3 marks): Clear dated record, priority unknowns and useful review conditions; no hindsight rewriting.
Indicative response after your own attempt
The payment card corrects revenue to £490,000 and operating profit to £40,000. Under the optional tax/reinvestment bridge, FCFF is £15,000 rather than £22,500. Only if the £7,500 annual cash reduction persists with other forecast assumptions unchanged does the earlier £250,000–£400,000 range become £175,000–£325,000. That narrows support for £300,000, while promotion duration and future economics remain uncertain. A defensible note may defer, negotiate, decline or continue specified diligence; it must explain why and retain the first memo.
This is an On Judgement practice rubric, not an official AQA mark scheme.