ICAP Strategic Case Study common mistakes
ICAP Strategic Case Study · Understand the traps and how to avoid them.
Asked to analyse the business environment, the candidate writes a generic PESTEL or five-forces list with statements like 'inflation is high', 'competition is intense' or 'technology is changing fast' - no case figures, no named competitors, no consequence for the decision being made.
Framework headings are easy to recall and feel like guaranteed coverage; under time pressure candidates reproduce rehearsed model structures instead of mining the case exhibits for specific facts.
What to do instead
Apply a two-part test to every external point before writing: (a) which case exhibit or figure supports it, and (b) what it changes about the recommendation. Keep only the three or four forces that pass and quantify them, e.g. 'a 200bp rise in the policy rate adds roughly Rs 60m of annual interest to the proposed Rs 3bn Sukuk and cuts EPS by about 8%'. Delete the rest.
Asked to 'evaluate' three strategic options, the candidate writes a balanced list of advantages and disadvantages for each and then stops - no ranking, no chosen option, no conditions attached to the choice.
Candidates are trained to 'discuss both sides' and fear that committing to one option will lose marks if the marker prefers another; the command verb 'evaluate' gets read as 'describe'.
What to do instead
State decision criteria up front (NPV, payback, strategic fit, capability, risk), score each option against them in a short table, and open and close the answer with the decision: 'Proceed with Option B subject to X and Y; reject A and C because ...'. Name the trade-offs explicitly and state which change in circumstances would reverse the recommendation.
Explains a transaction - a sale-and-leaseback, a government grant, an impairment trigger, a related-party loan - in commercial prose without naming the applicable IFRS or IAS, without stating recognition and measurement, and without quantifying the effect on profit, EPS, gearing or loan covenants.
Financial reporting is treated as background commentary rather than a set of rules that generate numbers; candidates write what they understand commercially rather than what the standard requires.
What to do instead
Use a fixed four-line template for every transaction: standard and treatment, journal effect, quantified impact on profit/NAV/EPS and any covenant headroom, and required disclosures. Use the case's own figures even where approximate and flag the assumption explicitly.
Makes mechanical appraisal errors: mixes Rs '000 with Rs million, fails to annualise a nine-month trading period, discounts nominal cash flows at a real rate, uses profit before tax as operating cash flow, and leaves working capital, capex or terminal value out of the NPV.
Under time pressure candidates reach for a memorised formula and skip the proforma and unit discipline; the case deliberately supplies data in inconsistent formats and periods.
What to do instead
Always build the free cash flow proforma (EBIT x (1 - t) + depreciation - increase in working capital - capex) with units written into the column heading, convert every case figure to one unit before starting, include a terminal value justification, and sanity-check the answer against the size of the investment. Show workings, not just the final number.
Accepts management's growth, margin and cost-saving assumptions at face value and produces a single point estimate - no challenge to the forecast, no sensitivity analysis, no break-even, no downside scenario.
Numbers look authoritative once they sit in a table, and candidates want to reach the recommendation; sensitivity feels like extra work rather than the core of the analysis.
What to do instead
List every material assumption, challenge the ones that drive the answer ('25% revenue growth is double the four-year historical average and above industry growth'), and present a sensitivity or break-even table, e.g. 'the NPV turns negative if gross margin falls below 22% or volume comes in 15% below plan'.
Produces a risk list of fifteen to twenty items lifted from the case narrative with no likelihood or impact rating, no existing controls, no residual risk and no named owner - every risk treated as equally important.
Listing is fast and feels comprehensive, candidates confuse identification with analysis, and they are reluctant to discard facts the case has supplied.
What to do instead
Cut to the six to eight risks that could actually change the decision. For each, quantify the impact where possible, identify the existing control and its weakness, rate inherent and residual risk, name an owner, and give one specific mitigating action with a timing.
Ignores the tax consequences of the proposed transaction: no tax on the gain on disposal, no depreciation or initial allowance effect, no minimum tax or withholding on a cross-border payment, no thin-capitalisation or group-relief angle, no deferred tax - even where the case states the tax rate.
Tax is treated as a separate exam rather than part of the commercial decision, and candidates lack confidence in the detail so they default to silence rather than stating an assumption.
What to do instead
Run a fixed checklist for every transaction - income tax and allowances, gains on disposal, withholding, sales tax, minimum tax, group relief, deferred tax, compliance deadlines - and convert the result to an after-tax figure. Where a rule is genuinely uncertain, state the assumption and its sensitivity instead of omitting the point.
Reads a related-party transaction, a director pressing for a favourable accounting treatment, or an audit firm being offered a lucrative consulting contract as purely a commercial or technical matter, never raising the ethical or governance dimension.
Candidates compartmentalise ethics into a standalone exam question and, inside a commercial case, adopt the client's framing; the trigger is buried in narrative rather than labelled as a dilemma.
What to do instead
Scan the case specifically for ethical and governance triggers before writing (related parties, pressure on reported numbers, conflicts of interest, gifts, confidentiality, whistleblowing, board composition and independence). For each, apply threats-and-safeguards, state the professional obligation and the escalation route, say what you would refuse to do, and record the matter.
Spends seventy minutes on the first, most familiar requirement and fifteen minutes on a 25-mark requirement, which ends up answered in rough notes or not at all.
The case is read and answered in the order it is printed, the first requirement feels like the main question, and no plan is made before writing starts.
What to do instead
In the first twenty minutes build a requirement table - command verb, marks, time budget at roughly 1.5 to 1.8 minutes per mark, the two or three case facts that answer it, and the format required - then answer in descending order of marks, not the order of the case. Keep a visible clock and stop when the budget is spent.
Delivers an unstructured essay with no headings, no executive summary, no appendix for workings, and a casual tone, when the requirement asked for a report to the board or a briefing note to the CEO.
Candidates write whatever comes to mind in answer order; format and audience are seen as cosmetic rather than as scored professional skills.
What to do instead
Note the specified audience and format before writing and use the standard skeleton: executive summary, one headed section per requirement, a clear recommendation, and appendices for workings. Match the register to the named reader - decision-focused and concise for a board, technically precise for a CFO - and sign off appropriately.