Faculty of Design, Media & Management Assignment Brief Module Title:Financial Decision MakingModule Code:BM414Assignment No/Title: AssignmentAssessment Weighting:100%Submission Date:Week 15: 14/05/2019Feedback Target Date:3 weeksSubmission Instructions:This assignment is to be submitted electronically using Blackboard This assignment must be submitted electronically by 2pm on the submission date To submit electronically you must upload your work to the e-submission … Continue reading “Financial Decision Making | My Assignment Tutor”
Faculty of Design, Media & Management Assignment Brief Module Title:Financial Decision MakingModule Code:BM414Assignment No/Title: AssignmentAssessment Weighting:100%Submission Date:Week 15: 14/05/2019Feedback Target Date:3 weeksSubmission Instructions:This assignment is to be submitted electronically using Blackboard This assignment must be submitted electronically by 2pm on the submission date To submit electronically you must upload your work to the e-submission area within the Blackboard module concerned. Click Submit> Browse (find the correct file to upload) Upload> Submit You can resubmit your work as many times as you like until the deadline. If you choose to resubmit, your earlier submission will be replaced, and you will NOT receive an Originality Report until 24 hours from when the submission was made. You will receive a digital receipt as proof of submission. This will be sent to your Bucks e-mail address; please keep this for reference. You are reminded of the University’s regulations on cheating and plagiarism. In submitting your assignment, you are acknowledging that you have read and understood these regulations. You are reminded that it is your responsibility to keep an electronic copy of your assignment for future reference. Instructions to Students: Specify whether it is a group or individual assignment, the word length and any abnormal submission instructions. An individual written assignment of 3,000 words maximum is expected. Use the formal report format and include a Bibliography/ reference list of all books, journals and websites consulted in your research. Assume that the financial analysis is aimed at potential investors who are currently considering investing in Camden Limited. The financial performance evaluation will enable the potential investors decide whether to invest in this company. This assignment tests the following Learning Outcomes for the module:Delete any that do not apply and ensure that alternative instructions are entered in the box above. 1. Explain the structure of and terms used within the financial statements 2. Apply management accounting techniques for planning, control and decision making within the organisation 3. Calculate the main accounting ratios and explain their significance to users of financial statement 4. Demonstrate knowledge of the role of finance and accounting within the organisation with respect to both reporting and decision making aspects The Assignment Task: Please note; SKANSKA PLC is a manufacturing company based in UK. SKANSKA PLC started back in 1954. The company is planning to expand its operations to other parts of UK in the next ten (10) years. The financial statements are attached for your consideration. You are advised to incorporate the suggested amendments/feedback you received from the module leader during assignment briefing. The layout of the assignment should be as follows: Cover pageTable of contentsMain body (where you are answering the questions asked in 2 tasks)Conclusion (where you will be providing recommendations on whether Camden Limited should go ahead with granting loan to SKANSKA PLC or not along with justification of the same. The answer will be based on your calculation and analysis of the ratios done in task 2 of the assignment)References (Minimum of 10, with at least 5 books Required Task 1 Accounting and Finance functions are paramount to any organisation. Critically evaluate the role of accounting and finance within any organisation of your choice (i.e. related to your academic discipline/program). Your evaluation must include some examples within the organisation where appropriate. To answer this question, you need to choose a company of your choice and provide some information about the company you have chosen and explain the importance of finance and accounting function in the company you have chosen Introduction: When was the company started and where. What do they sell, what countries are they present in, No. of employees working for them, Their annual turnover figure and market share, A brief SWOT analysis of the company. Importance of Finance and Accounting department: Accounting department: . Financial accounting . Management accounting . Tax function. . Auditing function Finance department: . Investment function . Financing function . Dividend function . Working capital function You need to provide general explanations of all the eight points mentioned above and relate it to the company you have chosen. More details are provided on the handout provided in the class on “the accounting and finance function”. (40 marks) Task 2 Using the financial statements for SKANSKA PLC calculate the ratios required and comment on the company’s performance from a potential investors perspective. (50 marks) Marks will be awarded for Structure. Structure includes the orderly presentation of relevant material and the extent of research evidenced by the appropriateness and adequacy of in-text referencing and bibliography. There must be a Cover Page and Contents Page, paragraphs of Introduction, Conclusion and pages must be numbered. (10 marks) Assessment Criteria You will obtain marks for the following: Presentation of your work (report format, clarity of expression, referencing etc.) ……………….……………………….10% The role of accounting and finance within any organisation of your choice with appropriate examples……… 40% Ratio calculation……………………………………………………………………………………..………………………… 10% Interpretation and analysis of the performance………………………………………………………………………………..40% The summarised financial statements of SKANSKA PLC, is a limited liability company engaged in manufacturing, are shown below: Statement of profit or loss: For the year ended 31 Dec. 2017For the year ended 31 Dec. 2018 £000£000£000£000Sales revenue 2,400 3,000Cost of sales Opening inventory600 225 Purchases1,350 2,400 1,950 2,625 Less: Closing inventory (225)(1,725)(450)(2,250)Gross profit 675 750Operating expenses (300) (337.50)Finance cost (75) (150)Net profit 300 262.50 Statement of financial positionAs at year to 31 Dec. 2017As at year to 31 Dec. 2018 £000£000£000£000Non-current assets 1,477.50 3,000Current assets Inventory225 375 Receivables – trade450 600 Prepayments45 52.50 Cash37.50757.507.501,035 2,235 4,035Issued share capital 450 450Share premium account 150 150Retained earnings 562.50 825 1,162.50 1,425Non-current liabilities 10% loan notes 750 1,500Current liabilities Payables – trade285 1,050 Accruals37.50322.50601,110 2,235 4,035 Task 2 – Required Calculate the following five ratios for each of the two years: Return on capital employedNet profit marginCurrent ratioAverage Receivable days/ Debtors collection periodAverage Payable days/ Creditors collection period (10 marks) To answer this question, you need to calculated the five ratios mentioned in the question using the financial data provided in above two tables. The formulas for your assistance are mentioned above: RatioFormulaROCEOperating profit/Total assets-current liabilities *100Net profit marginNet profit/Sales*100Current RatioCurrent assets/current liabilitiesAverage receivable daysReceivables/Sales *365Average Payable daysPayables/Purchases * 365 Refer to your class notes for further clarifications on calculations Comment on the performance of SKANSKA PLC. results and position between the two years, mentioning possible causes and effects for the changes. (40 marks) For this task, you are providing analysis of what do the results of the ratios calculated above. You need to provide analysis of each five ratios separately. Return on capital employedDefinitionWhat does the ratio indicate about company’s performanceCompare 2017 figures with 2018 figures calculated above 2017: 19.60% 2018: 14.10% Explain what do these numbers means and how has the figure changed in 2018 as compared to 2017 Reasons behind the value of the ratio going down in 2018 as compared to 2017Ways to improve the value to the ratio in future Net profit margin DefinitionWhat does the ratio indicate about company’s performanceCompare 2017 figures with 2018 figures calculated above 2017: 12.50% 2018: 8.75% Explain what do these numbers means and how has the figure changed in 2018 as compared to 2017 Reasons behind the value of the ratio going down in 2018 as compared to 2017Ways to improve the value to the ratio in future Current ratio DefinitionWhat does the ratio indicate about company’s performanceCompare 2017 figures with 2018 figures calculated above 2017: 2.34:1 2018: 0.93:1 Explain what do these numbers means and how has the figure changed in 2018 as compared to 2017 Reasons behind the value of the ratio going down in 2018 as compared to 2017Ways to improve the value to the ratio in future Average Receivable days/ Debtors collection period DefinitionWhat does the ratio indicate about company’s performanceCompare 2017 figures with 2018 figures calculated above 2017: 68 days 2018: 73 days Explain what do these numbers means and how has the figure changed in 2018 as compared to 2017 Reasons behind the value of the ratio going down in 2018 as compared to 2017Ways to improve the value to the ratio in future Average Payable days/ Creditors collection period DefinitionWhat does the ratio indicate about company’s performanceCompare 2017 figures with 2018 figures calculated above 2017: 77 days 2018: 160 days Explain what do these numbers means and how has the figure changed in 2018 as compared to 2017 Reasons behind the value of the ratio going down in 2018 as compared to 2017Ways to improve the value to the ratio in future 05/03/21
