PGBM 12 Accounting And Financial Management Assessment / October 2018 intake
Canvas & JIRA Deadline: Canvas & JIRA Deadline: Tuesday 29th January 2019 at 14.00
Learning outcomes
Outcomes Assessed: All
This assessment covers the following learning outcomes from the module.
Knowledge
K1. The critical understanding of financial data K2. The critical understanding of financial strategies in business K3. The understanding of financial statements published by companies K4. Knowledge of understanding the link between accounting & the capital markets Skills
S1. How to apply technical skills relating to practical aspects of accounting and financial management S2. How to apply analytical skills relating to the analysis of practical problems of financial management in an effective and logical manner.
Assessment
Assessment weight: 100% of the module
This assessment is in three parts, please answer all elements.
Part A
Bitmap plc is well established manufacturer of furniture in London. The board of directors have looked into the financial statements of the last two years and have noticed significant changes in different elements of Income statements and balance sheets. You are working in the same company as Management Accountant and directors have asked you to prepare a report on results of the two year’s financial statements. The financial statement of the Bitmap plc are given below:
Statement of comprehensive income for the year ended 2016 and 2017.
2017
2016
£000
£000
£000
£000
Revenue
23,000
18,000
Less: Cost of sales
Opening Inventory
1,800
1,700
Manufacturing cost
12,000
9,000
Total cost of goods available to sell
13,800
10,700
Less: Closing inventory
3,000
1,800
Total cost of sales
10,800
8,900
Gross profit
12,200
9,100
Less: Expenses
Selling & distribution expenses
4,000
3,000
Administrative expenses
1,400
1,000
5,400
4,000
Operating profit
6,800
5,100
Less: Interest payable
1,000
500
Profit before tax
5,800
4,600
Less: Income tax (30%)
1,740
1,380
Profit after tax
4,060
3,220
Less: Dividends paid
300
200
Retained profit for the year
3,760
3,020
Statement of financial position as at 31st of December 2016 and 2017.
2017
2016
£000
£000
£000
£000
Non-current assets (net)
Land and building
12,000
9,000
Equipment
1,400
1,250
Motor vehicles
1,800
1,100
15,200
11,350
Current assets
Inventory
2,360
1,800
Trade receivables
2,300
1,600
Cash
500
750
5,160
4,150
Current liabilities
Trade payables
1,100
1,500
Net current assets
4,060
2,650
19,260
14,000
Non-current liabilities
Loan stock
3,500
2,000
Net assets
15,760
12,000
Equity
Ordinary shares of £1 each
10,000
10,000
Retained earning
5,760
2,000
15,760
12,000
Required:
1. Prepare a structured report for Board of Bitmap plc, which evaluates the performance of the company in relation to profitability, liquidity, gearing, asset utilization and investors potential. You report must be supported by the calculations of relevant ratios in the five areas mentioned above. (25%)
2. Calculate working capital cycle in days for the Bitmap plc based on the information above, assuming 365 days, for the years 2017 and 2016, you are also required to evaluate results briefly. (5%)
All calculations should be clearly shown including all appropriate workings and should be made to the nearest £000 or two decimal places where required.
Total marks for Part A: (30)
Part B
Toyland ltd, is well established London based company which manufactures toys for children. The directors are expecting that demand of toys in future will increase significantly and with current capacity company will not be able to meet the demand. Therefore, directors have decided to purchase a new machine to enhance the capacity to benefit from the expected increase in demand. Two versions of machines are available from different manufacturers at the same cost of £500,000. Both machines have six years useful life and will be sold at estimated price of £50,000 at the end of sixth year. Toyland will use straight line method for depreciation of these machines. Cost of capital for both machines is 10%.
Directors are to purchase one machine from the available two, same cost and net cash inflow from both machines is confusing them to take decision. You are Finance Manager of Toyland ltd and directors have asked to produce a report which should make things clear for them to take decision. Further information regarding net cash inflow from both machines is provided bellow.
Machine A
Machine B
Years
Cash flow
Cash flow
0
– 500,000
– 500,000
1
300,000
20,000
2
250,000
50,000
3
200,000
150,000
4
150,000
200,000
5
50,000
250,000
6
20,000
300,000
Requirements:
Required:
1. Calculate using the following investment appraisal techniques, and provide recommendations as to the economic feasibility of acquiring the suitable machine:
a. The Payback Period.
b. The Discounted Payback Period.
c. The Accounting Rate of Return.
d. The Net Present Value.
e. The Internal Rate of Return (to two decimal places) (15%)
2. Critically evaluate the key benefits and limitations of each of the differing investment appraisal techniques, supporting the response with relevant academic research as to whether each of the differing techniques is applied in practice within a real- life business context. (20%)
3. You are also required to critical evaluate two suitable sources of finance to fund this investment. (15%)
All calculations should demonstrate the appropriate workings that are used to derive the solution, and should not be performed in Microsoft Excel.
Total marks for Part B – (50)
Part C: Budgeting:
Required:
1 Define a budget and demonstrate how budgets, strategic objectives, and strategic plans are related. (10%)
2 Critically evaluate the budgeting process and the interlinking of various budgets used within a business. (10%)
Total marks for Part C: (20)
Presentation
Please write your Tutor’s name clearly on the front of the assignment.
1. To obtain a high mark, you should:
a. Make your report concise, precise and well-presented and structured;
b. Draw logical conclusions from accounting information;
c. Synthesis information in a coherent and useful way;
d. Show evidence of key text and background reading;
e. Incorporate your knowledge into an integrated piece of work;
f. Demonstrate critical understanding of financial management
2. A Harvard standard referencing is required for the report
3,500 words overall. (+- 10%)
Assessment Regulations
Please note that this is an individual assignment and the policy of the University on “Policy on Cheating, Collusion and Plagiarism” applies. For further information regarding Assessment Regulations, extenuating circumstances or extensions and academic integrity, please refer to your Programme Handbook on the University of Sunderland in London information page on Canvas.
Reading List
Please access your reading list from the library website. To access it, please go to https://moduleresources.sunderland.ac.uk/ and search for your module.
Submission guidelines
There are currently two steps that you need to follow to ensure that you successfully submit your work for marking. Your submission links will become available approximately 3 weeks prior to your submission deadline, along with detailed instructions on how to submit your assignment, but in the meantime please feel free to also watch this Assignment Submission Instructions video.
Grading
You will be marked in accordance to the University of Sunderland assessment criteria attached below. The assessment criteria covers; Relevance, Knowledge, Analysis, Argument and Structure, Critical Evaluation, Presentation, Reference to Literature.
Assessment Criteria
Categories
Grade
Relevance
Knowledge
Analysis
Argument and Structure
Critical Evaluation
Presentation
Reference to Literature
Pass
86 – 100%
The work examined is exemplary and provides clear evidence of a complete grasp of the knowledge, understanding and skills appropriate to the Level of the qualification. There is also unequivocal evidence showing that all the learning outcomes and responsibilities appropriate to that Level are fully satisfied. At this level it is expected that the work will be exemplary in all the categories cited above. It will demonstrate a particularly compelling evaluation, originality, and elegance of argument, interpretation or discourse.
76-85%
The work examined is excellent and demonstrates comprehensive knowledge, understanding and skills appropriate to the Level of the qualification. There is also excellent evidence showing that all the learning outcomes and responsibilities appropriate to that level are fully satisfied. At this level it is expected that the work will be excellent in the majority of the categories cited above or by demonstrating particularly compelling evaluation and elegance of argument, interpretation or discourse and some evidence of originality
70 – 75%
The work examined is of a high standard and there is evidence of comprehensive knowledge, understanding and skills appropriate to the Level of the qualification. There is clearly articulated evidence demonstrating that all the learning outcomes and responsibilities appropriate to that level are satisfied At this level it is expected that the standard of the work will be high in the majority of the categories cited above or by demonstrating particularly compelling evaluation and elegance of argument, interpretation or discourse.
60 – 69%
Directly relevant to the requirements of the assessment
A substantial knowledge of relevant material, showing a clear grasp of themes, questions and issues therein
Comprehensive analysis – clear and orderly presentation
Well supported, focused argument which is clear and logically structured.
Contains distinctive or independent thinking; and begins to formulate an independent position in relation to theory and/or practice.
Well written, with standard spelling and grammar, in a readable style with acceptable format
Critical appraisal of up-to-date and/or appropriate literature. Recognition of different perspectives. Very good use of a wide range of sophisticated source material.
50 – 59%
Some attempt to address the requirements of the assessment: may drift away from this in less focused passages
Adequate knowledge of a fair range of relevant material, with intermittent evidence of an appreciation of its significance
Significant analytical treatment which has a clear purpose
Generally coherent and logically structured, using an appropriate mode of argument and/or theoretical mode(s)
May contain some distinctive or independent thinking; may begin to formulate an independent position in relation to theory and/or practice.
Competently written, with only minor lapses from standard grammar, with acceptable format
Uses a good variety of literature which includes recent texts and/or appropriate literature, including a substantive amount beyond library texts. Competent use of source material.
40 – 49%
Some correlation with the requirements of the assessment but there are instances of irrelevance
Basic understanding of the subject but addressing a limited range of material
Some analytical treatment, but may be prone to description, or to narrative, which lacks clear analytical purpose
Some attempt to construct a coherent argument, but may suffer loss of focus and consistency, with issues at stake stated only vaguely, or theoretical mode(s) couched in simplistic
Sound work which expresses a coherent position only in broad terms and in uncritical conformity to one or more standard views of the topic
A simple basic style but with significant deficiencies in expression or format that may pose obstacles for the reader
Evidence of use of appropriate literature which goes beyond that referred to by the tutor. Frequently only uses a single source to support a point.
terms
Fail
35 – 39%
Relevance to the requirements of the assessment may be very intermittent, and may be reduced to its vaguest and least challenging terms
A limited understanding of a narrow range of material
Largely descriptive or narrative, with little evidence of analysis
A basic argument is evident, but mainly supported by assertion and there may be a lack of clarity and coherence
Some evidence of a view starting to be formed but mainly derivative.
Numerous deficiencies in expression and presentation; the writer may achieve clarity (if at all) only by using a simplistic or repetitious style
Barely adequate use of literature. Over reliance on material provided by the tutor.
The evidence provided shows that the majority of the learning outcomes and responsibilities appropriate to that Level are satisfied – for compensation consideration
30 – 34%
The work examined provides insufficient evidence of the knowledge, understanding and skills appropriate to the Level of the qualification. The evidence provided shows that some of the learning outcomes and responsibilities appropriate to that Level are satisfied. The work will be weak in some of the indicators.
15-29%
The work examined is unacceptable and provides little evidence of the knowledge, understanding and skills appropriate to the Level of the qualification. The evidence shows that few of the learning outcomes and responsibilities appropriate to that Level are satisfied. The work will be weak in several of the indicators.
0-14%
The work examined is unacceptable and provides almost no evidence of the knowledge, understanding and skills appropriate to the Level of the qualification. The evidence fails to show that any of the learning outcomes and responsibilities appropriate to that Level are satisfied. The work will be weak in the majority or all of the indicators.
