Assignment Brief

Assignment Brief

 

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Module Title: FINANCIAL DECISION MAKING Module Code: BM414
Assignment No/Title:  ASSIGNMENT Assessment Weighting: 100%
Submission Date: 05th December 2020 Feedback

Target Date:

3 weeks
Module Co-ordinator/ Tutor:   Course Area FD
Submission Instructions:
This assignment is to be submitted electronically using VLE
 

 

 

 

 

Instructions to Students:
 

 

 

 

 

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:
 

 

 

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 Construction Company based in UK. SKANSKA PLC started back in 1887. The company is planning to expand its operations to other countries in Europe in the next ten (10) years. The financial statements of SKANSAPLC. are attached for your considerationand attention.

 

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:

 

1.     Cover page

2.    Executive summary

3.    Table of contents

To:

From:

Date:

Topic:

 

Introduction:Company introduction and a brief description of accounting and finance

4.    Main body (where you are answering the questions asked in 2 tasks)

5.    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)

6.    References (Minimum of 10)

 

Required

 

TASK 1 (1500 WORDS)

 

You are part of the Accounting and Finance team at SKANSKA PLC. Write a report to the Management of SKANSKA PLC, critically evaluating the importance of Accounting and Finance functions, duties and roles within SKANSKA PLC.  Your evaluation must include some examples within the Company where appropriate.

 

1.  Accounting department:

. Financial accounting

. Management accounting

. Tax function.

. Auditing function

 

2.  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 with relevant examples from the case.

 

(40 marks)     

TASK 2 (1500 WORDS)

 

Using the financial statements of SKANSKAPLC calculate the ratios required and comment on the company’s performance from an Investor with £1 million perspective.

(50 marks)

 

Marks will be awarded for Structure and Presentation skills. Structure includes the orderly presentation of relevant material. In addition, the extent of research evidenced by the appropriateness and adequacy of in-text referencing. 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 functions/roles/duties of accounting and finance team within SKANSA PLC with appropriate examples.            40%

 

Ratio calculation……………………………………………………………………………………..…………………………   10%

 

Interpretation and analysis of the Ratios in relation to SKANSA PLC performance………………                                40%

 

TOTAL MARKS 100%
 

 

 

 

 

 

 

 

 

 

The summarised financial statements of SKANSA PLC, a Public company engaged in Construction, are shown below: Statement of profit and loss:

 

 

 

 

 

Task 2 – Required

 

  1. Calculate the following five ratios for each of the two years:

 

  • Return on capital employed
  • Net profit margin
  • Current ratio
  • Average Receivable days/ Debtors collection period
  • Average Payable days/ Creditors collection period

                                                                                         (10 marks)

To answer this question, you need to calculate the five ratios mentioned in the question using the financial data provided in above two tables. The formulas for your assistance are mentioned above:

 

Ratio Formula 2018 2019
ROCE Operating profit/Total assets-current liabilities  *100    
Net profit margin Net profit/Sales*100    
Current Ratio Current assets/current liabilities    
Average receivable days Receivables/Sales *365    
Average Payable days Payables/Purchases * 365    

 

 

Refer to your class notes for further clarifications on calculations

 

 

  1. Comment on the performance of SKANSKA PLC. results from and position between the two (2) years from (a), mentioning possible causes, reasons and effects for the changes in the ratios.

(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 employed
  1. Definition
  2. What does the ratio indicate about company’s performance
  3. Compare 2018 figures with 2019 figures calculated above

Explain what do these numbers mean and how has the figure changed in 2019 as compared to 2018

  1. Reasons behind the value of the ratio going down in 2019 as compared to 2018
  2. Ways to improve the value of the ratio in future
  • Net profit margin
  1. Definition
  2. What does the ratio indicate about company’s performance
  3. Compare 2018 figures with 2019 figures calculated above

Explain what do these numbers mean and how has the figure changed in 2019 as compared to 2018

  1. Reasons behind the value of the ratio going down in 2019 as compared to 2018
  2. Ways to improve the value of the ratio in future
  • Current ratio
  1. Definition
  2. What does the ratio indicate about company’s performance
  3. Compare 2018 figures with 2019 figures calculated above

Explain what do these numbers mean and how has the figure changed in 2019 as compared to 2018

  1. Reasons behind the value of the ratio going down in 2019 as compared to 2018
  2. Ways to improve the value of the ratio in future

 

 

  • Average Receivable days/ Debtors collection period

 

  1. Definition
  2. What does the ratio indicate about company’s performance
  3. Compare 2018 figures with 2019 figures calculated above

Explain what do these numbers mean and how has the figure changed in 2019 as compared to 2018

  1. Reasons behind the value of the ratio going down in 2019 as compared to 2018
  2. Ways to improve the value of the ratio in future

 

  • Average Payable days/ Creditors collection period

 

  1. Definition
  2. What does the ratio indicate about company’s performance
  3. Compare 2018 figures with 2019 figures calculated above

Explain what do these numbers mean and how has the figure changed in 2019 as compared to 2018

  1. Reasons behind the value of the ratio going down in 2019 as compared to 2018
  2. Ways to improve the value of the ratio in future

 

 

Criteria   70% 60-69% 50-59% 40-49% Fail
Presentation Including report format, clarity of expression, referencing, conclusion  

 

 

10%

Brief fully met within word count. Professional presentation and language used in a report format. Excellent range and source of referencing.  Harvard referencing used. Excellent conclusions Written in a Report format within word count. Meets brief fully. Clearly written and presented. Good referencing used from a range of sources with sensible and detailed conclusions Structured well in a Report format. Writing style is sometimes unclear. Adequate references however only partial use of Harvard referencing. A reasonable attempt at a conclusion made Brief partially met and an attempt made at a Report format. Too long or too short. Poor presentation. Problems with writing style. Few references and little conclusion given Brief not fully met. Far too long or too short. Not in a Report format. Unclear structure

and poor presentation. No references or conclusion given

Role of management accounting techniques in planning, control and decision making process  

 

40%

Demonstrates excellent research and understanding of

the role of

management accounting techniques and of its uses in planning,

control and decision making

The role of

management accounting techniques has been well researched demonstrating a

good understanding of its uses in planning, control and decision making

Some research into

the role of

management accounting techniques is demonstrated together with some understanding of its practical uses in planning, control and decision making

Limited analysis of

the role of

management accounting techniques in an organization and its uses in planning,

control and decision making

Little or no understanding demonstrated of the role of management accounting techniques in an organization or its role in planning, control and decision making
Ratio Calculation  

 

10%

Excellent ratio calculations with the correct units of measurements for all the ratios required over the two-year period. A good ratio calculations with the correct units of

measurements for at least 4 of the ratios required over the two-year period

Fair ratio calculations with the correct units of

measurements for at least 3 of the ratios required over the two-year period

Weak ratio calculations with the correct units of

measurements for at least 2 of the ratios required over the two-year period

Poor ratio calculations with the correct units of

measurements for at least 1 of the ratios required over the two-year period

Interpretation and analysis of  financial ratios  

 

40%

Excellent interpretation and analysis of the performance are provided to demonstrate the financial situation and possible causes for the change from an investors perspective. Good interpretation and analysis of the performance are provided to demonstrate the

financial situation and possible causes for the change from an investors perspective.

Fair interpretation and analysis of the performance are provided to demonstrate the

financial situation and possible causes for the change from an investors perspective.

Weak interpretation and analysis of the performance are provided to demonstrate the

financial situation and possible causes for the change from an investors perspective.

Poor interpretation and analysis of the performance are provided to demonstrate the

financial situation and possible causes for the change from an investors perspective.

 

 

 

 

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