BM414 Financial decision making Assignment
Assignment Brief Academic Year 2022-23
| Module code and title: | BM414 Financial decision making | Module leader: | Dr Ioannis Karfakis |
| Assignment No. and type: | CW1: 2500-word report to include business calculations/ratios | Assessmentweighting: | 100% |
| Submission time and date: | 02/06/2023 before 2 pm | Target feedbacktime and date: | 3 weeks after submission deadline |
Assignment task
SKANSA PLC is a Construction Company based in UK. SKANSA PLC started back in 1984. The company is planning to expand its operations to other countries in Europe in the next ten (10) years.
The summarised financial statements of SKANSA PLC, a Public company engaged in Construction, are shown below.
Statement of profit and loss:
| For the year ended 31 Dec. 2020 | For the year ended 31 Dec. 2021 | |||
| £000 | £000 | £000 | £000 | |
| Sales revenue | 4,800 | 6,000 | ||
| Cost of sales | ||||
| Opening inventory | 1,200 | 450 | ||
| Purchases | 2,700 | 4,800 | ||
| 3,900 | 5,250 | |||
| Less: Closing inventory | (450) | (3,450) | (900) | (4,350) |
| Gross profit | 1,350 | 1,650 | ||
| Operating expenses | (600) | (675) | ||
| Finance cost | (150) | (300) | ||
| Net profit | 600 | 675 |
There are lots of other guidelines which you have to know for your knowledge and one of them is BUS500 Management in Context.
Internal approval: Mihaela Vasiliu 21/09/2022
| Statement of financial position | As at year to 31 Dec. 2020 | As at year to 31 Dec. 2021 | ||
| £000 | £000 | £000 | £000 | |
| Non-current assets | 2,955 | 6,000 | ||
| Current assets | ||||
| Inventory | 450 | 750 | ||
| Receivables – trade | 900 | 1200 | ||
| Prepayments | 90 | 105 | ||
| Cash | 75 | 1,515 | 15 | 2,070 |
| 4,470 | 8,070 | |||
| Issued share capital | 900 | 900 | ||
| Share premium account | 300 | 300 | ||
| Retained earnings | 1,125 | 1,650 | ||
| 2,325 | 2,850 | |||
| Non-current liabilities | ||||
| 10% loan notes | 1,500 | 3,000 | ||
| Current liabilities | ||||
| Payables – trade | 570 | 2,100 | ||
| Accruals | 75 | 645 | 120 | 2,220 |
| 4,470 | 8,070 |
An individual written assignment of 2,500 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 SKANSA Plc. The financial performance evaluation will enable the potential investors decide whether to invest in this company.
You are advised to incorporate the suggested amendments/feedback you received from the module leader during assignment briefing.
TASK 1
You are part of the Accounting and Finance team at SKANSA PLC.
Write a report to the Management of SKANSA PLC, critically evaluating the importance of Accounting and Finance functions, duties and roles within SKANSA PLC. Your evaluation must include some examples within the Company where appropriate.
TASK 2
- Using the financial statements of SKANSA PLC, 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
- Comment on the company’s performance from an Investor with £1 million perspective.
The interpretation and analysis of the Ratios in relation to SKANSA PLC’s performance is required here. Results from and position between the two (2) years should be revised, explained and analysed, mentioning possible causes, reasons and effects for the changes in the ratios.
| This assignment has been designed to provide you with an opportunity to demonstrate your achievement of the following module learning outcomes: |
| LO 1: Demonstrate knowledge of the role of finance and accounting within the organisation with respect to both reporting and decision-making aspects. |
| LO 2: Explain the structure and terms used within the main financial statements. |
| LO 3: Apply management accounting techniques for planning, control and decision-making within the organisation. |
| LO 4: Calculate the main accounting ratios and explain their significance. |
| Referencing and presentational requirements |
| Please reference your work using the Harvard style as defined in Cite Them Right Online (http://www.citethemrightonline.com). This information is also available in book form: Pears, R. and Shields, G. (2019) Cite them right: the essential reference guide. 11th ed. Basingstoke: Palgrave Macmillan. Copies are available via the University library. Additional requirements: There must be a Cover Page and Contents Page, paragraphs of Introduction, Conclusion and pages must be numbered. |
| Submission details |
| This assignment should be submitted electronically using the relevant submission point in the Upload My Assignment section of LSST Connect. Please ensure that your work has been saved in an appropriate file format. Turnitin will only accept the following file types: Microsoft Word, Excel or power Point, PDF. Your file must also contain at least 20 words of text, consist of fewer than 400 pages and be less than 40MB in size. You can submit your work as many times as you like before the submission date. If you do submit your work more than once, your earlier submission will be replaced by the most recent version. Once you have submitted your work, you will receive a digital receipt as proof of submission, which will be sent to your LSST email address. Please keep this receipt for future reference, along with the original electronic copy of your assignment. You are reminded of the University’s regulations on academic misconduct, which can be viewed on the University website: https://www.bucks.ac.uk/current-students/registry-helpdesk-and-academic- advice/academic-integrity-and-misconduct In submitting your assignment, you are acknowledging that you have read and understood these regulations. |
| Please also note that work that is submitted up to 10 working days beyond the submission date will be considered a late submission. Late submissions will be marked and the actual mark recorded but will be capped at the pass mark (typically 40%), provided that the work is of a passing standard. Work submitted after this period will not be marked and will be treated as a non-submission. |
| Academic integrity |
| Academic integrity means taking responsibility for your own work. When you submit an assignment, you are effectively making a declaration that it is your own work and that you have acknowledged the contribution of others and their ideas in its development (for example, by referencing them appropriately). For further information and guidance, please see the University website: https://www.bucks.ac.uk/current- students/registry-helpdesk-and-academic-advice/academic-integrity-and-misconduct You are also expected to take responsibility for maintaining and managing confidentiality issues in your work. You should maintain and respect confidentiality in relation to the protection of personal, technical and/or commercial information of a sensitive nature in their assessed work, whatever the format. Confidentiality issues will vary from subject to subject and you are encouraged to seek advice from your course team if you are unclear about requirements in your context. For further information and guidance, please see the University website: https://www.bucks.ac.uk/academic-confidentiality |
| How your work will be assessed |
| Your work will be assessed against the assessment criteria which have been provided at the end of this brief. These criteria have been designed specifically for this assignment and are intended to measure the extent to which you have demonstrated your achievement of its associated learning outcomes (see above). They have been aligned with the institutional grade descriptor appropriate for your level. The assessment criteria provide a basis for fair and consistent marking and indicate what is expected of you in this assignment. It is strongly recommended that you engage with them while you are working on the assignment and use them in combination with any feedback you receive once your work has been marked to help you plan for future learning and development. |
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