Assignment Specifications Essay

Introduction

The assignment requires students to carry out calculations and make decisions based on an analysis of financial information - Assignment Specifications Essay introduction. For task one they should use a set of published accounts that they have sourced (as in activities above). For other tasks, an example of the information that could be provided is given below. Other examples can be sourced in accounting text books.

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Unit 6.8 Financial Decision Making for Managers
London Churchill College
Specification of Assessment
ASSIGNMENT:

Task 1
a) Using a set of published accounts from a real business organisation, carry out ratio analysis for two years (note: usually two years figure will be given in a set of published accounts). (1.3)
b) Comment on the business structure and financial structure of the organisation and the reporting requirements for the structure. Compare this with other possible business structures and explain the relative advantages of the structure of the chosen organisation. (1.1)

c) Compare the figures for two years and comment on the finances of the business. Explanations for changes should be sought and explained. Where information is not available, notes should be made about the information that is required. Note that additional information may be available in the financial press or on the Internet. (1.2, 1.3) d) Advise a potential investor on investing in the business compared to placing money in a deposit account. (Current deposit account interest rates should be sourced from local banks or Internet for comparison). The investor has £50 000 (or equivalent in other currency) to invest. (1.2)

e) Suppose the business requires additional finance of £500 000. Advise on a suitable source of finance giving possible alternatives, implications of each and reasons for your recommendation. (2.1, 2.2, 2.3, 2.4)

f) Advise on how working capital can be effectively managed within the business using figures from the accounts and your calculated ratios to illustrate your answer. (3.3)

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Unit 6.8 Financial Decision Making for Managers
London Churchill College
Task 2
a) Using given budgeting information, prepare a cash flow forecast and comment on the budget and cash flow. (3.1)
b) Make recommendations for managing cash flow and/or sourcing finance as required. (3.3) Green Limited is a wholesaler. The budgeted income statements for 6 months are as follows: Item
Sales Revenue
Cost of goods sold
Salaries and wages
Electricity
Depreciation
Other overheads
Total expenses
Profit/loss for the month

Jul
£’000
114
(64)
(20)
(6)
(6)
(4)
(100)
14

Aug
£’000
118
(66)
(20)
(6)
(6)
(4)
(102)
16

Sept
£’000
124
(70)
(20)
(8)
(6)
(4)
(108)
16

Oct
£’000
104
(59)
(20)
(10)
(6)
(4)
(99)
5

Nov
£’000
96
(54)
(20)
(12)
(6)
(4)
(96)
0

Dec
£’000
92
(52)
(20)
(12)
(6)
(4)
(94)
(2)

Notes:
1. All customers are allowed one month’s credit. Sales for June were £106 000. 2. The opening bank balance is £90 000
3. Salaries and wages and other overheads are paid in the month they are incurred 4. Electricity is paid quarterly in arrears in September and December 5. Inventories purchases are made on one month’s credit. June’s purchases amount to £64 000.

6. At the end of September, the business needs to pay for a new delivery truck at £25 000
7. At the end of November, the business has agreed to pay £135 000 back to
the bank to reduce a bank loan. This was before they realised they would need a new delivery van and was based on higher sales predictions for the last three months, which have had to be revised due to national recession.

3

Unit 6.8 Financial Decision Making for Managers
London Churchill College
Task 3
a) Assess the given projects using accounting rate of return, payback period, Net present values and internal rate of return. (3.2)
b) Make recommendations based on calculations and explain reasons for recommended choice. (3.3)
Hanley Manufacturing Limited has two potential projects. They can only invest in one project. The following information is available on the projects.

Cost (immediate outlay)
Expected annual operating profit (loss):
Year 1
Year 2
Year 3
Estimated residual value of machinery

Project 1
£’000
200

Project 2
£’000
100

58
(2)
4
7

36
(4)
8
12

The business has an estimated cost of capital of 10% and uses the straight line method of depreciation for non-current assets. The business has sufficient funding to meet capital expenditure requirements for either project.

Achievement of a pass grade

A pass grade is achieved by meeting all the requirements defined in the assessment criteria for each individual unit.
Plagiarism and Collusion
Any act of plagiarism and collusion will be seriously dealt with according to the regulations. In this context the definition and scope of plagiarism are presented below: “Using the work of others without acknowledging source of information or inspiration. Even if the words are changed or sentences are put in different order, the result is still plagiarism”. (Cortell 2003)

Collusion describes as the submission of work produced in collaboration for an assignment based on the assessment of individual work. When one person shares his/her work with others who submit part or all of it as their own work.

4

Unit 6.8 Financial Decision Making for Managers
London Churchill College
Extension and Late Submission
If you need an extension for a valid reason, you must request one using a coursework extension request form available from the college. Please note that the lecturers do not have the authority to extend the coursework deadlines and therefore do not ask them to award a coursework extension. The completed form must be accompanied by evidence such as a medical certificate in the event of you being sick.

Support materials
Textbooks
Particularly relevant texts are:
Mick B and John C — Managing Financial Resources (A Butterworth-Heinemann; 2003, 3rd edition) ISBN: 0750657553
Randolph W, Jeffrey J- Modern Financial Management (McGraw-Hill Higher Education; 2003, 8th edition) ISBN: 0071286527
Websites
www.acas.org.uk
Advisory, Conciliation and Arbitration Service
www.bized.ac.uk
provides business case studies appropriate for educational purposes www.cipd.co.uk
Chartered Institute of Personnel and development website with a range of learning resources
www.compactlaw.co.uk
employment questions and answers
www.cre.org.uk
Commission for Racial Equality
www.drc-gb.org.uk
Disability Rights Commission
www.dti.gov.uk
Department of Trade and Industry
www.employment-studies.co.uk
Institute for Employment Studies
www.eoc.org.uk
Equal Opportunities Commission
www.guardian.co.uk
provides links to news items and reports
www.hse.gov.uk
Health and Safety Executive
www.ilo.org
International Labour Organisation
www.incomesdata.co.uk
up-to-date intelligence on employment issues (Incomes Data
Services)
www.isma.org.uk
International Stress Management Association (UK)
www.peoplemanagement.co.uk bi-monthly journal of the Chartered Institute of Personnel and Development
www.personneltoday.com
relevant articles and statistics
www.successunlimited.co.uk site on bullying in the workplace www.trainingjournal.com
relevant articles on current training and development topics www.wfpma.com
a journal with articles on international aspects of managing people at work
www.wto.org
World Trade Organisation

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Unit 6.8 Financial Decision Making for Managers
London Churchill College
ASSESSMENT INFORMATION

Programme:
ATHE-Diploma in Management
Unit Number and Title:
Module Tutor:
Learner name:
Learner ID:
Information/feedback on assessment and grading criteria
Assessment criteria

Achieved

Evidence

1.1
1.2
1.3
2.1
2.2
2..3
3.1
3.2
3.3
4.1
4.2
4.3

Yes/No
Yes/No
Yes/No
Yes/No
Yes/No
Yes/No
Yes/No
Yes/No
Yes/No
Yes/No
Yes/No
Yes/No

Feedback

Report
Report
Report
Report
Report
Report
Report
Report
Report
Report
Report
Report

Assessor’s Grade:
IV decision
Final Grade:
Assessor’s general comments:
Assessor’s Signature

Date:

Print Name:

Learner’s comments:
Signature

Date:

Print Name:

Feedback of this coursework will normally be given to students four weeks after the submission of an assignment.
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