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03-29-2022
Using the accounts, and notes, for Trust plc, write a report of 2000 words to management on the performance of the company
ASSESSMENT
1.1 Summary
This is an individual work.
Weighting: 100%
Word count: 3,000
Submission deadline: 13 May 2022
Learning outcomes evidenced by this assignment
All the Learning outcomes is evidenced in the assignment.
Submission procedure
Students are required to submit their reports electronically via Turnitin (see further instructions in the Submission section below). If students cannot submit their reports to Turnitin for whatever reason, they will need to email their works to me (k ) by the deadline.
Return of feedback and marked work
Feedback will be provided to students in written comments on the marked scripts.
1.2 Introduction
This assessment requires students to show a sound understanding of several areas in financial and management accounting and the ability to critically evaluate a business’ performance.
2. Details of the task
SECTION A
You are provided with the details of Trust’s financial statements as below:
Statements of Financial Position as at 31st March
2020
2021
£m
£m
£m
£m
Assets
Non-current assets
Property, plant & equipment
Land & buildings
450
500
Fixtures & fittings
150
180
600
680
Current assets
Inventories
350
400
Trade receivables
200
300
Cash at bank
10
20
560
720
Total assets
1,160
1,400
Equity & liabilities
Equity
£1 ordinary shares
400
400
Retained earnings
210
220
610
620
Non-current liabilities
Borrowings – 5% loan notes (secured)
300
400
Current liabilities
Trade payables
200
300
Taxation
30
20
Bank overdraft
20
60
250
380
Total equity & liabilities
1,160
1,400
Statement of Profit & Loss for the year ending 31st March
2020
2021
£m
£m
Revenue
3000
4000
Cost of sales
-2100
-2850
Gross profit
900
1150
Operating expenses
-350
-550
Operating profit
550
600
Interest payable
-50
-60
Profit before taxation
500
540
Taxation
-60
40
Profit for the year
440
500
Notes to the accounts:
The market value of the shares of the business at the end of the reporting period was £3.00 for 2020 and £2.00 for 2021.
All sales and purchases are made on credit
The cost of sales figures can be analysed as follows:
2020
2021
£m
£m
Opening inventory
350
250
Purchases
2000
3,000
2,350
3,250
Closing inventory
-250
-400
Cost of sales
2100
2,850
At 31st March 2019 the trade receivables stood at £250m and the trade payables at £200m
A dividend of £40m had been paid to the shareholders in respect of each of the years
The business employed 14,000 staff at 31st March 2020 and 19,000 at 31st March 2021
The business expanded its capacity during 2021 by setting up a new warehouse and distribution centre
At 1st April 2019, the total equity stood at £450m and the total of equity and non-current liabilities stood at £650m.
Required:
Using the accounts, and notes, for Trust plc, write a report of 2000 words to management on the performance of the company. This report should be done by analysing the following ratios for each of the two years presented.
Profitability Ratios including Return on Capital Employed, Operating Profit and Gross Profit margin
Efficiency ratios including Inventory Turnover days, Account Receivable Days and Account Payable Days
Liquidity Ratios including Current ratio and acid test ratio
Investment ratios including Earnings per share and Price Earnings ratio
Financial Structure ratios including interest cover and gearing ratio marks) (Total: 50 Marks)
SECTION B
As an Accountant within the Financial and Management Accounting department at Manor Ltd, you have been asked to write an essay on the following financial and management concepts:
1. Analyse the objectives of budgeting to Manor Ltd (10 marks)
2. Differentiate between financial and management accounting.(10 marks)
Two projects being considered are mutually exclusive and have the following projected cash flows:
Year
Project A
Project B
0
−$50,000
−$50,000
1
26,000
0
2
17,625
0
3
15,000
0
4
10,000
0
5
32,000
99,500
Required :
(a) Calculate the Payback Period for the projects A & B (5 marks)
(b) Calculate the Net Present Value for the projects A & B, using a discount rate @ 10% (10 Marks)
(c) Which projects would be chosen and why? (5 marks)
Show your calculations/explanations
2.1 Guidance
Try to be reader-friendly . Your work should not have more than 25 pages (excluding the front sheet, the title page, abstract, and the contents page) .
You should link your assessment of the firm’s financial performance to changes in the competitive environment, the firm’s operations and its strategies . For example, you will need to show how changes in the firm’s sales turnover may be driven by those in the competitive environment, the firm’s operations and its strategies. Make sure that all changes in the firm’s financial performance are well justified .
Extra credits will be given to students who show a high level of depth in their analyses and the ability to link the firm’s financial performance to changes in the competitive environment, the firm’s operations and its strategies .
You should comment on the share price movement and explain that movement by changes in its financial performance during the period .
Use a wide range of references, both academic and business. Using the accounts, and notes, for Trust plc, write a report of 2000 words to management on the performance of the company
2.2 Structure
Your report should contain:
Front sheet
Word count (excluding appendices and reference list)
Title page, including the given title in full
Abstract (no more than 50 words)
Contents page
Introduction
Main body with appropriate headings
Conclusion
Numbered appendices
2.3 Presentation
Your work should be word processed in accordance with the following:
Font style, Lucida Sans, font size 12
1.5 line spacing
The page orientation should be ‘portrait’
Margins on both sides of the page should be no less than 2.5 cm
Pages should be numbered
Your name should not appear on the script
Your student number should be included on every page
3. Skills advice
Refer to your material provided in your skills modules to make sure that you have conformed to academic conventions. Pay particular attention to:
Your introduction,
Your conclusion,
The use of headings and/or signpost words
Paragraph structure
Do refer to Info skills at http://writeitright.uelconnect.org.uk/home/ and http://infoskills.uelconnect.org.uk/
Referencing
The university expects students to use Harvard referencing as specified in the book Cite them Right.
4. Word count
Your word count should not include your abstract, contents, reference list or appendices. You need to provide your word count in the frontsheet . Failing to provide your word count in the front sheet and exceeding/ failing to meet the word count by more than 10% will result in a penalty of 10% of your marks for your work. If your work is significantly shorter, then you will probably have failed to provide the level of detail required.
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