FINANCIAL DECISION MAKING Business and Economic Environment FE4055 Understanding the Business and Economic Environment Business …

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Faculty of Design, Media &
Management
Assignment Brief
Module Title:
FINANCIAL DECISION MAKING
Module Code:
BM414
Assignment No/Title:
ASSIGNMENT
Assessment
Weighting:
100%
Submission Date:
25th May 2021 before 2pm
Feedback
Target Date:
3 weeks
Module Co-ordinator/
Tutor:
Farzaneh Rezaee
Course Area
FD
Submission Instructions:
This assignment is to be submitted electronically using VLE
1. This assignment must be submitted electronically by 2pm on the submission date
2. To submit electronically you must upload your work to the e-submission area within the VLE module
concerned. Click Submit> Browse (find the correct file to upload) Upload> Submit
3. You can resubmit your work as many times as you like until the deadline. If you choose to resubmit, your
earlier submission will be replaced, and you will NOT receive an Originality Report until 24 hours from when
the submission was made.
4. You will receive a digital receipt as proof of submission. This will be sent to your Bucks e-mail address; please
keep this for reference.
5. You are reminded of the University’s regulations on cheating and plagiarism. In submitting your assignment,
you are acknowledging that you have read and understood these regulations.
6. You are reminded that it is your responsibility to keep an electronic copy of your assignment for future
reference.
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
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The Assignment Task:
Please note;
SKANSKA PLC is a Construction Company based in UK. SKANSKA 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 financial statements of SKANSKA
PLC. are attached for your consideration and attention.
You are advised to incorporate the suggested amendments/feedback you received from the module leader during
assignment briefing.
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.
(40 marks)
TASK 2 (1000 WORDS)
Using the financial statements of SKANSKA PLC 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 SKANSKA PLC with appropriate examples. 40%
Ratio calculation……………………………………………………………………………………..………………………… 10%
Interpretation and analysis of the Ratios in relation to SKANSKA PLC performance……………… 40%
TOTAL MARKS 100%
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The summarised financial statements of SKANSKA PLC, a Public company engaged in Construction, are shown below:
Statement of profit and loss:
For the year ended
31 Dec. 2018
For the year ended
31 Dec. 2019
£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
Statement of financial position
As at year to 31 Dec.
2018
As at year to 31 Dec.
2019
£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
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Task 2 – Required
a. Calculate the following five ratios for each of the two years:
(i) Return on capital employed
(ii) Net profit margin
(iii) Current ratio
(iv) Average Receivable days/ Debtors collection period
(v) Average Payable days/ Creditors collection period
(10 marks)
b. Comment on the performance of SKANSA 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)
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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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