ASSIGNMENT INSTRUCTIONS Assessment Coursework Assessment code: 010 Academic Year: 2020/21...

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ASSIGNMENT INSTRUCTIONS
Assessment Coursework
Assessment code: 010
Academic Year: 2020/21
Trimester: 2
Module Title: Business Finance
Module Code: MOD003319
Level: 4
Module Leader: Nidhi Gogia
Weighting: 50%
Word Limit: 2500
This excludes bibliography and other items listed in rule 6.75 of the
Academic Regulations:
http:
web.anglia.ac.uk/anet/academic/public/academic_regs.pdf
Assessed Learning
Outcomes
1-3
Submission Deadline :
This assignment must be received no later than 14:00 on Friday 27th
November 2020
http:
web.anglia.ac.uk/anet/academic/public/academic_regs.pdf

WRITING YOUR ASSIGNMENT:
 This assignment must be completed individually.
 You must use the Harvard referencing system.
 Your work must indicate the number of words you have used. Written assignments must not exceed the specified
maximum number of words. When a written assignment is marked, the excessive use of words beyond the word limit
is reflected in the academic judgement of the piece of work which results in a lower mark being awarded for the piece
of work (regulation 6.74).
 Assignment submissions are to be made anonymously. Do not write your name anywhere on your work.
 Write your student ID number at the top of every page.
 Where the assignment comprises more than one task, all tasks must be submitted in a single document.
 You must number all pages.
SUBMITTING YOUR ASSIGNMENT:
In order to achieve full marks, you must submit your work before the deadline. Work that is submitted late – up to five
working days after the published submission deadline - will be accepted and marked. However, the element of the
module’s assessment to which the work contributes will be capped with a maximum mark of 40%.
Work cannot be submitted if the period of 5 working days after the deadline has passed (unless there is an approved
extension). Failure to submit within the relevant period will mean that you have failed the assessment.
Requests for short-term extensions will only be considered in the case of illness or other cause considered valid by the
iCentre Adviser. Please contact XXXXXXXXXX. A request must normally be received and agreed by the
iCentre Adviser in writing at least 24 hours prior to the deadline. See rules XXXXXXXXXX:
http:
web.anglia.ac.uk/anet/academic/public/academic_regs.pdf

Mitigation: The deadline for submission of mitigation in relation to this assignment is no later than five working days after
the submission date of this work. Please contact XXXXXXXXXX
See rules 6.103 – 6.132: http:
web.anglia.ac.uk/anet/academic/public/academic_regs.pdf
mailto: XXXXXXXXXX
http:
web.anglia.ac.uk/anet/academic/public/academic_regs.pdf
mailto: XXXXXXXXXX
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web.anglia.ac.uk/anet/academic/public/academic_regs.pdf

1.1 Case Study – T shirts Ltd
You are a finance trainee for a company of Vests plc and have been asked by your marketing manager to
eview the business of your key competitor T-shirts plc and to assist her with helping the marketing team
understand financial information.
You know that T-shirts plc is struggling in the cu
ent economic climate and that other expenses have risen as
a result of an aggressive advertising campaign to stimulate sales.
Your sales manager has informed you that T-shirts plc increased the credit terms given to their customers
from 30 days to 60 days in an attempt to attract more business.
The rate of interest on the bank overdraft in 2019 is significantly higher than the rate of interest on the loan.
1.2. Task

Prepare a 2,500 word business report for your manager providing analysis and business advice following the
equirements below.

Presentation and format:
Business report with a title page, contents page and clear structure. It must be written in an appropriate
usiness tone with appropriate Harvard reference where necessary. Note no introduction is required. No
marks will be awarded for an introduction. XXXXXXXXXX5 marks
Part 1: Business Performance Analysis: XXXXXXXXXXmarks total
To support your analysis for this part you will need to calculate and use appropriate ratios using the course
definitions. You need to show all ratio calculations workings which should be placed in the appendices to your
eport.
1.1. Statement of Profit or Loss
Analyse and comment on the financial performance of T-shirts Ltd using the case study information and
exhibit 1. Your analysis should critically evaluate all the lines of the Statement of Profit or Loss.
XXXXXXXXXX20 marks
1.2. Statement of Financial Position
Analyse and comment on the financial position of T-shirts Ltd using the case study information and exhibit 1.
Your analysis should critically evaluate all the lines of the Statement of Financial Position.
XXXXXXXXXX20 marks
Part 2: Understanding Financial Information & Management of Cash: 25 marks
2.1. Explain the concept of accrual accounting versus cash accounting, including the benefits and any
limitations of each, with examples from this case study where relevant. XXXXXXXXXX15 marks

2.2. What is meant by Profit and Cash flow and how they are different XXXXXXXXXXmarks

Part3: Budget techniques and Company Finance: 30 marks

XXXXXXXXXXDefine Budget and explain purposes of preparing a budget XXXXXXXXXXmarks
XXXXXXXXXXWhat might be the main benefits of forming a limited company and listing it on a stock exchange.
XXXXXXXXXXmarks

The word limit of 2,500 words excludes numerical tables, bibliography and appendices.
To assist you with this task you have been supplied with the following information:
 Exhibit 1: Extracts from T-shirt Ltd’s Financial Statements for 2019, including the Statement of Profit or
Loss, and the Statement of Financial Position.
1.3. Assessment Submission Structure
Part 1: Business Performance Analysis
1.1 Statement of Profit or Loss
1.2 Statement of Financial Position

Part 2: Understanding Financial Information & Management of cash
XXXXXXXXXXAccruals vs cash accounting
XXXXXXXXXXProfit vs Cash flows

Part 3: Budget and Company Finance
XXXXXXXXXXMeaning and Purposes of Budget
XXXXXXXXXXBenefits of forming a limited company and getting it registered on a stock exchange

Appendices
 Supporting calculations
 Bibliography as required
Exhibit 1: Extracts from T-shirt Ltd’s Financial Statements for 2019
Summary Statement of Profit & Loss for the years ended 31 December
XXXXXXXXXX XXXXXXXXXX
£000 £000
Revenue 1,366 2,101
Cost of sales XXXXXXXXXX)
Gross profit XXXXXXXXXX,261
Other expenses (1, XXXXXXXXXX)
Profit before interest and tax XXXXXXXXXX
Finance costs XXXXXXXXXX)
Profit / (loss) for the year XXXXXXXXXX
Summary Statement of Financial Position as at 31 December
XXXXXXXXXX
£000 £000
ASSETS
Non-cu
ent Assets
Property, Plant and Equipment 1,274 1,282
Cu
ent Assets
Inventories XXXXXXXXXX
Trade and other receivables XXXXXXXXXX
Cash and cash equivalents 0 45
XXXXXXXXXX
Total Assets 1,700 1,634
EQUITY AND LIABILITIES
Equity
Share Capital XXXXXXXXXX
Retained Earnings XXXXXXXXXX
Total Equity XXXXXXXXXX
Non-cu
ent Liabilities
Long-term bo
owings XXXXXXXXXX
XXXXXXXXXX
Cu
ent Liabilities
Trade payables XXXXXXXXXX
Bank overdraft XXXXXXXXXX
XXXXXXXXXX
Total Liabilities 1, XXXXXXXXXX
Total Equity and Liabilities 1,700 1,634
End of case study

tri-1-business-finance-010-coursework-helen-vniqmyog.pdf

Riddhi · Accepted Answer

Business performance Analysis on T shirts
Table of contents
	
1. Business Performance Analysis on T shirts Ltd
1.1 Statement of Profit and loss
1.2 Summary Statement of Financial Position
	
2. Business Performance Analysis on T shirts Ltd
2.1 Statement of Profit and loss
2.2 Summary Statement of Financial Position
	
3. Understanding Financial Information and Management of Cash
3.1 Concept of Accrual Accounting versus Cash Accounting
3.2 Profit and Cash Flow 
	
4. Budget Techniques and Company Finance 
4.1 Budget and Purpose of Preparing Budget
4.2 Benefit of Forming a Limited Company 
4.3 Benefit of Listing a Company on a Stock Exchange 
Business Performance analysis
The performance of the business is analyzed using statement of profit and loss account to understand the profit of the company and its comparison with the previous year to understand the reason for such change in profit or to monitor the reason for losses in the company. The analyzes is also done using financial statement to understand the number of days of inventory-maintained numbers of credit provided to debtors and number of days credit provided to creditors of the company. The return on equity also plays an especially important role as this return suggest the return available to the shareholders of the company who are the ultimate owner of the company. Performance analysis helps in understanding the performance of the business and the reasons behind such performance which can be further discussed with the top authorities of the company and the means for mitigating such risk are found by the company.  
Statement of profit or loss account
The profit and loss account of the organization as per trend analysis shows negative growth in the organization. The sales of the organization have reduced from 2101 in 2018 to 1366 in 2019. The sales have reduced by 35% which is a huge reduction in sales year on year. The cost of sales has not reduced considerably as compared to reduction in sales which says that the cost of manufacturing or wastage of the product has increased substantially which had a huge impact on profitability of the business. The cost of sales has reduced by 10.59% as compared to reduction in sales of 35%. This has resulted in reduction of gross profit of the organization by 51%. More than 50% of the gross profit has been lost in the year 2019 which has a direct impact on the company’s going concern ability.	
The analysis of profit and loss account helps us in analyzing the overall business performance at not just domestic level but also global level of the economic activity of the entity and also assist in analyzing analytical aspects along with the scope of exploitation of books of accounts to the evolution in the financial and structural performances (Bogdănoiu, C.L., 2019)
The gross profit ratio of the company was 60% in 2018 but reduced to 45% in 2018. The change in gross profit ratio of the organization is 25% from 2018. The reason for change in gross profit is primarily because of reduction in sales of the organization and increase in cost of sales. Increase in cost of sales could be because of factors like increase in rate of raw materials due to global demand or due to situations that are favorable for the country.	 
Despite reduction in sales, the expenses of the organization have increased from 820 in 2018 to 1009 in 2019, which resulted in increase in expenses by 23%. Increase in expenses, increase in cost of sales and reduction in sales has resulted in 	loss in the year 2019 from profits in the year 2018. The company made a loss before taxes of 394 from profit of 441 in the year 2018. Company has also procured funds which resulted in increase in finance cost of the company. The finance cost has increased from 69 in 2018 to 106 in 2019. The net profit after taxes of the organization in 2018 was 372, but in year 2019 the net loss after taxes shall be 500. The trend analysis shows the net percentage of change in trend by 234% which is a ridiculously huge change in a financial year. The reduction in sales could be on account of reduced demand for the product or competition or the quality of the product would have deteriorated.	
The operating profit margin of the company 	in 2018 was 0.21 which increased to -0.20 in 2019. The trend analysis show reduction in 	profit margin by 38%.	Operating profit of the company is reduced as a result reduction in gross profit and increase in other expenses and finance cost. This could be because company has been spending more on the marketing spends to increase the sales which may not be working for the company. 					
Statement of financial position
Analyzes of financial statement of the company is a lengthy and cumbersome process and this process is undertaken to assist management in decision making of the company. The ratio analyzes of the financial statements are most suitable for understanding the financial position of the company. Data analyzes is usually done using Quick ratio, current ratio, Gross profit margin, Net profit margin, Asset turnover ratio and Inventory turnover ratio. (Goud, M.A.A. and Kumar, M.K.S., 2019)
The fixed assets of the company being Property, Plant and equipment has not changed considerably from 1282 in 2018 to 1274 in 2019 and such difference of 0.62% shall be on account of depreciation provided in the books of accounts.
There has been an increase in inventory from 89 in 2018 to 121 in 2019 which says that the cost of holding the inventory would have increased and the inventory turnover in the organization would have also reduced.

ASSIGNMENT INSTRUCTIONS Assessment Coursework Assessment code: 010 Academic Year: 2020/21 Trimester: 2 Module Title: Business Finance Module Code: MOD003319 Level: 4 Module Leader: Nidhi Gogia...

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