“PLEASE READ CAREFULLY”
WHARE HOUSE IS THE COMPANY .
YOU NEED TO MAKE THE FINANCIAL MANAGEMENT PLAN 2019, 2020,2021,2022.
YOU NEED TO SEE THE BLANCED SHEET AND USE THE CONSOLIATED BALANCE SHEET OF 2019 FOR THE NUMBERS AND ASSUMED 11% FOR 2020,2021,2022.
2019 BALANCED SHEET IS ALREADY GIVEN AND YOU NEED TO SEE CONSOLIATED BALANCE SHEET ONLY.
Instructions for students
1. Preparation of financial management plan (LO1, LO2 & LO3)
For this assessment, you are required to produce a Financial Management Plan for a business entity (Public listed Company) that will be approved by your lecturer.
In the plan, you must:
· Demonstrate knowledge and skills to analyse and apply financial information to make informed decisions and forecasts to improve the business entity’s performance. (Learning Outcome 1)
· Engage stakeholders for effective use of financial information to make investment decisions and forecasts. (Learning Outcome 2)
· Analyse and manage the impact of the business environment on financial decisions of a business entity. (Learning Outcome 3)
The financial plan you prepare must fulfil all the criteria laid out in Table 1. Tick each checkbox in the table to ensure all criteria are covered. Identify each piece of information using the code provided in the first column of the table.
You have to use the Warehouse Company’s annual report, website, media articles, textbooks and academic articles to prepare your financial management plan for the selected Company. You can contact the Company if you need further information which is not provided in their annual report or websites. Any copies of data provided by the business entity for calculations must also be co
ectly coded and attached to your plan.
2. Role Play (LO2) – Group (3 members)
Assume you are hired by the Company to prepare a financial management plan. In your role play, you have to assume that a discussion is a
anged with one internal and one main stakeholder to analyse the financial information and recommend suggestions to achieve the future financial goals of the Company. Further, the stakeholders discuss the opportunities for future investment decisions and the sales forecast to meet at least two stakeholders’ requirements. The detail of the role play is given on page no 11.
Code
Criteria (student to tick all that apply)
Refer the ru
ic for the details
A
The name and business of the organisation for which the financial management plan has been prepared is identified and provide a
ief background for your selected Company and industry (LO1a)
Word limit 100 +/- 10%
2 marks
B
The minimum two stakeholders, principals and agents of the business entity, are clearly identified. (LO1a)
Explain each stakeholder’s interest in the business.
Explain the principal and agent relationship in a public listed company based on agency theory.
Word limit 150 +/- 10%
6 marks
C
Capital budgeting/project feasibility assessed using: (LO1a)
• NPV method
• IRR method
You have to prepare a proforma income statement by using relevant assumptions to calculate the annual operating net cash flow for three years to calculate the NPV and IRR.
Recommendations are co
ectly provided based on the calculations.
Financial information received from the business for this purpose is attached or co
ectly coded and clearly stated.
Calculations are clearly shown (LO1a).
Word limit 100 +/- 10%
8 marks
D
Select two of the following KPIs and calculate the ratio that is given in Appendix 1: (LO1a)
Liquidity and long-term solvency
Profitability
Efficiency of operations (LO1a)
The above analysis is to be based on the financial data for the last three years. The ratio table is given in Appendix I is co
ectly filled out. Use the 4th financial year to calculate the averages. (ROE, ROA, Inventory TO, Trade receivable TO, Age of Trade receivable and Payable).
Select 5 ratios for each area. You can select from the ratios given in the appendix, or you can choose the relevant ratio if you select a business entity that provides services.
Workings and calculations of ratios are clearly presented. Follow the 2 decimal rule and indicate the final units co
ectly.
Information for the analysis is culled from at least two of the following financial statements: (select at least two)
¨ Income statement
¨ Balance sheet
¨ Statement of changes in equity
¨ Cash flow statement. (LO1a)
Financial information received from the business for this purpose is attached or co
ectly coded and clearly presented.
Provide a detailed interpretation of financial analysis including trend analysis, identify the issues and provide suggestions to make future decisions to improve the business entity’s performance. (LO1b)
Word limit 350 +/-10%
24 marks
E
Financial risk is analysed using two of the following methods: (select any two) (LO1b)
¨ Expected return
¨ Standard deviation
¨ Coefficient of variation
Financial information received from the business for this purpose is attached and co
ectly coded or clearly stated. (Hint: use close historical share prices for last quarter (Oct, Nov and Dec 2019) of the 2019 year for your selected Company or industry and explain how COVID 19 affects the Company’s return or future risk.
Calculations are clearly shown. (100 words +/- 10%)
6 marks
F
The impact of working in a global context on global capital budgeting, valuation, financial decision making and forecasting is analysed and explained.
The analysis takes into consideration at least one of the following factors: (LO3b)
¨ Divisional differences
¨ Cu
ency
¨ Taxation
¨ Country risks
¨ Adaptable incentive systems
Words limit +/- 200 words
5 marks
G
Write a report clearly describing how the Company engaged with the stakeholders to achieve the financial goals of a business entity.
Stakeholders must include at least one internal and one main stakeholder or select one other stakeholder.
Internal stakeholders may include: (select at least one)
¨ Managers
¨ Employees
¨ Management board/governors
Main stakeholders may include: (select at least one)
¨ Owners/shareholders
¨ Lenders/financiers
¨ Suppliers
¨ Clients
Other stakeholders may include (select if applicable):
¨ Government agencies
¨ People
¨ Communities (LO2a)
Information is researched, evaluated and communicated to stakeholders regarding financial analysis, investment decision or financial decision to meet the financial goals of the entity. (LO2b)
Documents that show evidence of stakeholder engagement are attached and co
ectly coded. (LO2a)
Documents may include minutes of meetings and other relevant documents. Evidence statements are clearly stated rather than providing the link.
Word limit 350 +/- including evidence documents
15 marks
H
Analyse and manage the compliance with internal and external requirements of the business entity during the financial decision making and forecasting process.
This may include but is not limited to identification, management and monitoring of compliance requirements.
Evidence of managing at least one compliance requirement for internal and external is provided.
Evidence may be in the form of legislation, corporate governance meetings, internal financial policy and other relevant documents. The evidence clearly stated in the answer rather than providing the links of the compliance.
Word limit 250 +/- 10% including evidence documents.
8 marks
I
I. Applying business knowledge to analyse and apply financial information. Business knowledge may include knowledge of principles and practices for: (select any 3). This part has to be answered based on the KPIs and financial analysis that you have described in part D.
¨ Operations;
¨ Accounting;
¨ Sales and marketing;
¨ Human resources;
¨ Risk management. (LO1c)
(Word limit 150 +/- 10%)
6 marks
J
J. Research and analyse how the business entity has used the professional, ethical, and socially and culturally appropriate behaviour is modelled during the financial decision making. You can choose any two factors to analyse the behaviour related to the business entity. For this, you have to refer the annual reports of the selected Company, newspaper articles, company websites, legislations to support your answer. (LO1e)
Word limit 125 +/- 10%
5 marks
· The assessor’s judgement is called for to determine the validity and quality of the analyses and marks to be allocated.
APPENDIX I
Table for calculation of ratios
Ratio Formulas
Year _________
Year _______
Year _________
1. Gross profit margin
2. Net profit margin
3. Operating profit margin
4. Return on (average)equity ratio
5. Return on average assets ratio
6. Total asset turnover ratio
7. Fixed asset turnover ratio
8. Inventory (average) turnover ratio
9. Trade receivable (average) turnover ratio
10. Age of trade receivable ratio
11. Age of creditors ratio
12. Cu
ent ratio
13. Quick ratio
14. Interest coverage ratio
15. Debt Ratio
16. Proprietary Ratio
All workings must be clearly shown.
Ru
ic
6213 Assignment 2 Financial plan
6213 Assignment 2 Financial plan
Criteria
Ratings
Pts
This criterion is linked to a Learning OutcomeSection A: The name and business of the organisation for which the financial management plan has been prepared is identified and provide a
ief background for your selected company and industry (LO1a) Word limit 100 +/- 10%
2.0 to >1.0 pts
Excellent
The business background explained and identified the industry and
iefly discussed its cu
ent impacts. The in-text citation used to address the source of information. Spelling and grammar e
ors are minor only.
2.0 pts
This criterion is linked to a Learning OutcomeSection B: Explain each stakeholder’s interest in the business. ¨ Explain the principal and agent relationship based on the agency theory Word limit 150 +/- 10%
6.0 to >4.0 pts
Excellent
Identified any two major stakeholders and explained their interest in the selected company. Identified the principal and agents of the company chosen and explained this relationship-based on (ownership) agency theory. The in-text citation used to address the source of information. Spelling and grammar e
ors are minor only.
6.0 pts
This criterion is linked to a Learning OutcomeSection C: Capital budgeting/project feasibility is assessed using: (LO1a) • NPV method • IRR method You have to prepare a proforma income statement by using assumptions to calculate the annual operating net cash flow for three years to calculate the NPV and IRR. Recommendations are co
ectly provided based on the calculations. Financial information received from the business for this purpose is attached and co
ectly coded or clearly stated. Calculations are clearly shown (LO1a). Word limit 100 +/- 100
8.0 to >6.0 pts
Excellent
Developed a proforma income statement by using assumptions to calculate the annual operating cash flow for three years based on the cu
ent financial statements XXXXXXXXXXCalculated the co
ect NPV & IRR and accurate recommendations provided based on the NPV and IRR criteria. Financial information attached.
8.0 pts
This criterion is linked to a Learning OutcomeSection D: Information for the analysis culled from at least two of the following financial statements: (select at least two) Income statement Balance sheet Statement of changes in equity Cash flow statement. (LO1a) Financial information received from the business for this purpose is attached and co
ectly coded or clearly stated. Provide a detailed interpretation of financial analysis, including trend analysis, identify the issues and provide suggestions to make future decisions to improve the business entity’s performance. (LO1b) ¨ Word limit 300 +/-10%
24.0 to >18.0 pts