Financial Management
Important information
A penalty of five marks will be deducted for late submissions that are made within the first hour after the deadline. Submissions that are more than one hour late but within the first 24 hours of the deadline will incur a penalty of ten marks. After the first 24 hours have passed, ten marks will be deducted for every 24 hours (or part thereof) that the submission is late for a total of 5 days. After 5 days it is treated as a non-submission and given a mark of zero. The consequences of non-submission are serious and can include de-registration from the University.
If you are unable to complete your open assessment by the submission date indicated above because of Exceptional Circumstances you can apply for an extension. If unforeseeable and exceptional circumstances do occur, you must seek support and provide evidence as soon as possible at the time of the occurrence. Applications must be made before the deadline to be considered.
https://www.york.ac.uk/students/studying/progress/exceptional-circumstances
If you submit your open assessment on time but feel that your performance has been affected by Exceptional Circumstances you may submit an Exceptional Circumstances Affecting Assessment claim form by 7 days from the published assessment submission deadline. If you do not submit by the deadline indicated without good reason your claim will not be considered.
Please take proper precautions to safeguard your work and remember to make backup copies of your data. The University provides all its students with storage space on the University server and you should save and back up any work in progress on this server on a regular basis. Computer failure and theft of your equipment or storage media are not considered exceptional circumstances and extensions cannot be granted for work lost for these reasons.
Word count requirements
The word count for this assignment is 2,500 words.
You must state on the front of your assignment the number of words used and this will be checked.
The main text for this assignment must be word-processed in Arial, font 12, double spacing, minimum 2cm margins all around.
You must observe the word count specified in this assignment brief. The School has a policy of accepting variations to the recommended word count of plus or minus 10%.
What does this mean for you?
Markers will mark your work up to the word count maximum plus 10% and then will stop marking; therefore, all words which are in excess of the word count plus 10% will not be marked.
Where your word count is more than 10% below that specified, it is likely that this will result in a lack of analytical depth or relevant content, which will be reflected in the mark assigned.
What is in the word count?
The word count includes:
– the main text, including in-text reference citations and quotations.
The word count does not include:
– Appendices. These may be used to include supporting data, which may be too detailed or complex to include as a Table. They are not a device to incorporate material, which would otherwise cause you to exceed the word limit.
– Title page
– Contents page
– Abstract/executive summary
– Tables, figures, legends
– Reference lists
– Acknowledgements
Spring Term Assessment
Financial Management – Open assignment. This is worth 100% of your final mark for the module
This assignment is an individual project aimed at assessing your ability to understand key financial statements of a company, and its relevant performance, critically evaluate funding options based on this performance and engage in a discussion about the adoption of beyond budgeting techniques and processes.
Assessment preparation:
You should identify the Annual reports of a company that has the following characteristics:
a. The company is listed in the London Stock Exchange (LSE);
b. The company belongs to the following super sectors: Technology, Health Care, Real Estate, Automobiles and Parts, or Retailers.
Identify your preferred company form the LSE website: https://www.londonstockexchange.com/resources/trade-resources?tab=rules-and-regulations. After you have identified a company of interest, engage in online research to download and save the relevant annual reports of your company (including all appropriate financial statements) from 2018 to 2020 from the LSE. That is, three years of publicly available information.
Assessment details:
You are required to use the data found in the annual reports to compile a report that provides insights on the topics covered in the questions below.
Question 1:
Describe the main areas of your annual reports and elaborate on what these reports are communicating and to which key stakeholders. Justify the reason why each stakeholder might use these reports. Then, present the main financial statements in a compiled form as they appear in the annual reports. You can make use of the Appendix to place these statements.
Question 2:
Assess the financial performance of your selected company in four key areas: profitability, efficiency, liquidity and gearing. This assessment should be done over three years. You should prepare the main ratios for each area as follows:
· Profitability: Return on Capital Employed (ROCE), Operating profit margin, Gross profit margin and Return on Ordinary shareholders Funds (ROSF) ratios.
· Efficiency: Average inventories turnover period, Average settlement period for receivables, average settlement period for payables and Sales revenue to capital employed ratios.
· Liquidity: Current and Acid test ratios.
· Gearing: Gearing and interest cover ratios
Comment on the profitability, efficiency, liquidity and gearing of your selected company over the three years using these ratios. You should also justify changes (or stability) of performance from 2018 to 2020 using a combination of ratios and other income statement information.
Question 3:
You are now in a position where you know the most recent performance of your company. As all companies, your company is interested in engaging in various investment activities to expand, grow and survive in the long-term. However, to survive in the long-term, they also need to settle their short-term finances. Based on your data on question 1 and 2, identify and describe four possible funding options that your company can use at the moment. Consider two sources: internal and external. Identify two for each and justify their suitability and the main reason why your company can use such sources. Finally, critically evaluate these sources in light of your company’s characteristics.
Question 4:
Your company is willing to engage in Beyond Budgeting (BB) and abandon their problematic and laborious traditional budgets. You are an expert in the topic, and you are required to evaluate this decision for the company.
You are required to:
1. Evaluate the effectiveness of BB in modern organisations.
2. Identify and describe two possible BB techniques that your company can utilise.
3. Assess the suitability of these two techniques for your company by critically evaluating the selected BB techniques in light of your company.
Please see below for some suggested literature as a starting point. However, you should search and identify further appropriate academic literature to support your analysis in this question.
· Hope, J., & Fraser, R. (2003). Who needs budgets?. Harvard Business School.
· Bourmistrov, A., & Kaarbøe, K. (2013). From comfort to stretch zones: A field study of two multinational companies applying “beyond budgeting” ideas. Management accounting research, 24(3), 196-211.
· Libby, T., & Lindsay, R. M. (2010). Beyond budgeting or budgeting reconsidered? A survey of North-American budgeting practice. Management accounting research, 21(1), 56-75.
Format and Mark Allocation
Your assignment should be written in the format below and should be capable of being read as an independent and complete document. The following schedule sets out the main areas to be examined in your report:
1. Provide a brief introduction (around 250 words) which (10%):
a. Introduces your company briefly;
b. Sets out the aim and purpose of the report;
2. Break your main body into parts as advised by the questions provided and present your answers in parts (2,000 words):
a. Annual report analysis and financial statement presentation (15%)
b. Ratio analysis and comments (25%). To calculate the ratios in question 2, please refer to Appendix 1 of this document and use the table provided as a presentation format.
c. Sources of finance analysis (20%)
d. Beyond Budgeting discussion and evaluation (25%)
3. Draw a brief conclusion (around 250 words) (5%).
4. References: please remember to include, in the references, the hyperlinks of all the annual financial statements that you have used to calculate the ratios so we can verify your calculations. In this regard, figures used in ratios must be clearly cross referenced to the financial statements indicating company names, year, and page numbers. Please remember that any other information from any sources should be correctly cited
END OF ASSESSMENT TASK
Appendix 1
| Company name | Ratio Calculations | sources | ||||
| Ratio Name/Title | Definition/
Formulae |
2017 | 2018 | 2019 | Relevant Financial Statement | Page number of annual report located (year) |
| Operating profit margin | Operating Profit/Sales revenue | 300/800
=0.38 |
280/900
=0.31 |
310/850
=0.36 |
SofFP | Company name (2017), p. 120. |
| … | … | … | … | … | … | … |
Example Feedback Form
Module code: MAN00012M
Module Title: Financial Management
Page 1 of 2
Generic marking criteria
G1: Argument
G2: Structure
G3: Use of sources
G4: Referencing
G5: Presentation
Module specific learning outcomes relevant to this assessment
S1: Identify the principles of financial accounting, financial reporting, management accounting and financial management.
S2: Understand and critically evaluate the basis of preparation of financial statements.
S3: Acquire an understanding of company performance through the analysis of accounts.
S4: Understand the nature and purpose of a range of management accounting techniques.
S5: Understand and evaluate alternative sources of finance available to organisations.
Comments on assessment criteria:
The marker will insert feedback based on the generic marking criteria and module specific learning outcomes.
Suggestions for improvement:
Date:
Marker:
| Generic Assessment Criteria | |||||
| ARGUMENT inc CRITICALITY | STRUCTURE | USE OF SOURCES inc. QUOTATIONS | REFERENCING | PRESENTATION | |
|
1st 70-100 |
· Answers the question set fully and thoughtfully linking their answer to broader discussions in the discipline and/or developing new perspectives on the question
· Articulates a clear position on the issue · Presents a strong, focused argument, well supported by impressive analysis and evidence · The points being made are clear and convincing for the reader throughout the work |
· Has an engaging introduction that contextualizes the issue, states the subject and the focus of the work and line of argument that will be taken
· Has well-structured paragraphs, that have one main idea and strong supporting material · Has good links between paragraphs that result in work that flows well · Has a powerfully convincing conclusion
|
· Understood and integrated complex and/or theoretically sophisticated material into their own work.
· Demonstrated excellent independent research skills by sourcing additional scholarly material relevant to topic · Has used direct quotations only when absolutely necessary · Paraphrased sources well and integrated points into their own argument to good critical effect rather than describing position of others
|
· The reference format (in-text citation and Reference List) is used accurately throughout
· Formatting of Reference List correct
|
· No spelling or grammatical errors
· Appropriate tone and use of language · Correct punctuation
|
|
2:1 60– 69 |
· Answers the question set clearly and in sufficient detail
· Articulates a clear position on the issue · Presents an argument with relevant analysis and supporting evidence · The points being made are clear to the reader · Other perspectives on the issue are acknowledged even if criticality is not fully present |
· Has a clear introduction that states the subject and purpose of the work and line of argument that will be taken
· Has well-structured paragraphs that have one main idea and supporting material · Links between paragraphs are there but could be stronger · Has a clear conclusion which brings together the main points and answers the question
|
· Demonstrates understanding of arguments and esp. critiques found in source material & integrated them well into own argument.
· Has included additional material into their paper to strengthen analysis or broaden understanding · Good use of paraphrasing · Direct quotations used, but linked well to points being made
|
· The reference format (in-text citation and Reference List) is used accurately – except for a few minor errors of formatting
|
· One or two minor spelling and grammatical errors
· Appropriate tone and use of language · Correct punctuation
|
|
2:2 50- 59 |
· Mostly answers the question set– some irrelevance
· Presents a basic argument with some analysis but predominantly contains description / summary and little or no criticality · The points being made can be followed with some effort |
· Has an introduction that states the subject and argument of the work, but is not totally clear
· Has separate paragraphs that have one main idea and some supporting material · Some links between paragraphs work · Has a conclusion which repeats the main points |
· Demonstrates understanding of the arguments used in source material
· Has used and integrated the recommended reading well. · Tendency to be over-reliant on direct quotations rather than paraphrasing, breaking the flow of their writing and argument.
|
· The reference format (in-text citation and/or Reference List) has consistent and/or frequent errors |