Business Report on T-shirts Ltd: Financial Analysis, Budget Techniques, and Company Finance

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.

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.

You are a finance trainee for a company of Vests plc and have been asked by your marketing manager to review 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 current 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.

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

Business report with a title page, contents page and clear structure. It must be written in an appropriate business tone with appropriate Harvard reference where necessary. Note no introduction is required. No marks will be awarded for an introduction.

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 report.

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.

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.

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.

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

3.1. Define Budget and explain purposes of preparing a budget.

3.2. What might be the main benefits of forming a limited company and listing it on a stock exchange.

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

2.1 Accruals vs cash accounting

2.2 Profit vs Cash flows

Part 3: Budget and Company Finance

3.1 Meaning and Purposes of Budget

3.2 Benefits of forming a limited company and getting it registered on a stock exchange Appendices Supporting calculations Bibliography as required