BM414 Financial Decision Making

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 Blackboard 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.

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 SKANSKA PLC. The financial performance evaluation will enable the potential investors decide whether to invest in this company.

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

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.

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.  

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.

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

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

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

Comment on the performance of SKANSKA PLC. results from and position between the two (2) years from (a), mentioning possible causes, reasons and effects for the changes in the ratios.