Financial Performance Evaluation for Panini Ltd: A Report

Instructions for Electronic Submission of Assignment

This assignment must be submitted electronically by 2pm on the submission date

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An individual written assignment of 2,500 words maximum is expected. 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 Panini Limited. 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 themorganisation
3. Sources of finance
4. Demonstrate knowledge of the role of finance and accounting within the organisation with respectn to both reporting and decision-making aspects

Panini ltd is a medium-size business organisation specialised in making bread for super markets in the UK. The company started its operation in 2016. The company is planning to expand its operations due to success in recent years. The financial statements of Panini ltd are attached for your consideration and attention. 

Required

1.1 You are part of the Accounting and Finance team at Panini ltd. Write a report to the Management of Panini ltd, critically evaluating the importance of Accounting and Finance functions, duties and roles within a business organisation. (25 marks)

1.2 Discuss the various sources of finance available to small and medium company for expansion purpose (15 marks)

Using the financial statements of Panini ltd calculate the ratios highlighted on page 4 and comment on the company’s performance (50 marks)
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.

You will obtain marks for the following:

The functions/roles/duties of accounting and finance team within Panini ltd 25%
Sources of Finance 15%
Ratio calculation 16%
Interpretation and analysis of the Ratios in relation to Panini ltd performance 34%
Presentation of your work (report format, clarity of expression, referencing etc.) 10%

The summarised financial statements of Panini limited, a Public company engaged in making special bread for super markets, are shown below:

a. Calculate the following ratios for each of the two years:
(i) Gross profit margin
(ii) Operating profit margin
(iii) Return on capital employed
(iv) Current ratio
(v) Quick ratio
(vi) Inventory turnover days
(vii) Receivable collection period
(viii) Payable payment period  (16 marks)

b. Comment on the performance of Panini ltd results on the two years financial ratios calculated in part A above. your comment should include possible causes and reasons for changes in financial ratios over the two years.