Spring Term Assessment - Financial Management Open Assignment

Late Submission and Exceptional Circumstances Policy

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.

Full details of the Exceptional Circumstances Policy and claim form can be found here: 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.

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.

Word Count Requirements

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.

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 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 2017 to 2019 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

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: ROCE, Operating profit margin, Gross profit margin and 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 2017 to 2019 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.

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.