Assignment Brief
As part of the formal assessment for the HNC/D programme you are required to submit an assignment for each module. Please refer to your Student Handbook for full details of the programme assessment scheme and general information on preparing and submitting assignments.
After completing the module you should be able to:
- Understand the sources of finance available to a business
- Understand the implications of finance as a resource within a business
- Be able to make financial decisions based on financial information
- Be able to evaluate the financial performance of a business
Assignment Task One
In no more than 1,000 words, write a critical discussion, supported by academic literature, addressing the following for a listed company in Hong Kong:
a) Identify the potential sources of finance available and explain why financial planning is important.
b) Identify and evaluate both long term and short term sources of finance for a project implemented by a listed company. Offer definitions, and assess the advantages and disadvantages for each of the sources you identify and when each would be most appropriate.
c) Analyse the costs associated with different sources of finance and explain how these costs impact the financial statements.
d) Assess the information needs of three stakeholders - such as owners or financial institutions
Assignment Task Two
Aston Ltd is considering investing some of their capital in new premises. This will entail capital expenditure of some $1,000,000. This new project is set to last for ten years and is likely to attract the following budgeted inflows (money coming into the business) and budgeted outflows (money going out of the business):
|
Years
|
Cash Inflows
|
Cash Outflows
|
|
|
$'000
|
$'000
|
|
0
|
0
|
1000
|
|
1
|
110
|
30
|
|
2
|
120
|
35
|
|
3
|
130
|
40
|
|
4
|
140
|
45
|
|
5
|
150
|
50
|
|
6
|
160
|
55
|
|
7
|
170
|
60
|
|
8
|
180
|
65
|
|
9
|
190
|
70
|
|
10
|
200
|
75
|
Note the $1m in year 0 represents the initial capital expenditure.
The business is built up of both equity and debt, and in terms of this specific project it would be funded by $500,000 equity requiring 8% return, and $500,000 of debt requiring 12% return.
In no more than 1,000 words, and using the information above, complete the following:
a) Identify the Net Value or the Net Cash Flow (before applying the discount factor) of the project and also the Net Present Value (after applying the discount factor). Analyze and explain the advantages and disadvantages of the techniques adopted here.
b) Identify the Undiscounted Payback period and the Discounted Payback period and evaluate whether the pricing strategy that has generated the inflows is viable in this scenario
c) Assess whether Aston Ltd should continue with this project.
Ensure that where possible your answer is supported by academic sources.
Assignment Task Three
In no more than 1,500 words:
a) Identify and discuss the purpose of the two main financial statements shown below for a UK company Tesco plc.
b) Evaluate why different formats of financial statements are used for different types of business in UK.
c) Using the financial statements detailed below, for Tesco plc, calculate a series of profitability ratios and liquidity ratios, analyze and interpret the results that you achieve and comment on the company's performance.
| Year ended 22 February. 2014 |
Notes |
52 weeks 2014 £m |
52 weeks 2013 (restated)fm |
|
(embroil operations
|
|
|
|
|
Revenue
|
2 |
63557
|
63.406
|
|
Cost ogsaPes
|
|
(59,547)
|
(59,252)
|
|
Gross profit
|
|
4,010
|
4,154
|
|
Admingratiye expenses
|
|
(1,657)
|
(1482)
|
|
Profits asses aring on propertrelated items
|
|
218
|
(290)
|
|
Operating profit
|
|
2,631
|
2.382
|
|
Share et postiax profits djont ventures and associates
|
13 |
60
|
72
|
|
Finance income
|
5 |
132
|
120
|
|
Finance costs
|
5 |
(564) |
(517)
|
|
Profit before tar
|
3 |
2,259
|
2.051
|
|
Taiaion
|
6 |
(341)
|
(529)
|
|
Profit for the year from continuing operations
|
|
1,912
|
1,528
|
|
Discontinued operations
|
|
|
|
|
Loss 'of the year from discontinuted operation
|
7 |
(942)
|
(1.504)
|
|
Profit for the year
|
|
970
|
24
|
|
Attributable ter
|
|
|
|
|
Owner of the parent
|
|
974
|
28
|
|
Nen-controIng nterests
|
|
(4)
|
(4)
|
|
|
|
970
|
24
|
Group balance sheet
|
|
Notes
|
22 February 2014 fin
|
23 February 7013 fin
|
|
Non-current assets
|
|
|
|
|
Goodvnl and other ritan4bleassets
|
10
|
3,795
|
1362
|
|
nrcperty,ptantard etwOment
|
II
|
24,490
|
24870
|
|
hwesb-nent property
|
12
|
227
|
2,001
|
|
1r...fitments injont ventures and associauts
|
13
|
286
|
494
|
|
Other nvestments
|
14
|
1,015
|
818
|
|
Walt and advances to customers
|
17
|
3,210
|
2,465
|
|
Derivative (nand.); anuments
|
21
|
1,496
|
1,965
|
|
Deferred tax assets
|
6
|
73
|
58
|
|
|
|
34,592
|
37,033
|
|
Current assets
|
|
|
|
|
liwentories
|
IS
|
3,576
|
3,744
|
|
Tradeand other receivables
|
16
|
2,190
|
2,525
|
|
Loans and edam*. to
|
17
|
3,705
|
3.094
|
|
Dethethe Una/KW 'nstruments
|
21
|
80
|
58
|
|
Current tax assets
|
|
12
|
10
|
|
Short term arestments
|
|
1,016
|
522
|
|
Cash and ash equvants
|
18
|
2,5%
|
2,512
|
|
|
|
13,085
|
12,465
|
|
Assets of thedisposalgroup3rd non-currentassetsclassified as held for sale
|
7
|
2,487
|
631
|
|
|
|
15,572
|
13.096
|
|
Current I 'blades
|
|
|
|
|
Trade and other payables
|
19
|
(10,595)
|
(11,094)
|
|
Financial liablities:
|
|
|
|
|
Borronirgs
|
20
|
(1.910)
|
(766)
|
|
Derivatise fsncial :laments and other fabates
|
21
|
(99)
|
(121)
|
|
Cuuorner deposits and deposes from banks
|
23
|
(6.858)
|
(6,015)
|
|
Current tax labities
|
|
(494)
|
(519)
|
|
Pro/is:rim
|
24
|
(250)
|
(188)
|
|
|
|
(20.206)
|
(18,703)
|
|
liablees d the d. sposal group dash led as held for sale
|
7
|
(1,193)
|
(282)
|
|
Net anent labiities
|
|
(5,827)
|
(5,889)
|
|
Non-current liablides
|
|
|
|
|
Eh-iamb& liaba eies:
|
|
|
|
|
Batwings
|
20
|
(9,303)
|
(10,068)
|
|
Derivative &uncial intrumenh and other Eateries
|
21
|
(770)
|
(759)
|
|
Post-ernpSoyment benefit captions
|
26
|
(3,1%)
|
(2,378)
|
|
Deferred tax I abides
|
6
|
(594)
|
(1,006)
|
|
Pro/arms
|
24
|
(183)
|
072)
|
|
|
|
(14,043)
|
(4.483)
|
|
Net assets
|
|
14,722
|
16%1
|
|
Equity
|
|
|
|
|
Share capital
|
27
|
405
|
403
|
|
Share Inman
|
|
5,080
|
5,020
|
|
Allother reserves
|
|
(498)
|
685
|
|
Retaned earrings
|
|
9,728
|
10535
|
|
EquityattributeMe to owners of the parent
|
|
14,715
|
16643
|
|
Non-control nu interests
|
|
7
|
18
|
|
Total equity
|
|
14,722
|
16,661
|
References (via hkebsco in iLearn)
Marsh, Clive (2012) Financial Management for Non-financial Managers, In Strategic Success Series, London: Kogan Page.
Finch, Brian (2010) Effective Financial Management, In Creating Success. London :Kogan Page.
Vernimmen, Pierre (2011) Corporate Finance: Theory and Practice, 3rd ed. Chichester, West Sussex : John Wiley & Sons, Inc.
BTEC textbook
Davies, J., (2011), BTEC Level 4/5 HNC in Business
Other Reference books
Weetman, P. (2013) Financial and Management Accounting: An Introduction, Pearson
Lumby, S. and Jones, C. (2000) The Fundamentals of Investment Appraisal, Thomson Learning
Magazines, journals and newspapers
Accounting, Auditing and Accountability Journal
The International Journal of Accounting?
The Economist?
The Financial Times
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