LO1: Formulate appropriate, measurable financial objectives and review financial performance against targets, using appropriate ratios to assess the performance of a company and to identify potential corporate financial failure.

BMM5412 Financial Management

Assessment Brief

 

Course/Programme:

 

Level:

5

Module Title:

Financial Management

Module Code

BMM5412

Module Leader:

TBC

Assignment title:

Individual Written Assignment

Assignment number:

BMM5412C5L5SEP23

Weighting:

100% of overall module grade

Word Count

3000 Words

Date given out:

Wednesday 8th November 2023

Submission date:

Wednesday 6th December 2023 at 12 noon

Eligible for late submission (3 days, with penalty)?

Saturday 9th December 2023 at 12:00 noon, 5 marks shall be deducted for each day.

Method of submission:

 

Online only

 

Turnitin Submission

Special instructions for submission (if any):

Only PDF or Word document is accepted by the Turnitin.

Date for results and feedback:

Friday 5th January 2024

Learning outcomes assessed

LO1. Formulate appropriate, measurable financial objectives and review financial performance against targets, using appropriate ratios to assess the performance of a company and to identify potential corporate financial failure.

LO2. Appraise the management of working capital in a company and maximisation of returns to shareholders, including an explanation and evaluation of company dividend policy.

LO3. Explain and evaluate investment appraisal techniques, using appropriate techniques to identify the optimal investment with and without capital rationing.

LO4. Critically evaluate alternative sources of finance for operations and development and calculate an appropriate cost of capital for an organisation to use with discounted cash flow techniques.

 

 LO5. Investigate the ‘finance function’ in corporate management and governance, signposting areas of weakness in financial management, monitoring or control and formulating strategies for remediation.

 

Assignment: Individual Written Assignment

The main objective of the assignment is to assess your understanding of the five learning outcomes of the module. To pass the assignment, you must demonstrate your basic understanding of financial management by completing all the five tasks set out below.

To complete the assignment, you are required to find a most recent financial year’s annual report of a public listed company. The listed companies’ annual reports are easily accessible from the selected company’s website under Investor relations. The annual report should be included in the appendix.

Tasks: Individual Written Assignment: 3000 words

Task 1. Using the information from the annual report, briefly describe the business activities, address, mission, vision, and the financial objectives of the company.

You are required to review the company’s financial performance against set financial targets using various financial ratios such as: profitability, efficiency, liquidity, financial gearing, and investment ratios.

Explain how the measuring financial health (performances) of the company helps in identifying potential corporate financial failure.

 

Task 2. Explain the term ‘working capital’ and provide a critical assessment of working capital management of the selected company for the last two consecutive years. What are the major elements of working capital? Describe the working capital cycle. What is Operating cash cycle (OCC)? How can the company reduce it? Why is effective working capital management important for the financial success of the company?

You also need to explain how the dividend policy of a company may affect working capital management of a company.

Calculate the value of an ordinary share in the company, using one of these methods; the net assets method, the P/E ratio method or the free cash flow method.

You are expected to use the relevant indicators including some numerical calculations to support your analysis.

Task 3. Explain the following:

-       the term ‘capital rationing in optimising investment’

-       explain the nature and importance of investment decision making.

-       Identify and critically evaluate major investment appraisal techniques

Calculate ROI.

There are basically four methods used by businesses to evaluate investment opportunities: accounting rate of return (ARR); payback period (PP); net present value (NPV); internal rate return (IRR).

Imagine, that the owners of the chosen company are going to buy the second company. It costs

£800,000. They estimate that it will produce an inflow after operating costs of £170,000 a year for 10 years. If the opportunity cost of capital is 14%, what is the net present value of the company? What will the company be worth at the end of five years?

Task 4. Critically evaluate (explain with advantages and disadvantages) various sources of finance for businesses with examples by calculating the cost of capital using ‘discounted cashflow method’ for the sources chosen.

Task 5. “Poor corporate governance can result in corruption, negligence and fraud; This may lead to poor business growth, customer complaints, and high levels of waste.” Identify and explore ‘corporate governance’ of a chosen organisation and highlight the weaknesses in financial management, monitoring and control of business practices and suggest remedial measures for improving corporate governance.

Suggested Structure and Marking Guidance

Suggested

structure

To include

Weightage/

Word count

Introduction

Explain Financial Management with a definition and differentiate between

‘accounting and finance’. Then explain the scope (areas covered) of this assignment and how you structured this assignment.

15% weightage

450 words

Financial Performance measurement through financial ratios.

·       Briefly describe the business activities, address, mission, vision, and the financial objectives of the company

·       Review the company’s financial performance against set financial targets using various financial ratios such as: profitability, efficiency, liquidity, financial gearing, and investment ratios.

·       Explain how the measuring financial health (performances) of the company help in identifying potential corporate financial failure.

(15%)

weightage 450 words

Working Capital Management and Dividend Policy.

·       Explain the term ‘working capital’ and provide critical assessment of working capital management of the selected company for the last two consecutive years.

·       What are the major elements of working capital? Describe the working capital cycle. What is Operating Cash Cycle (OCC)? How can the company reduce it?

·       Why effective working capital management is important for the financial success of the company.

·       Also explain, how the dividend policy of a company may affect working capital management of a company.

·       Calculate the value of an ordinary share in the company, using one of these methods; the net assets method, the P/E ratio method or the free cash flow method.

·       You are expected to use the relevant indicators including some numerical calculations to support your analysis.

(15%)

weightage 450 words

 

Investment decision and investment appraisal

·       Explain the concept of ‘capital rationing’ in optimising investment.

·       Explain the nature and importance of investment decision making.

·       Identify the four main investment appraisal methods in practice.

·       Using the given scenario calculate ROI

(15%)

weightage 450 words

Sources of Finances for a business

·       Critically evaluate (explain with advantages and disadvantages) various sources of finance for businesses.

·       Calculate the cost of capital using ‘discounted cashflow method’ for the financial sources chosen by an organisation and explain the advantages and disadvantages of the sources of finances chosen.

(15%)

weightage 450 words

Corporate Governance

·       Explore (investigate) the concept of ‘corporate governance’.

·       Identify the corporate governance practices of a firm and highlight weaknesses in financial management, monitoring, and control of business practices of a chosen organisation and suggest some remedial measures for improving corporate governance.

(15%)

weightage 450 words

Conclusion

·       Summarize the key findings of your report and the importance of those findings to the various stakeholders.

·       Based on the analysis, identify weaknesses in financial management, make recommendations and propose strategies to remedy the

situation or increase the company`s profitability

10% weightage

300 words

Reference list

·       Include a list of minimum 3 references used in the report in the appropriate APA referencing style.

·       You must add the annual report of the company in the Appendix of your report.

NOT included in the word count

Total

 

3,000 words

Marking criteria:

Your assignment will be anonymously marked and graded on the following criteria:

·       Arithmetical accuracy and presentation to standard accounting format.

·       Interpretation and use of case study material to inform and support your explanations.

·       Correct use and application of accounting terminology, accounting concepts and assumptions

·       The relevance of your answer to the tasks.

·       The structure and development of analysis and evaluation.

·       The standard of written presentation – including spelling, grammar, and syntax.

Assessment Guidance

Work should be professionally presented as a Report, which should put forward structured

arguments, which are supported by referenced sources throughout and using examples to illustrate your discussion.

The module`s overall grade relies solely on this assignment. In order to meet the required criteria, your Report must consist of 3,000 words (+/- 10%). Remember to double space your work, include page numbers, an introduction and a conclusion, and provide evidence to substantiate your claims while adhering to the LTU APA Referencing format for in-text citations and reference list. It is essential to keep the consistency in referencing styles. It is also essential to cite academic journals, textbooks, and websites in addition to industry publications to ensure a comprehensive review. Ensure that the reader can follow your information sources and understand how you know the information you present.

·       Your writing should maintain a formal tone throughout and be word processed with an ideally legible font such as Times New Roman, Arial, or a similar style, with 12-point font size.

·       Avoid first person ‘I’ or ‘we’. Use passive instead. E.g., I think = It could be argued / I asked people to… = Participants were invited to…

·       Avoid contractions (e.g., don’t, it’s, isn’t) = do not, it is, is not

·       Be precise (e.g., way - method, thing - object, person – participant)

·       Avoid run on expressions (etc., and so on)

·       Avoid subjective language (e.g., nice, incredible, awesome. Be objective instead / relate to objective criteria = useful, appropriate, helpful)

·       Use clearly referenced supporting evidence (in text / reference list)

·       Use support to evidence lines of argument and opinions. This evidence can consist of examples (from practice), statistics, or the referencing of research and theoretical work of others in the field. The evidence is used to support the line of argument, this is often carried out using an argument/counter-argument structure.

·       Sources of information must always be clearly referenced, both in-text and in a reference list at the end. So that the reader can locate the source of this information. for themselves (See APA referencing guide). Not referencing or insufficient referencing is referred to as plagiarism and is strictly forbidden.

·       It is mandatory that a student will use the course textbook plus 1 other academic source as well as news or other sources relating to the assignment.

·       Diagrams should be used where appropriate

Plagiarism

Plagiarism is a form of cheating which involves presenting another person’s ideas or expressions without acknowledging the source. The penalties for this are severe. Extensive and repeated instances can result in your removal from the degree programme. It is therefore very important that you understand how to avoid being accused of plagiarism. Any work submitted for assessment must, unless collaborative work has been specifically permitted in the assignment guidelines, be your own work. Any material used, from whatever source, must be clearly acknowledged. Any words that are not your own should be shown as quotes and their author and publication details given. Where you paraphrase the words of another you should make this clear and give details of where you found this material.

You should make use of the referencing guidelines on the library website and complete the online plagiarism tutorial to ensure that you are providing such details correctly https://library.leedstrinity.ac.uk/apa-referencing-guide. Doing so will gain you marks for showing evidence of research and the ability to reference. Not doing so could lead to accusations of plagiarism. You can also use Turnitin in advance of the deadline to enable you to check for elements of plagiarism in your work and then correct these (although this does not apply in the case of online quizzes).

As is a form of dishonesty that is viewed by the University as a serious offense. The University’s Regulations contain provisions by which the Examination Board may penalize students who are found to have presented plagiarised work for assessment. The purpose of this statement is to explain what plagiarism is. Further information about the procedures that are followed where allegations of plagiarism are made, together with the penalties that may be imposed, can be found in the above Regulations.

Plagiarism consists of presenting someone else’s work as your own. Some examples of plagiarism

are:

  • reproducing or paraphrasing published material without acknowledgment of the source
  • copying from the work of another student
  • undeclared collusion with another student
  • getting someone else to do your work for you

This is not an exhaustive list. There are clearly degrees of plagiarism, particularly where published work is concerned. At one extreme there may be a very short section of a coursework which is copied without being properly referenced; at the other extreme a coursework may consist almost entirely of copied work.

Students who are found to have colluded in making their work available to be copied by others will not themselves be deemed to have committed plagiarism but will be dealt with under the student disciplinary procedures described in the Students’ Handbook of Regulations. Similarly, disciplinary action will be taken against any student who is found to have undertaken a coursework on behalf of another.

As with all assignments, this will be discussed, and additional guidance will be provided during seminar sessions and tutorials

Essential Reading

Jones, M. (2013), Accounting, 3rd Edition: Wiley

McLaney, E. & Attrill, P (2019) Accounting and Finance for Non-Specialists. 11th edition, Pearson Fortes, H. (2010) Accounting Simplified. FT Prentice Hall 

Suggested Reading 

Atrill, P., & McLaney, E. (2016) Accounting and Finance: An Introduction, 8th edition, London: Pearson

Drury,C. (2016) Management Accounting for Business, 6th edition, Cengage

Dyson,J., & Franklin, E (2017) Accounting for Non – Accounting Students, 9th edition, London: Pearson

Horner, D. (2017) Accounting for Non-Accountants, 11th edition, Kogan: Page

Lewis, L. D. (2012) The Power of Accounting: What the Numbers Mean and How to Use Them, London: Routledge

Marchant, K., & Van der Stede, W. (2017) Management Control Systems, 4th edition, London: Pearson

Periodicals

The Financial Times (FT)-LTU library will help log into your account. The Economist, The Wall street Journal

You may find all of the above at the Library including website https://lib.leedstrinity.ac.uk and phone number 0113 2837244, etc.

www.accounting-simplified.com

You are advised to subscribe to the following free Accounting and Financial Management newsletters and updates, via their websites.

Accounting WEB Accounting Insight News Student Accountant ACCA www.accountingweb.co.uk

www.accountex.co.uk www.accaglobal.com (also offers an app)

Assessment Format and Submissions

Assessment submissions are done online, via the relevant module page on Moodle. The assessment format for this Component will be in a Word file format (.docx) or PDF. Once the assignment is completed, it should be submitted online via the relevant Moodle Turnitin module page, where it will be run through the Turnitin system. After submission, a confirmation email will be sent, and the status of the submission can be checked on the relevant module page.

Penalties for Late Submissions:

· If you submit coursework after the given deadline, or agreed deadline extension, your submission will be marked as a fail.

· If you submit coursework after the given deadline, you may also ask that we excuse your lateness. We will consider such requests in accordance with the Mitigating Circumstances Policy and Procedure. The tests we will use are:

· your late submission was for a good reason, and

· you could not reasonably have asked for an extension before the deadline.

In any event, coursework submitted more than five days after the original deadline, or any agreed extension, will not be marked, and will be counted as a failure. This helps us to keep track of all the work that has to be marked and returned to students.LO1: Formulate appropriate, measurable financial objectives and review financial performance against targets, using appropriate ratios to assess the performance of a company and to identify potential corporate financial failure.

Marking Scheme / Criteria

Internal examiners, within a programme team, are responsible for the setting, internalmarking and internal moderation of assessments – they may standardise, first mark, sample and double mark assessments. First markers must provide, for each piece of work presented for assessment, comments outlining the reasons for the mark awarded. Internal examiners submit marks to the Assessment Panel responsible for the module concerned.

Assignment Criteria/Marking Schemes/Marking Criteria

·       Coursework is marked by internal examiners against the focused assignment (or assessment) criteria, the marking scheme and the marking criteria, as defined within the assignment brief.

·       Examinations are marked by internal examiners against the focusedassessment criteria, the marking scheme and the generic marking descriptors

We will assess your achievement of the learning outcomes for the programme in each year. Programme schemes will set out the assessment framework. This will take one of the following forms:

a.     Assessment associated with each module individually; combined to form an overall judgement.

b.     Integrated assessments associated with all the material covered.

The relevant Assessment Panel will consider your results and the marks to beawarded.

 

If you fail an assessment, you may resit the assessment once.

 

 

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