Using Financial Data

Assessment Brief 7BUS2041 – Using Financial Data

Module Title:

Using Financial Data

Module Code:

7BUS2041

Assignment Format & Maximum Word count

INDIVIDUAL Report, 3000 words

Assignment Weighting:

60%

Coursework Submission:

Time:23.30Date:25thApril, 2022Method: Canvas

Coursework return Date returned to students:

23rd May 2022

Module leader

Dr Edna Stan-Maduka

First markers

Edna Stan-Maduka
John Malamatenios
Kwasi Afawubo
Stephen Perrin
John Walsh
David Onakanmi
Ghayda Nawres
Therese Durant
Jeremy Swane
Ray Cob
Dom Keating

Internal Moderator

Approved ☐Date:

Module Board name

PG Board B

External Examiner

Approved ☐Date:

Module Board date

1/6/2022

Assessment Criteria z

Learning Outcomes: Knowledge and Understanding tested in this assignment:

1. analyse accounting information (including both financial statements and management accounts) and formulate appropriate recommendations or conclusions
2. interpret key financial performance indicators and be able to use this information to formulate future plans
3. design organisational strategies to enable the creation and maintenance of value
4. evaluate the financial requirements of a business or project and advise on the financing choices available to organisations (including the relevance of capital structure and the rewards expected by providers of finance).
5. evaluate financial and operating risks (both domestic and international) faced by organisations and the strategies for mitigating those risks 6. appraise corporate governance and ethical issues which might arise in relation to accounting and financial management.

Learning Outcomes: Skills and Attributes tested in this assignment:

7. advise financial and non-financial managers on financial issues
8. recommend and present ideas confidently and effectively on financial issues
9. determine and apply a range of alternative techniques to monitor and manage business performance

Feedback /Marking criteria for this Assignment

Performance will be assessed using bespoke grading Criteria and Mark scheme developed in the module.Guidance for improvement will be given in writing on the Assessment Feedback Form or on the StudyNet Feedback Form within 4 weeks of submission.
For each day or part day up to five days after the published deadline, coursework relating to modules submitted late will have the numeric grade reduced by 10 grade points until or unless the numeric grade reaches 50 for level 7 (PG). If a submission is more than 5 working days after the published deadline, a grade of zero will be awarded. Where the numeric grade awarded for the assessment is less than 50 for level 7, no lateness penalty will be applied;

Detailed Brief for Individual/ Assessment

Assignment Title: Business Performance Evaluation
Description of the assignment:This report will be testing the ability of students to evaluate business performance using financial, risk and corporate governance data.

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7BUS2041 Using Financial Data
Coursework Brief
Gentry Electronics has enjoyed tremendous sales growth during the last 10 years, however, even though sales have steadily increased, the company’s CEO, Erica Harding, is concerned about certain aspects of its performance. She has called a meeting with the corporate controller and the vice presidents of finance, operations, sales, and marketing to discuss the company’s performance. Erica begins the meeting by making the following observations:
We have been forced to take significant write –down on inventory during each of the last three years because of obsolescence. In addition, inventory storage costs have soared. We rent four additional warehouses to store our increasingly diverse inventory. Five years ago, inventory represented only 20% of the value of our total assets. It now exceeds 35%. Yet, even with all this inventory, “stockouts” (measured by complaints by customers that the desired product is not available) have increased by 40% during the last three years. And worse yet, it seems that we constantly must discount merchandise that we have too much of. “We have to employ one of these fresh finance graduates to enable us manage this problem. All I want is determine a way to make our problems less obvious and ensure the bank does not call back its loans. As it stands now, we seem to be heading towards losses and I am not willing to report a loss in any circumstance. We must manage our situation and avoid attention of the board and financiers. We have to be proactive and ensure finance will never be a problem in expanding our business.
Jeff who is a manager shares Erica’s concerns and how it will affect their strategic positioning. The business planned to extend their operations to three countries in the next two years and make public offering of their shares. He is worried that this current problem will affect their ability to attract investors and build an international business. To alleviate his fears, Jeff has advised the board of directors to invite investors and fund provider to boost their financial position before the IPO. He has also recommended that the company proactively start trading in foreign currency to build a currency base for the planned international expansion even though they are not sure when that will materialise and not authorised to trade foreign currency. “It does not matter when we expand or if we ever do. All we need to do is to make our shareholder believe we are expanding, and the foreign exchange trade and inflow will convince them. The key thing is for us to attract investors and raise our capital base, even though I don’t know how we will do that”.
Erica’s suggestion has been accepted and you have been employed as chief finance officer in Gentry Electronics. You have now been tasked to use the following financial data in evaluating the current situation with the company and make suggestions on the organisational strategies which will enable the creation and maintenance of value for Gentry. Your response should be presented in the form of a report covering the five questions below as sections of the report.

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Data (£millions)

2021

2020

2019

2018

Inventory:

Raw Materials

242

198

155

128

Work in progress

116

77

49

33

Finished goods

567

482

398

257

Total inventory

925

757

602

418

Current assets

1800

1423

1183

841

Total Assets

2643

2523

2408

2090

Current Liabilities

600

590

525

420

Sales

9428

8674

7536

6840

Cost of goods sold

6,328

5,474

4,445

3,557

Net profit

754

987

979

958

Compute the current ratio, gross profit ratio, net profit margin ratio, inventory turnover days and Quick/Acid test for the four years.
(10marks)
From the ratios calculated in (a) above, and information contained in the case, is there justification for Erica’s concerns? Discuss the problems, implications, and potential causes of the changes in the ratios over the four years.
(20marks)
As the newly employed chief finance officer in Gentry Electronics, discuss potential remedies to problems discussed in (b) above and how each suggestion will alleviate Erica’s fears or improve the performance of the company.
(20marks)
Discuss two possible concerns Erica Harding and the management of Gentry Electronics will possibly raise regarding your suggestions in (c) above and offer two alternative sources of finance for Gentry?
marks)
Discuss two financial and operational risks Gentry may face if all suggestions provided by Erica and Jeff are adopted. Discuss two possible corporate governance or ethical issues which might arise in relation to ideas presented by Erica and Jeff.
(20 marks)
Please note that 5marks each (total of 10marks) will be awarded for your structure/presentation and your conclusion. Please see the marking grid given to you for details/guidance on expectation for both.
Note: Please keep your ratio calculations as an appendix to the report. Use only the information in the main report
Submission requirements:
You should use Arial font size 12 and 1.5 line spacing. Please do not exceed the word count.
The hand-in deadline for submission is 23.30 on 25thApril 2022.
Reports submitted more than 5 days late will attract a mark of zero.
Please submit your work as an electronic copy via Studynet/Canvas with your ratio calculations as appendix. Remember the ratio calculations are assessed and carry 10 marks, so non- submission will mean loss of marks.
This is an individual assignment and the report submitted should be entirely your own
work.
This assessment is subject to anonymous marking, please do not put your name on any
document you submit. You submission must have a cover page with your student registration number (SRN) on it.
Exceeding the stated word count will attract a penalty on 5marks on the total mark achieved.
Report Format
You should present your evaluation of this case as a report clearly having an introduction, good/ clear sectioning, and conclusion. Please use the questions as a guide to the sections. Please use the module embedded academic English support on writing reports.
Please see the assignment section of the module Canvas website for further information on the requirements of the assignment and advice on how to put your report together.
Student Support and Guidance
For further help, contact your module leader in their drop-in hours or by email.
Use the Grading Criteria and Mark Scheme to help improve your work.
Go to CASE workshops, use the CASE website and drop-in hours www.studynet.herts.ac.uk/go/CASE/
Academic English for Business support is available through daily drop-ins from the CASE office. See the CASE workshop timetable on the CASE main website page for details.
Make full use of Library search to identify relevant academic material and the ‘Subject Toolkit for Business’ which contains links to other Information Databases and the Information Management contact details. (http://www.studynet1.herts.ac.uk/ptl/common/LIS.nsf/lis/4DAF5390094771C2802575ED004212BF)
Tutors allow students to test their work using Turnitin. Guidance on submission to Turnitin via StudyNet can be found by using the following link. http://www.studynet1.herts.ac.uk/ptl/common/asu.nsf/resource+library/TURNITIN+FOR+STUDENTS+2016+USER+GUIDE.pdf/$FILE/TURNITIN+FOR+STUDENTS+2016+USER+GUIDE.pdf

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