Finance for Business Managers Module code: BMMB7005D

For this assignment, you will be conducting a variety of financial analysis and preparing two (2) business reports, outlining your analysis and recommendations and one presentation. The breakdown of the assignment is as follows:

Part Description

Report Length

Weight

Financial Statement Analysis and Presentation

2,000 words

40%

Financial Statement Presentation

Presentation 10 min.

10%

Greenfingers, Plc. Investment Programme

2,000 words

50%

 Part 1 – Financial Statement Analysis and Presentation

For Part 1 you will be calculating and evaluating the financial management of a company.

1. Select a publicly-trading company. Download its most recent annual report(s), including financial statements for the past 2 years. You may select your own company or employer. Include the financial statements in the appendix of your business report.

2. Conduct a financial analysis by calculating a variety of profitability, liquidity, efficiency, and solvency ratios. Ratios should be calculated for a minimum of the past 2 years. Include the selected ratio calculations in the appendix of your business report.

Profitability Ratios

Liquidity Ratios

Efficiency Ratios

Solvency Ratios

1.

Gross Profit Margin Ratio

1.

Current Ratio

1.

Accounts Receivable

1.

Debt Ratio

2.

Operating Profit Margin

2.

Quick Ratio

Turnover

2.

Equity Ratio

Ratio

3.

Cash Ratio

2.

Accounts Payable

3.

Debt to Equity Ratio

3.

Net Profit Margin Ratio

Turnover

4.

Interest Coverage Ratio

4.

Return on Assets (ROA)

3.

Asset Turnover Ratio

5.

Return on Capital

4.

Capital Turnover Ratio

Employed (ROCE)

5.

Inventory Turnover Ratio

6.

Return on Equity (ROE)

6.

Working Capital Turnover

Ratio

3. Critically evaluate the calculated ratios and prepare a business report discussing your analysis. You should explain possible reasons for changes in ratios over the time period your selected. In addition, you should discuss the limitations of your ratio analysis.

4. Make several recommendations on how to improve the financial management of your selected company based on your ratio analysis.

 Financial Statement Presentation

1. Create a presentation (audio or video) summarising the contents of your report. The maximum length should be 10 minutes.

 Part 2 – Greenfingers, Plc. Investment Programme

For Part 2, you will evaluate three investment options and propose how an investment programme might be financed for Greenfingers, Plc. Write a business report for Greenfingers’ Directors explaining whether the company should undertake the project or look for other opportunities. The business report should incorporate the following information:

1. An evaluation of the three investment options using the net present value (NPV) technique, assuming the cost of capital to be 6%. (You are required to show all of your calculations.). Identify which option you would recommend and provide a detailed explanation supporting your recommendation.

2. Based on your recommendation, calculate the approximate internal rate of return (IRR). (You are required to show all calculations).

3. Interpret your results including:

a. Include theoretical arguments for the choice of net present values and the best method for investment appraisal.

b. Explain the continued popularity among decision-makers of non-discounting methods of investment appraisal.

c. Identify what other factors should be considered before an investment decision is made.

4. If funds are limited to £2,500,000 and the projects are divisible, (i.e., it is possible to undertake a fraction of a total project), calculate the optimal investment policy and the resulting total NPV from your investment policy.

5. Provide your recommendations to the Greenfingers, Plc Directors how the proposed investment programme might be financed by identifying the main sources of available financing. Additionally, include the main advantages and disadvantages of each finance source.

 Greenfingers, Plc. Scenario

Greenfingers Plc., who produce a variety of high-quality outdoor rattan furniture and associated items, is considering whether or not to invest to expand the business. The directors have identified three main options for a four-year plan:

A. Expand its flourishing retail outlet to include all products.

B. Launch an eCommerce site to generate internet sales.

C. Produce greenhouses and conservatories

These three options would require an initial expenditure of (A) £650,000, (B) £1,100,000, or (C) £1,800,000.

The most recent estimates on year-end cash flows is as follows:

Year 1

Year 2

Year 3

Year 4

£’000

£’000

£’000

£’000

(A)

300

400

450

500

(B)

500

550

700

950

(C)

500

800

1050

1200

Assume corporation tax is 25% and capital allowances are 25% on a straight-line basis. All of these cashflows occur in the year that they arise. 

GUIDANCE FOR STUDENTS IN THE COMPLETION OF TASKS

 NOTE: The guidance offered below is linked to the five generic assessment criteria overleaf.

1. Engagement with Literature Skills

Your work must be informed and supported by scholarly material that is relevant to and focused on the task(s) set; you should make use of scholarly reviews and primary sources, as appropriate (for example, refereed research articles and/or original materials appropriate to the discipline).    You should provide evidence that you have accessed a wide range of sources, which may be academic, governmental and industrial; these sources may include academic journal articles, textbooks, current news articles, organisational documents, and websites.  You should consider the credibility of your sources; academic journals are normally highly credible sources while websites require careful consideration/selection and should be used sparingly.   Any sources you use should be current and up-to-date, mostly published within the last five years or so, though seminal/important works in the field may be older.  You must provide evidence of your research/own reading throughout your work, using correctly a suitable referencing system, including in-text citations in the main body of your work and a reference list at the end of your work.

 Guidance specific to this assessment: Application and critical discussion of the various techniques and methods used to assess the performance of a business and capital appraisal models and the sources of finance available. As a guide a minimum of 25 credible sources should be provided.

2. Knowledge and Understanding Skills

At level 7, you should be able to demonstrate a systematic understanding of knowledge, and a critical awareness of current problems and/or new insights, much of which is at, or informed by, the forefront of your academic discipline, field of study or area of professional practice, with a comprehensive understanding of techniques applicable to your own research or advanced scholarship. Your work must demonstrate your growing mastery of these concepts, principles, current challenges, innovation and insights associated with the subject area.  Knowledge relates to the facts, information and skills you have acquired through your learning.  You demonstrate your understanding by interpreting the meaning of the facts and information (knowledge). This means that you need to select and include in your work the contemporary concepts, techniques, models, theories, etc. appropriate to the task(s) set.  You should be able to explain the theories, concepts, etc. meaningfully to show your understanding.  Your mark/grade will also depend upon the extent to which you demonstrate your knowledge and understanding; ideally each should be complete and detailed, with comprehensive coverage. 

Guidance specific to this assessment: Research the various techniques and methods used to assess the performance of a business and capital appraisal models and the sources of finance available.

3. Cognitive and Intellectual Skills

You should be able to: evaluate critically current research and advanced scholarship in the discipline; evaluate methodologies and develop critiques of them and, where appropriate, to propose new hypotheses; deal with complex issues both systematically and creatively to make sound judgements in the absence of complete data. Your work must contain evidence of logical, analytical thinking, evaluation and synthesis. For example, to examine and break information down into parts, make inferences, compile, compare and contrast information.  This means not just describing what! But also justifying: Why? How? When? Who? Where? At what cost? At all times, you must provide justification for your arguments and judgements.  Evidence that you have reflected upon the ideas of experts within the subject area is crucial to you providing a reasoned and informed debate within your work.  Your choice of methodologies to gather data and information must be rigorously defended. Furthermore, you should provide evidence that you are able to make sound judgements and convincing arguments using data and concepts.  Sound, valid, persuasive conclusions are necessary and must be derived from the content of your work.   Where relevant, alternative solutions and recommendations may be proposed.

Guidance specific to this assessment: Provision of coherent, structured analysis and conclusions based upon the content provided. Following on from the analysis and conclusions a set of recommendations which address the issues/problems raised in the report covering financial performance and capital project decision(s).

4. Practical Skills

At level 7, you should be able to demonstrate originality in the application of knowledge, together with a practical understanding of how established techniques of research and enquiry are used to create and interpret knowledge in the discipline. This includes acting autonomously in planning and implementing tasks at a professional or equivalent level, originality in tackling and solving problems, and decision-making in complex and unpredictable contexts or situations.

You should be able to demonstrate mastery of the leading edge subject-related concepts and ideas as they relate to real world situations and/or particular contexts.  How do they work in practice?  You will deploy models, methods, techniques, and/or theories, in those contexts or circumstances, to assess current situations, perhaps to formulate plans or plausible, justifiable recommendations to solve problems, or to propose new models, or to create artefacts, which may be innovative and creative, thereby demonstrating your understanding of how the boundaries of knowledge are advanced through research and/or application.  This is likely to involve, for instance, the use of real world artefacts, examples and cases, the application of a model within an organisation and/or benchmarking one theory or organisation against others.  

Guidance specific to this assessment: Use of the range of ratios and their trends to provide comprehensive comment and analysis of the financial performance, covering the following five areas of Profitability; Liquidity: Efficiency: Investment and Gearing. The results of the above ratios should be linked in order to provide a comprehensive review of financial performance. Research and apply appropriate capital appraisal techniques, and sources of finance available.

5. Transferable Skills for Life and Professional Practice

Your work must provide evidence of the qualities and transferable skills necessary for postgraduate-level employment in circumstances requiring sound judgement, personal responsibility and initiative in complex and unpredictable professional environments.  This includes demonstrating: the independent learning ability for continuing professional development to advance existing skills and acquire new competences of a professional nature that will enable you to assume significant responsibility within organisations; that you can initiate and complete tasks, projects and procedures, whether individually and/or collaboratively, to a professional level; that you can use appropriate media to effectively communicate information, arguments and analysis in a variety of forms for a variety of audiences; fluency of expression; clarity and effectiveness in presentation and organisation. Work should be coherent and well-structured in presentation and organisation.

Guidance specific to this assessment: Structure and presentation of a professional report (follows conventions in terms of layout and appropriate sections including correct spelling, grammar, punctuation, flow of narrative/fluency, coherence.

     STUDENT FEEDBACK FORM

 This section details the extent to which the assessment criteria are demonstrated by you, which in turn determines your mark. The marks available for each category of skill are shown. Lecturers will use the space provided to comment on the achievement of the task(s), including those areas in which you have performed well and areas that would benefit from development/improvement.

Generic Assessment Criteria

Marks available

Marks

awarded

1. Engagement with Literature Skills

.

15

2. Knowledge and Understanding Skills

20

3. Cognitive and Intellectual Skills

30

4. Practical Application Skills

30

5. Transferable Skills for Life and Professional Practice

5

Assessment Mark (Assessment marks are subject to ratification at the Exam Board.  These comments and marks are to give feedback on module work and are for guidance only until they are confirmed. )

Late Submission Penalties (tick if appropriate)

%

Up to 1 week late (50% Max)

Over 1 week late (0%)

GENERIC ASSESSMENT CRITERIA

Level 7

In accordance with the Framework for Higher Education Qualifications, at the end of Level 7 students should be able to demonstrate: a systematic understanding of knowledge, and a critical awareness of current problems and/or new insights, much of which is at, or informed by, the forefront of their academic discipline or area of professional practice; a comprehensive understanding of techniques applicable to their own research or advanced scholarship; originality in the application of knowledge, together with a practical understanding of how established techniques of research and enquiry are used to create and interpret knowledge in the discipline; conceptual understanding that enables the student to evaluate critically current research and advanced scholarship in  the discipline to evaluate methodologies and develop critiques of them and, where appropriate, to propose new hypotheses. They will be able to deal with complex issues both systematically and creatively, make sound judgements in the absence of complete data, and communicate their conclusions clearly to specialist and non-specialist audiences.  They will demonstrate self-direction and originality in tackling and solving problems, and act autonomously in planning and implementing tasks at a professional or equivalent level to continue to advance their knowledge and understanding, and to develop new skills to a high level. They the qualities and transferable skills necessary for employment requiring the exercise of initiative and personal responsibility; decision-making in complex and unpredictable situations/professional environments; and the independent learning ability required for continuing professional development.

Level 7

FAIL

FAIL

MARGINAL FAIL

SATISFACTORY

(Pass)

GOOD to VERY GOOD

(Merit)

EXCELLENT

(Distinction)

EXCEPTIONAL

(Distinction)

Category

0-29%

30-44%

45-49%

50-59%

60-69%

70-84%

85-100%

Engagement with literature (including current research, referencing,

academic conventions and

academic honesty) 

Little or no evidence of reading and/or reliance on inappropriate sources.

Views and findings mostly unsupported and non-authoritative.

Referencing conventions used incoherently or largely absent.

Poor engagement with essential reading. No evidence of wider reading. Reliance on inappropriate sources, and/or indiscriminate use of sources. Heavily reliant on information gained through class contact. Inconsistent and weak use of referencing.

Engagement with a very limited range of relevant and credible sources. Some omissions and minor errors.

Referencing conventions evident though not always applied accurately or consistently.

Engagement with an appropriate range of research-informed literature, including sources retrieved independently. Some over-reliance on texts. Referencing may show minor inaccuracies or inconsistencies.

Engagement with a wide range of research-informed literature, including sources retrieved independently.

Selection of relevant and credible sources.  Very good use of referencing, with no/very few inaccuracies or inconsistencies.

Engagement with an extensive range of relevant and credible literature, informed by the latest research. Consistently accurate application of referencing.

Exceptional engagement with an extensive range of relevant and credible literature, informed by the latest research. High-level referencing skills consistently and professionally applied.

Knowledge and understanding (A systematic, conceptual understanding of knowledge, and a critical awareness of current problems and/or new insights, much of which is at, or informed by, the forefront of the discipline; a comprehensive understanding of techniques applicable to their own research)

Major gaps in knowledge and understanding of the subject matter is not systematic. Substantial inaccuracies. No awareness of current problems, insights or the latest research and/or advanced scholarship within the discipline.

Gaps in knowledge, with only superficial systematic understanding. Some significant inaccuracies and/or irrelevant material.  No critical awareness of current problems, insights, or latest research within the discipline.

Limited knowledge and systematic understanding of the concepts and principles within the subject area, which to some marginal extent, is informed by current research and scholarship. Some critical awareness of current problems and/or new insights, but often under-developed.

Knowledge is accurate and reasonably detailed. A systematic understanding of the field of study informed by, to some extent, current research and scholarship, A critical awareness of current problems and/or new insights though this may be under-developed occasionally.  

Knowledge has a well-defined focus, which is reasonably extensive, coherent and detailed, with a critical awareness of current problems and/or new insights.  Exhibits good understanding of the breadth and depth of contemporary and established views, and the work is, at least in part, well-informed by current research and scholarship.

Excellent mastery of a complex and specialised area of knowledge. A systematic, excellent understanding of the concepts of the subject informed by current research and scholarship. Highly critical awareness of current problems and/or new insights. A critical, awareness of how the boundaries of knowledge are advanced through research.

Exceptional mastery of a complex and specialised area of knowledge. An exceptionally critical awareness of current problems and/or new insights. An outstanding understanding of the concepts of the subject, well-informed by current research and scholarship. A critical, sophisticated and nuanced awareness of how the boundaries of knowledge are advanced through research.

Cognitive and intellectual skills

(Critical evaluation of current research and methodologies and develop critiques of them and, where appropriate, to propose new hypotheses; make sound judgements in the absence of complete data.)

Wholly or almost wholly descriptive work. Little or no evaluation or critique or attempt at a systematic approach.

Failure to develop arguments, leading to illogical or invalid judgements. Unsubstantiated generalisations, made without use of credible evidence.

Largely descriptive work, with superficial use of critical evaluation of research and methodologies. Absent or weak development of hypotheses and judgements. Information accepted uncritically, uses generalised statements made with scant evidence and unsubstantiated opinions. Ideas sometimes illogical and contradictory.

Limited attempt at critical evaluation/ critique of current research and methodologies, tending towards description.

Limited attempt to propose new hypotheses. Can deal with complex issues but not systematically or creatively. Some evidence to support emerging judgements but these may be underdeveloped or with a little inconsistency / mis-interpretation.

May assert rather than argue a case.

Some critical evaluation/ critique of current research and methodologies, though slightly underdeveloped in places, Proposes adequate but limited new hypotheses, where relevant. Can deal with complex issues but not fully systematically or creatively. Ability to make judgements based on data (that may be incomplete) but with some tendency to assert/state opinion rather than argue on the basis of reason and evidence.

Sound critical evaluation/ critique of current research and methodologies, Proposes new hypotheses, where appropriate. Can deal with complex issues systematically and with some creativity. Ability to make sound judgements based on data (that may be incomplete)

Excellent critical evaluation/ critique of current research and methodologies, Proposes innovative hypotheses, where appropriate. Can synthesise complex issues systematically and creatively. Ability to investigate contradictory or incomplete information and make strong, persuasive, arguments and sophisticated judgements. 

Exceptional critical evaluation/ critique of current research and methodologies, Proposes innovative hypotheses, where appropriate. Exemplary systematic and creative synthesis of complex issues.  

Ability to investigate contradictory or incomplete information and make strong, persuasive, arguments and sophisticated, nuanced, judgements. Potential for journal publication or doctoral research.

Practical skills

(Originality / creativity in the application of knowledge, tools and techniques and in tackling and solving problems in complex and unpredictable professional situations; practical use of established techniques of research and enquiry to create and interpret knowledge in the discipline.)

Limited or no use of methods, materials, tools and/or techniques.

Little or no appreciation of the context of the application.

Limited understanding of the application of theory to practice or making appropriate links between the two.

Very weak problem-solving skills in complex and unpredictable contexts.

Rudimentary application of methods, materials, tools and/or techniques but without consideration and competence. Flawed appreciation of the context of the application.

Weak understanding of the application of theory to practice, with only occasional evidence of making appropriate links between the two. Weak problem-solving skills in complex and unpredictable contexts.

An awareness and mostly appropriate application of well-established methods, materials, tools and/or techniques, with occasional errors.

Basic appreciation of the context of the application. Theoretical knowledge and understanding applied in practice, but not always making logical links between the two.

Can identify problems and propose basic solutions without fully appreciating the complexity of unpredictable contexts.

An appropriate application of standard methods, materials, tools and/or techniques.

Clear appreciation of the context of the application. Mainly consistent, accurate and logical application of theory to practice, making appropriate links between the two.

Can identify problems and propose mostly appropriate solutions in complex and unpredictable contexts, with elements of originality.

A very good application of a range of methods, materials, tools and/or techniques.

Very good consideration of the context of the application, with perceptive insights. Can identify problems and propose appropriate solutions in complex and unpredictable contexts.

Evidence of originality and creativity.

An advanced application of knowledge, methods, materials, tools and/or techniques.

The context of the application is well considered, and insightful.

Can identify complex problems and propose excellent solutions. An excellent grasp of techniques applicable to own research or advanced scholarship.

Shows originality in application of knowledge and techniques, and of how established techniques of enquiry create and interpret knowledge in the discipline.

Exceptional application skills in complex, unpredictable, contexts, drawing skilfully on the latest research within the discipline. Can identify complex problems and propose sophisticated, original solutions.

An outstanding application of techniques applicable to own research or advanced scholarship.

Shows originality in application of knowledge and techniques, and of how established techniques of enquiry create and interpret knowledge in the discipline with assimilation and development of cutting edge processes and techniques.

Transferable skills for life and professional practice

(Exercise of self-direction, autonomy and personal responsibility; plan and implement tasks at a professional level; independent learning; use appropriate media to communicate effectively and professionally to a variety of audiences; fluency of expression; systematic approach; clarity and effectiveness in presentation and organisation.)

Communication medium is inappropriate or misapplied.

Work is poorly structured, disorganised and/or confusingly expressed. Very weak use of language and/or very inappropriate style. Little or no evidence of autonomy (or collaboration, where relevant) in the completion of tasks. Little or no evidence of the skills required in professional, postgraduate employment.

Communication medium is poorly designed and/or not suitable for the audience.

Work is poorly presented in a disjointed manner. It is loosely, and at times incoherently, structured, with information and ideas often poorly expressed. Weak use of language and/or inappropriate style. Weak independent initiative (or collaboration, if relevant). Limited evidence of the skills required in professional, postgraduate employment.

Can communicate in a suitable medium but with some room for improvement.

Mostly ordered presentation and structure in which relevant ideas / concepts are reasonably expressed. Work may lack coherence in places. Can work as part of a team, but with limited involvement in group activities.

Demonstrates some but not all of the basic skills required in professional, postgraduate employment, with some areas of minor weakness.

Can communicate effectively in a suitable format, but may have minor errors.

Mostly coherent, organised work, in a suitable structure and is for the most part clearly expressed. Can work effectively independently and/or as part of a team, with clear contribution to group activities.

Demonstrates the skills required in professional, postgraduate employment, with some areas of strength and some of minor weakness.

Can communicate well, confidently and consistently in a suitable format.

Work is coherent, fluent, well-structured and organised. Can work very well autonomously and/or as part of a team, with a good contribution to group activities.

Demonstrates comprehensive professional, postgraduate employment skills.

Can communicate professionally confidently and consistently in a suitable format.

Work is coherent, very fluent and is presented professionally. Can work autonomously with initiative. Where relevant can work professionally within a team, showing leadership skills as appropriate, managing conflict and meeting obligations. Demonstrates excellent professional, postgraduate employment skills and a strong appetite for further development.

Can communicate with an exceptionally high level of professionalism.

Work is remarkably coherent, very fluent and is presented professionally. Can work outstandingly well and professionally within a team, showing advanced leadership skills. Demonstrates exemplary professional, postgraduate employment skills and a strong appetite for further development.