MBL502 Finance for Managers Assignment 2 Questions and Answers

 

Assignment Details:

• Topic: Academic Analysis
• Document Type: Coursework
• Subject: Finance
• Number of Words: 3000
• Citation/Referencing Style: Harvard

 

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Part 1: Financial Statements

Part 1 consists of five sections to complete: balance sheet, profit and loss statement, statement of cash flows, ratios, and strategies. Complete all five sections. Please note:

• Although the statements are for the same company and same period, the values for some items may different between cash flow and P&L due to the timing of actual cash out/inflows.
• Some values in the statements will require
• Some items could be interpreted in more than one way. State your assumption and calculate the value based on your

 

Section  1.1. Balance Sheet

Construct a balance sheet for Acme Products Ltd for the year ended 30/06/2019 from the following list of accounts. All values are in $000.00.

Items	Value
Accounts Receivable	352.50
Accounts Payable	405.00
Bank Loan	480.00
Bank Overdraft	495.00
Cash	300.00
Corporate Bonds	645.00
Inventory	555.00
Land and Buildings	1815.00
Ordinary Shares	1035.00
Plant and Equipment	465.00
Preference Shares	390.00
Retained Earnings	??
Tax Liability	135.00
Vehicles	352.50

 

Section 1.2. Profit and Loss Statement

Construct a profit and loss statement for Acme Products Ltd for the year ended 30/06/2019 from the following accounts. All values are in $000.

Items	Value
Closing Inventory	385.50
Dividend Received	75.00
Interest	-40.50
Loss from sale ofmachinery	-15.00
Opening Inventory	408.00
Purchases	831.00
Rent	-123.00
Sales	1488.00
Tax	-15.00
Utilities	-85.50
Wages	-175.50

 

Section 1.3. Statement of Cash Flows

Construct a statement of cash flows for Acme Products Ltd for the year ended 30/06/2019 from the following list of accounts. All values are in $000.

Items	Value
Cash at the beginning of the year	405.00
Cash paid to suppliers	360.00
Cash received from customers	690.00
Cost of buying back shares	46.50
Dividend paid	39.00
Dividends received	13.50
Interest paid	18.00
Interest received	15.00
Payment of finance lease liabilities	72.00
Proceeds from issue of new shares	127.50
Proceeds from long-term borrowings	232.50
Proceeds from sale of plant, property andequipment	120.00
Purchases of plant, property and equipment	525.00
Repayments of long-term borrowings	36.00
Taxes paid	12.00
Wages paid	195.00

 

Section 1.4. Ratios

Calculate the following ratios based on the previous financial statements.

1. Quick ratio
2. Operating profit margin ratio
3. Return on equity (ROE)
4. Debt to equity ratio
5. Interest coverage ratio

 

Section 1.5. Financial Analysis (500 words)

Analyse Acme’s Products Ltd financial statements and ratios and provide five relevant strategies to make the company more profitable. You should include relevant references in your answer.

 

Part Two: Financing – Risk & Return

Consider the potential sources of financing for Acme Products Ltd. Answer the following three scenarios:

 

• Section 2.1. Features & Characteristics (500 to 600 words)

Identify five (5) features or characteristics one should consider when deciding upon potential financing sources. Provide a brief description of the features/characteristics and discuss why each is important.

 

• Section 2.2. Start-Up Firm Financing (500 to 600 words)

Identify three (3) sources of financing suitable for a start-up firm. Explain why these sources are appropriate for a firm at this stage of its lifecycle.

 

• Section 2.3. Growing-Expansion Firm Financing (500 to 600 words)

Identify three (3) sources of financing suitable for a growing expansion firm. Explain why each source is suitable for a firm at this stage of its lifecycle.

 

 

Part Three: Cashflow Estimation and Project Evaluation

 

Provide your recommendation on whether or not you would decide to approve the project or not move ahead with the project using the evaluation methods and calculated project evaluation values listed below.

 

• Section 3.1. Evaluate Measures (500 words)

For each five (5) project evaluation measures, indicate whether you would go ahead with the project and, if so, why have you made that decision. (The project will last for 5 years and the WACC is 8.9%).

Evaluation Method	Values	Would you go ahead with the project? (Yes/No)
NPV	-$53,542
PAYBACK	5.94 years
ARR	7.50%
PI	0.78
IRR	0.13%

 

• Section 3.2. Evaluation Measures Pros/Cons (500 to 600 words)

For each project, discuss the evaluation measures pros and cons. You should include relevant references in your answer.

SUGGESTED STRUCTURE

Your assignment may be structured in any way that best presents your research and thinking. However, the following structure can be used as a guide.

1. Cover or Title Page
2. Financial Statements
   1. Balance Sheet
   2. Profit and Loss Statement
   3. Statement of Cash Flows
   4. Ratios
   5. Financial Analysis Summary
3. Financing – Risk & Return
   1. Features and Characteristics
   2. Start-Up Firm Financing
   3. Growing-Expansion Firm Financing
4. Cashflow Estimation and Project Evaluation
   1. Evaluate Measures
   2. Evaluate Measures Pro/Cons
5. Reference Page (listed in alphabetical order)
6. Appendix, if needed

 

CONSIDERATIONS

• If you are having trouble with your financial analysis, financial ratios, cash flow evaluation, or project evaluation, your academic/instructor should be your first source for
• Have you included all the required elements for your financial analysis?
• Have you provided sufficient evidence and examples to support your reasoning and recommendations?
• Have you demonstrated the ability to integrate relevant findings, concepts, or theories in your assignment?
• Have you used a wide variety of sources? Consider using both academic and industry
• Does your assignment flow logically and sequentially?
• Have you met all specific formatting requirements?
• Does your assignment meet minimum length and reference requirements?