Description
BUCKINGHAMSHIRE
NEW UNIVERSITY
Assignment Brief :Academic Year 2022-23
Module code and title : BM414 Financial Decision Making
Module leader : Rahat Kazmi
Muhammad Wajid
Assignment No. and type : CW2: Coursework (2500 words) Assessment
Weighting : 100%
Submission time and date : Friday 15th September 2023 before 2 pm
Target feedback time and date : 3 Weeks
Assignment task
Please note:
Skanska PLC is a Construction Company based in UK. Skanska PLC started back in 1984. The company is planning to expand its operations to other countries in Europe in the next ten (10) years. The financial statements of Skanska PLC. are attached for your consideration and attention.
You are advised to incorporate the suggested amendments/feedback you received from the module leader during assignment briefing.
Required
TASK 1 (1,500 WORDS)
You are part of the Accounting and Finance team at Skanska PLC. Write a report to the Management of Skanska PLC, critically evaluating the importance of Accounting and Finance functions, duties and roles within Skanska PLC. Your evaluation must include some examples within the Company where appropriate. (50 marks)
TASK 2 (1,000 WORDS)
Using the financial statements of Skanska PLC calculate the ratios required and comment on the company’s performance from an Investor with £1 million perspective. (40 marks)
Marks will be awarded for Structure and Presentation skills. Structure includes the orderly presentation of relevant material. In addition, the extent of research evidenced by the appropriateness and adequacy of in text referencing. There must be a Cover Page and Contents Page, paragraphs of Introduction, Conclusion and pages must be numbered. (10 marks)
Total marks 100
Task requirements
Task 1 – Required (50 marks)
The summarized financial statements of SKANSKA PLC, a Public company engaged in Construction, are shown below:
Statement of Profit and Loss
| For the year ended 31st Dec 2021 | For the year ended 31st Dec 2022 | |||
| £000 | £000 | £000 | £000 | |
| Sales Revenue | 4,800 | 6,000 | ||
| Cost of sales | ||||
| Opening inventory | 1,200 | 450 | ||
| Purchases | 2,700 | 4,800 | ||
| 3,900 | 5250 | |||
| Less: Closing inventory | (450) | (3,450) | (900) | (4,350) |
| Gross Profit | 1,350 | 1,650 | ||
| Operating expenses | (600) | (675) | ||
| Finance cost | (150) | (300) | ||
| Net Profit | 600 | 675 | ||
Statement of Financial position
| As at year ended 31st Dec 2021 | As the year ended 31st Dec 2022 | |||
| £000 | £000 | £000 | £000 | |
| Non- current assets | 2,955 | 6,000 | ||
| Current assets | ||||
| Inventory | 450 | 750 | ||
| Receivables – trade | 900 | 1200 | ||
| Prepayments | 90 | 105 | ||
| Cash | 75
|
1,515 | 15 | 2,070 |
| 4,470
|
8,070 | |||
| Issued share capital | 900 | 900 | ||
| Share premium account | 300 | 300 | ||
| Retained Earnings | 1,125 | 1,650 | ||
| 2,325 | 2,850 | |||
| Non – Current liabilities |
|
|||
| 10% loan notes |
|
1,500 | 3,000 | |
| Current liabilities | ||||
| Payables – Trade | 570 | 2100 | ||
| Accruals | 75
|
645 | 120 | 2,220 |
| 4,470 | 8,070 | |||
Task 2 – Required
- Calculate the following five ratios for each of the two years:
(i) Return on capital employed
(ii) Net profit margin
(iii) Current ratio
(iv) Average Receivable days/ Debtors collection period
(v) Average Payable days/ Creditors collection period (10 marks)
- Comment on the performance of SKANSKA PLC. results from and position between the two (2) years from (a), mentioning possible causes, reasons and effects for the changes in the ratios. (40 marks)
Submission details
This assignment is split into four parts:
From your report you will obtain marks for the following:
Presentation of your work (report format, clarity of expression, referencing etc.)………………………….10%
The functions/roles/duties of accounting and finance team within SKANSKA PLC with appropriate
examples………………………………………………………………………………………………………………………………40%
Ratio calculation…………………………………………………………………………………………………………………….10%
Interpretation and analysis of the Ratios in relation to SKANSKA PLC performance………………………..40%
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