MSc Managerial Finance

 

Learning outcomes and pass attainment level:
• Enable students to develop a critical understanding of the main financial objective of the firm and the constraints which impact on that objective.
• Introduce students to the need for accounting information for management attention and to some basic concepts and ideas such as problem-solving, planning, control and decision-making
• Introduce students to the main theories and concepts upon which a firm’s investment and financing decisions are founded, and their applications in practice.
• To introduce students to the financial reports of various types of business entities, the use of accounting ratios, their interpretation and limitations
The assessment for this unit is this one coursework assignment. The required mark has been set at 50%.
This is an individual assessment requirement. There is no objection discussing the content and approaches to be adopted in the final submission you must make 100% your own work. Plagiarism and copying will not be tolerated and may lead to subsequent penalties being imposed.

There are three separate questions. All three questions must should be attempted and submitted together on numbered pages. Your answers should be prepared and submitted in Word format. Excel spreadsheets may be used but must be pasted into the Word document and not submitted separately. This should be carefully checked before submission for the use of appropriate and acceptable grammar. The correct use English spelling is to be employed throughout and no other. All submissions must be page numbered and contain your student ID number.
When determining the amount of effort and words for each section of the assignment it will be advisable to examine the weighting of the marks allocated to each question. If any part of the assignment is ignored then this reduces the maximum marks that could be potentially be earned.
The word limit to any potential narrative question in the third section will be a maximum of 1,500 words excluding the bibliography.
The assignment will require a considerable personal investment of time and effort. This is an individual assignment and all calculations, analysis and narrative submitted must be your own work.
The following matrix has been included to help guide you.
Section A Section B Section C
1a. Financial Analysis (40%) 2a/b Marginal cost statement &breakeven
(14%) 3a. Research Narrative (20%)
Fail Lack of breadth and depth of financial analysis techniques
Accompanied by incorrect formulae, calculation without explanation and poor layout Failure to produce a functionally analysed marginal cost income statement without identifying variable and fixed cost elements, contribution and overall contribution and profit. Provision of inaccurate intermediate calculations. Inaccurately determining the breakeven point by patient days without/inaccurate supporting calculations Failure to identify and contextualise contemporary CSR corporate practices. No evidence of credible research undertaken without a bibliography.
Inadequate coherence and poor structure and narrative with poor grammar
Bare Pass Evidence of some financial analysis techniques but with errors of formulae and calculation with insufficient explanation and adequate presentation Partially producing a functionally analysed marginal cost income statement identifying variable and fixed cost elements, contribution and overall contribution and profit containing errors. Unsupported by unclear and inaccurate intermediate calculations. Inaccurately determining the breakeven point by patient days with flawed supporting calculations. Partial identification and context of contemporary CSR corporate practices. Some limited evidence of research undertaken via corporate and academic sources with a limited bibliography.
Partial coherence and adequate structure and narrative with average grammar
Above Average Pass Wide range of financial analysis techniques evident supported by full disclosure of formulae and accurate calculation in clear format. Producing a functionally analysed marginal cost income statement identifying variable and fixed cost elements, contribution and overall contribution and profit. Supported by clear and accurate intermediate calculations. Accurately determining the breakeven point by patient days with supporting calculations. Identification and context of contemporary CSR corporate practices. Evidence of research undertaken via corporate and academic sources clearly referenced and cited in a bibliography.
Coherent and structured narrative with above average grammar
1b. Narrative Analysis (10%) 2c. Revised Marginal Cost Statement (8%)
Fail Not presented in business report format with no supporting appendices. Descriptive rather than analytical. Poor narrative structure and inadequate grammar lacking an overall knowledgeable synthesis Failure to produce a revised functionally analysed marginal cost income statement without identifying variable and fixed cost elements, contribution and overall contribution and profit incorporating contract changes. Provision of inaccurate intermediate calculations. Inaccurately determining the breakeven point by patient days without/inaccurate supporting calculations
Bare Pass Attempt at a business report format with some supportive appendices. Mainly descriptive with some attempt at synthesis. Grammar and structure being adequate. Partially producing a revised functionally analysed marginal cost income statement identifying variable and fixed cost elements, contribution and overall contribution and profit containing errors incorporating the new contract. Unsupported by unclear and inaccurate intermediate calculations. Inaccurately determining the breakeven point by patient days with flawed supporting calculations
Above Average Pass In business report format and coherently structured and supported by referenced appendices. Effectively synthesises the calculative narrative into an informed narrative Producing a revised functionally analysed marginal cost income statement identifying variable and fixed cost elements, contribution and overall contribution and profit incorporating the new contract. Supported by clear and accurate intermediate calculations. Accurately determining the breakeven point by patient days with supporting calculations
2c. Decision Making (8%)
Fail Limited/no evaluation and decision making based on inaccurate calculation for acceptance/rejection of the new contract unsupported by accurate financial and non-financial arguments
Bare Pass Partial evaluation and ambiguous decision based on flawed calculation for acceptance/rejection of the new contract partially supported by accurate financial and non-financial arguments
Above Average Pass Rationally evaluating and forming a decision making based on calculation for acceptance/rejection of the new contract supported financial and non-financial arguments.

 

 

 

 

 

 

 
MSc Managerial Finance Assignment June 2013

Q1
Presented below are the annual financial statements of The GAME Group Plc for the financial years 2009 to 2011.
Required:

Prepare a business report for the board of directors which analyses the performance of The GAME Group Plc over the financial period 2009-2011 by using the financial information provided in the appendices below.
(50% Marks)

 

 

 

 

 

 

 

 
Appendix 1
The GAME Group Plc
Statement of Comprehensive Position
as at 31st January 2011 2011 2010 2009
£000?s £000?s £000?s
Non-Current Assets
Intangibles 209,875 212,668 134,141
Property, plant and equipment 109,122 128,588 213,735
Deferred tax asset 3,647 3,614 4004
Total non-current assets 322,644 344,870 351,880
Current Assets
Inventories 149,915 176,045 181,965
Trade and other receivables 48,538 48,316 55,465
Cash and cash equivalents 151,243 86,128 139,614
Total current assets 349,696 310,489 377,044
Total Assets 672,340 655,359 728,924

Equity and Liabilities
Called up share capital 17,373 17,333 17,316
Share premium account 47,086 46,662 46,462
Capital redemption reserve 2248 2248 2248
Shares held in trust (3629) (3395) (6451)
Merger reserve 76907 76907 76907
Foreign exchange reserve 30295 27374 23454
Retained earnings 156,714 164,426 126,365
Total equity 326,994 331,555 286,301
Non -Current liabilities
Borrowings 15,559 23908 31847
Leases 9,718 10,048 8,328
Total non-current liabilities 25,277 33,956 40,175
Current liabilities
Borrowings 15,875 17,361 26,325
Trade and other payables 294,570 258,203 349,182
Leases 1,869 1,341 904
Tax liabilities 7,755 12,943 26,037
Total current liabilities 320,069 289,848 402,448
Total liabilities 345,346 323,804 442,623
Total equity and liabilities 672,340 655,359 728,924

 

 

 
Appendix 2
The GAME Group Plc
Statement of Comprehensive Income
for the year ended 31st January
2011 2010 2009
£000?s £000?s £000?s
Revenue 1625034 1772358 1968604

Opening Inventory 176045 181965 145041
Purchases 1171508 1273746 1491021
Closing Inventory 149915 176045 181965

Cost of Sales 1197638 1279666 1454097

Gross Profit 427396 492692 514507

Distribution costs and administrative 384188 397903 383626
expenses

Operating profit before exceptional 43208 94789 130881
items

Exceptional costs 14733 6199 6588

Operating profit after exceptional items 28475 88590 124293

Finance income 375 538 1805
Finance costs 5745 4917 8732

Profit before taxation 23105 84211 117366

Income Taxes 7452 23744 33716

Profit for the period 15653 60467 83650
attributable to owners of the company

Other comprehensive income 3328 3438 18897
Currency translation differences

Total comprehensive income 18981 63905 102547
for the period
attributable to owners of the
company

 

 

Q2

The Dr William Palmer (Private) Hospital in Staffordshire is organised into separate accountable units which offer specialised nursing care. Figures for the geriatric unit for 2012 are available and expansion of this unit for 2013 is being considered following the outsourcing of functions from the state provider the NHS (National Health Service).

During 2012 the geriatric unit charged patients £150 per patient per day for nursing care and £3m in revenue was earned. There was an agreement that for the year 60 beds would be available for the 365 days. The number of beds rented is regarded as bed capacity and this is agreed at the commencement of each year.

Costs of running the unit consist of allocated variable costs, fixed costs and direct staffing costs. The charges for variable costs such as catering and laundry are based on the number of patient days in hospital. Charges for fixed costs such as security, administration and rent are based on bed capacity (i.e. for 2012, 60 beds). Direct staffing costs are established from the personnel requirements applicable to particular levels of patient days.

The tables presented below shown the break-down of the variable, fixed and staffing costs applicable to the geriatric unit for 2012.

Variable Costs (based on patient days) £
Catering 450,000
Laundry 150,000
Planning 400,000
Fixed Costs (based on bed occupancy) £
Security 50,000
Administrative 650,000
Rent 750,000
Staffing costs

Each medical speciality recruits its own nurses, supervisors and assistants. The personnel requirements for the geriatric unit are based on the following:

Patient Days Supervisors Nurses Assistants
< 21,000 4 10 20
= 21,000 -23,000 4 13 24
= 23,000 4 15 28

The annual costs of staffing comprise:

Supervisors £20,000 each, nurses £15,000 each and assistants £10,000 each. These costs are considered to be fixed within the range of patient days given above.

 

 

 
The geriatric unit operated at 100% capacity for 120 days; in fact the demand on these days was for at least 20 beds more. So in 2013 an increase in the number of beds rented with appropriate charges is being considered.
Required

(a) Determine for 2012 the actual number of patient days, the total contribution and overall profit/loss by preparing a marginal cost comprehensive statement of income and,

(b) the break-even number of patient days for the geriatric unit.

(c) Determine for the following year 2013

i. The revised number of patient days
ii. Individual and overall contribution and profit and loss by preparing a marginal cost comprehensive statement of income
iii. The break-even position in patient days
.

Work on the assumption that 20 extra beds are contracted for the whole of the following year and they are fully occupied for 120 days. All other costs factors and occupancy remain the same apart from direct consequences of the change in patient days and beds.
(d) Comment on your findings from (a) and (b) offering advice to the management of the geriatric unit. This may be supported with additional relevant calculations

 

(30% Marks)

 

 

 

 

 

 

 

 

 

 
Q3

Companies are publishing substantial amounts of corporate social responsibility (CSR) and environmental information in various media such as stand-alone environmental reports, triple bottom line reports, sustainability and annual reports both in printed form and on the internet.

Critically discuss the drivers and motivations of companies to disclose this type of financial and non-financial information about their interactions with wider society and the environment.

 

(20% Marks)

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