report on the past performance of Blue Ltd

The Assessment Task

You are to prepare a report on the past performance of Blue Ltd.  You will use the financial ratios set out below.  These are based on the Income

Statements and Balance Sheets of Blue Ltd and show the performance of Blue Ltd over the last three years of trading.

Financial years
2011         2012         2013

Fixed assets turnover ratio         2.1 times    2.3 times       2.5 times
Gross profit margin                19.0%        23.5%        28.6%
Administration expenses to sales         8.0%        5.3%        4.5%
Distribution costs to sales             7.0%        7.9%        12.9%
Net profit margin                9.9%        12.3%        11.1%
Current assets ratio (to 1)             1.43        1.66        1.42
Acid test ratio (to 1)                0.95        1.10        0.85
Mark up                    25%        26%        29.7%
Stock turnover ratio (times)        15.0        16.9        15.5
Trade collection period (days)        44        40        55
Trade payables period (days)        50        52        44
Return on capital employed        13.0%        15.4%        13.9%

Required:

You will prepare a report of approximately 2,000 words +/-10% which will be set out in four parts as shown below:

Part 1

Part 1 of the report is an introduction.  It should explain how business accounts can be interpreted and better understood through the use of

vertical analysis, horizontal analysis, trend analysis and ratio analysis.  (You should allow approximately 200 words).
(10% of marks)

Part 2

This part of the report should examine each financial ratio shown overleaf and explain the value and purpose of each using academic references where

appropriate.  (You should allow approximately 900 words).
(45% of marks)

Part 3

The report should evaluate and interpret the above ratios and provide a detailed analysis of the performance of Blue Ltd over the last three years

including consideration of any strengths and weaknesses identified.  (You should allow approximately 700 words).
(35% of marks)

Part 4

Finally, part 4 of the report should identify any other relevant business or market information that can be used in the appraisal of company

performance.  A full explanation should be given describing how items identified could have been used in the appraisal of Blue Ltd.  (You should

allow approximately 200 words).
(10% of marks)

Your report should include a bibliography listing all academic sources used which must conform to University requirements.  (The bibliography is not

included in the word count).

Learning outcomes

1. Identify the main features characterising the structure and content of financial information for organisations.
2.  Interpret a range of performance indicators to measure the financial performance and financial position of an organisation.

Total word count: 2,000 words equivalency

Assessment value: 50% overall mark for module

Deadline for Assessment:  12.00 noon on Thursday 13th February 2014

Students should submit their work by 12 noon on the deadline date electronically via Moodle. Please follow the ‘Assignment Submission’ link on the

module space and follow the on-screen instructions, paying particular attention to any specific instructions for each assignment. Please note that

you MUST submit your work as a Word document and include a cover/front sheet which has the following details written on it:
•     Module Title and Code
•     Module Leader and Seminar Tutor
•     Your student assessment number
Student work that does not have a cover sheet with this information on will not be identifiable after marking has taken place and risks being

recorded as a non-submission.

Presentation

•    Please word-process your work, using double spacing, on one side of the paper only
•    Use A4 paper
•    Please include a title page showing the title of your work, number of words, the module title and number, the name of your module tutor and

your assessment number
•    All references and bibliographies should be constructed using the APA System.  A handout on this system is available from Learning Resources.

Regulations:

•    It is important that you read the regulations associated with assessment.  These can be found on Moodle.
•    The regulation regarding the submission of late work applies, as does the procedure for citing mitigating circumstances and requests for an

extension to the hand in date.