BFIN 200: Principles of Financial Management - Corporate Financial Performance - Report Writing Business Finance Assignment Help

Assignment Task:

PLEASE READ CAREFULLY:     
Summer 2, 2020 – BFIN 200 – Online Mid-term Exam 20% – Rules and Guidelines 
• Log in to Moodle at least 15-20 min prior to the start of the exam. To start the exam, click on the “Zoom Class” icon on Moodle. 
• This exam is 1 hr 20 min long (or 80 min in total). After a short introduction, the exam starts at 14:40 and ends at 16:00 on Monday, 27 July. 
• You have a 15 min submission grace period after the exam ends, or until 16:15 to submit your exam answers into a folder on Moodle called “Midterm Student Scripts”. 
• No scrap paper or additional notes will be accepted and/or graded after 16:15. All your work without exception must be submitted before the 16:15 cut-off time. However, you can resubmit your work as many times as you wish before 16:15.     
• As per the UD guidelines, you will NOT be given extra time to complete your exam. Do NOT use the 15 min submission grace period to continue writing the exam answers. You risk forfeiting your entire exam, if the system closes, and your exam paper cannot be submitted as a result. No extensions and no excuses here, please.  
• You will receive your exam paper by email 5 min prior to the start of the exam (at 14:35). There are different versions of the exam, where each student has a distinct exam. Choose the version with your name on it. If you solve someone else’s exam paper, your exam will NOT be graded, and you will receive zero marks for it.  
• You may ask questions in the first 20 min of the exam ONLY. 
• You are NOT allowed to seek help from any person or device during the exam. If it is suspected that this exam is NOT an entirely own work of yours, your will receive zero marks.
• Your exam is video recorded from start to end. By agreeing to take the exam, you agree to the video recording.
• If you experience any issues (e.g., health or technical) during the exam, clearly mention this during the exam itself AND send an email briefly stating the same to the instructor. Any issues reported after the exam ends at 16:15, will not be taken into consideration.    
• Your microphone must remain ON (unmuted), and your camera needs to be ON for the entire duration of the exam. You may NOT use your mobile as a camera. If your camera switches off during the exam or you lose connection, you will be referred to the Online Exams Disciplinary Committee. You may NOT take any breaks during the exam. You may NOT leave your exam venue before 14:50. 
• There are 4 questions in the exam – a mix of theory and calculations. Each question is worth 5 marks. You need to answer all questions.

• CALCULATION questions:
o You will need to show all your workings, formulas, notes, calculations, along with the final answer. You will receive zero marks for that question (or part of it) otherwise. 
o Do NOT copy answers from Excel. You will receive zero marks, if you do so.
o Marks will be lost if you do NOT round all numbers to two decimal points or show appropriate units of measurement that go along with the numerical answer (for example: $, %, times, years, days, kgs, meters, etc.).    
o The formula sheet is at the back of the exam paper. You may not need to use all the formulas given.  

• THEORY questions:
o There is no defined word limit. You can write as many sentences as you wish as long as you have answered the questions. Do not write more than the question is asking you to. In most cases, you will not need > 3 sentences to answer a theory question.   
o Your answers to theory questions will automatically be submitted to Turnitin (PlagScan) at 16:15 with the aim of detecting plagiarism.If the percentage of matching in Turnitin > 25%, you will receive zero marks for that question. 

• TYPE YOUR EXAM ANSWERS and submit them as ONE Word file (with no photos/images in it) into a folder on Moodle called “Midterm Student Scripts”. Moodle will not accept your work, is it not Word AND if you are submitting more than one file. The ONLY way to submit your exam is via MOODLE. No email submissions. 
• You can practice submitting a sample file into a folder on Moodle “MOCK EXAM SUBMISSION” (closes on 27 July 14:30). 
• If your file isa Macro-Enabled Word Document, Moodle will not accept it. To change the file type in Windows, go to “File” → “Save As” → Choose location on PC → Create “File Name” and “Save as type”: Choose “Word Document” OR “Word 97-2003 Document”. Do NOT save your exam as a Macro-Enabled Word Document – Moodle will not accept it.Accepted file format: 
o Word 2007 document [.docx]
o Word document [.doc]
SUGGESTION:  Since you can resubmit your exam as many times as you wish before 16:15, try submitting your draft exam file way before 16:15 and see if Moodle is accepting it. This will give you enough time to fix the file format and submit your exam on time. 
• No submissions after 16:15 are accepted by Moodle as the system closes at 16:15. There is nothing that can be done once you have missed the deadline. You will receive zero marks for the exam if that happens.  
• Please DRESS ACCORDINGLY for the exam and have appropriate surroundings, suitable for an exam environment. No student will be allowed to write the exam from the bathroom or while lying in bed. Wishing you all a pleasant and confident exam experience!   
• There will be a CLASS AFTERWARDS, which starts at 16:30 and ends at 17:30. 
 
Question 1
a. Explain the concept of a modern agency problem. Discuss whether it can be eliminated. If so, how? If not, why not?  
Agency problem occur when there is a conflict of interest between the management of the company and it stock holders. No, we cant eliminate such problem but we can reduce it by comparing mangers and giving them incentive packagepulse the CEO in hierarchy must be different from there must be financial report approved from the CFO.

b. Highlight and discuss any TWO similarities between a partnership and a proprietorship.
They are both easy to start require less effort to open business and expand. They are both taxed once as personal income not like others forms where it requires double taxation.

c. Critically evaluate the purpose of the Sarbanes-Oxley Act that has forever changed the face of corporate accountability.
Discuss the significance and implications of this act for the affected form(s) of business organization.

Sarbanes Oxley is a law which has been implemented to audit the financial practices of public companies and protect all people, employees and shareholders from frauds. It is a must to provide and certify the company's financial reports by the CEO & CFO and any violations may be considered as criminal issue. this law has created more control over the company and minimized any type of financial crimes.

a. Explain the following statement: “While the balance sheet can be thought of as a snapshot of a firm’s financial position at a point in time, the income statement reports on operations over a period of time.”               (1 point)
Balance sheet is considered as a snapshot or a photo. You can record the balance sheet every day because the assets, liabilities and owner equity keep changing from time to time due to buying and selling assets. Income statement is like a video about the company's performance for a period of time. It shows what is the company’s status in a period of time regarding selling a product, revenues and expenses

b. Outline and discuss any TWO differences between a normal corporation and an S-corporation.
Corporation has many shareholders unlike Small corporation where their shareholders not more than 100. Corporation is taxed double from the net income and dividends whereas Small corporation is taxed in their personal income only.
 
Question 2    
• The Volvo Company is an established American multinational automaker that has its main headquarters in Detroit, USA. 
• It was founded by Henry Michigan and incorporated on June 16, 1919 and had ever since been selling automobiles and commercial vehicles under the Volvo brand to the world. 
• The UAE has been one of Volvo’s most loyal customers since the 1980’s.
• You work as a financial analyst and have recently been placed onto an assignment with the Volvo Company.
• According to the most recent financial statements, the Volvo Company has reported a net loss of $3,900. 
• The firm’s earnings before interest, tax, depreciation &amortization are positive and amount to $20,000. 
• The amount of debt outstanding that the company has borrowed from the HSBC bank at the 10% interest rateis $14,000. 
• The applicable corporate tax rate used by the Volvo Company is 35%.
• In answering the questions below, show all the formulas used and calculations, along with the final answer. 
net lost = (3,900) $    EBITDA= 20,000 $   I=1,400 $   tax = 35%

a. Calculate the amount of taxesthat the Volvo Corporation owes to the taxation office.             
Explain what this means for the company.
(2,100) $ that mean it will be Tax credit, that the GOV will support the company next year

b. Determine the level of the company’s pre-tax profit.
(6000) $

c. Calculate the amount annual interest expense that the Volvo company owes to HSBC.
1,400 $

d. Estimate the level of the company’s operating profit.
(4,600) $

e. Calculate the level of the firm’s depreciation and amortization expense.
24,600 $ 

Question 3        
• You are the CFO of a company called Wonderland Enterprises. Unfortunately, the firm’s headquarters (where all the records are kept) have recently been destroyed by fire. So, your task is to recreate the cash flow statement for the year that has just ended. 
• The firm originally had $3,400 in the bank at the end of the prior year (i.e., beginning cash), and its net working capital accounts, except cash, remained constant during the year.  
• The company earned $9,100in net income during the year and but only paid $4,900 in dividends to its common shareholders.
• During the year, Wonderland Enterprises had sold $3,700worth of machinery and $7,500 worth of land, which are no longer needed in the firm’s operations.
• You have just been spoken to the firm’s accountants and learnt that the annual depreciation expense for the year is $1,200. 
• Finally, you have discovered that the firm has obtained a bank loan from the Emirates Islamic Bank for the amount of $2,400. 
• To answer the questions that follow, place your responses in the templates provided below.
beginning cash = 3,400 $NWC= 0   PPE= 11,200  $      D= 1,200 $    N/P= 2,400 $    net income= 9,100 $    dividends = (4,900) $

Question 4    
• You work as an analyst in the finance department for the Bravo Corporation. 
• The company has been listed on the Abu Dhabi Stock Exchange (ADX) since 27July 2010. 
• The business operates in the Basic Materials sector and is involved with the discovery, development and processing of raw materials to be used in the construction of residential and commercial buildings in the GCC region. 
• This week, you have received a request from the firm’s finance manager to assess its liquidity and cash position.  
• You have access to the following financial statement information for the company:

a. Calculate the number of the company’s days in receivables outstanding in Year 2020.                 
If the average industry number of days in receivables outstanding is 10, explain whether the company is doing better or worse than the industry. Why yes or why not? Explain your answer. 
What is your recommendation to the company’s management?
DRO= A/R / (sales / 365) = 320 / (7,700 / 365) = 15.16 Days 
the number of days is 15.16  more than the AVE in industry 10 days to get back cash 
we can give promotion to the customers to pay early and get discount . 

b. Calculate the number of the company’s days in inventory outstanding in Year 2020.                     
If the average industry number of days in inventory outstanding is 65, explain whether the company is doing better or worse than the industry. Why yes or why not? Explain your answer. 
What is your recommendation to the company’s management?
DIO= inventory /(COGS / 365 ) = 350/ ( 1,700 / 365 ) = (75.14) days, it mean we the company the inventory staying for long time before it get sold and fill it again .

c. Calculate the number of the company’s days in payables outstanding in Year 2020.         
DPO= A/P / (COGS / 365)= (96.61) days            
If the average industry number of days in payables outstanding is 80, explain whether the company is doing better or worse than the industry. Why yes or why not? Explain your answer. 
What is your recommendation to the company’s management?
The company taking long time to pay their suppliers compare with the Aver of the industry , that will lead the supplier will trust the company again and they have to mange to pay on time.

d. Determine whether the Bravo Corporation needs to borrow money to finance their business in Year 2020.
Support your answer with both an explanation and calculations.

CA = 320 + 120 = 440 
CL = 450 + 360 = 810
Quick ratio = CA / CL without inventory = 440 / 810 = 0.5 
we don’t have enough asset to cover CL because its less than 1 and we can’t rely on the inventory to be sell.

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