Highlights
Learning Outcomes
On successful completion of this assessment, students will be able to:
a. Interpret financial statements and extract critical information to make business decisions
b. Critically analyse information that is used in managerial reports for internal reporting
c. Develop financial management knowledge imperative to managing a firm’s investments and resources
d. Analyse the financial industry and decisions from a corporate treasurer’s point of view
e. Evaluate factors that impact managerial decision making.
Part 1: Financial Statements
Part one 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 calculation. Some items could be interpreted in more than one way. State your assumption and calculate the value based on your assumption.
Section 1.1. Balance Sheet Construct a balance sheet for ABC Pvt Ltd for the year ended 30/06/2023 from the following list of accounts.
Section 1.2. Profit and Loss Statement Construct a profit and loss statement for ABC Pvt Ltd for the year ended 30/06/2023 from the following accounts
Section 1.3. Statement of Cash Flows Construct a statement of cash flows for ABC Pvt Ltd for the year ended 30/06/2023 from the following list of accounts.
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
Analyse ABC Pvt Ltd's 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
Answer the following three scenarios:
» Section 2.1. Features & Characteristics
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
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
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
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%).
» Section 3.2. Evaluation Measures Pros/Cons
For each project, discuss the evaluation measures pros and cons. You should include relevant references in your answer.
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