Reference no: EM133709625
Business Finance and Economics
Assignment task: The assignment covers economic factors that determine the competitive environment of an organization. The assignment involves the role and importance of accounting and financial reporting in terms of planning, control and decision-making. In addition, this assignment requires a numerical element that offers a solution to a set of key financial ratios and demonstrates an understanding of these in terms of organisational performance.
Learning outcome 1: Explain how micro- and macroeconomics impact on the competitive environment of an organisation;
Learning outcome 2: Demonstrate knowledge of the role of accounting within the organisation with respect to both reporting and decision-making aspects;
Learning outcome 3: Explain the structure and terms used within the main financial statements;
Learning outcome 4: Interpret management accounting techniques for planning, control and decision-making within the organisation;
Learning outcome 5: Calculate the main accounting ratios and explain their significance in terms of organisational performance.
Task requirements
To successfully complete this assignment, you are required to use the lecture materials from week 1 to week 4 and use references, including the core texts alongside other sources. Please ensure you use relevant theories, concepts, and formulas to address each of the four tasks.
Task 1
You are required to define the two major branches of economics and discuss how they influence business performance (700 words)
Task 2
You are to explain accounting conventions and evaluate how important are they in the preparation of the three major financial statements (600 words)
Task 3
Using the information from the given financial statements, statement of financial position (balance sheets) and income statement (profit & loss accounts) in page 3, calculate and interpret the following ratios for XYZ Plc for the years ended March 31 2019 and 2020, respectively:
Operating Profit Margin
Inventory days
Payable period
Receivable period
Acid Test Ratio
EPS (Earnings Per Share)
Task 4
Define management accounting and discuss why this is important for planning, control and decision- making within an organisation. (650 words)
Notes relating to the above Statements:
The market value of the shares of the business at the end of the reporting period was £3.00 for 2019 and £2.00 for 2020.
All sales and purchases are made on credit.
At 1 April 2018, the trade receivables stood at £250 million and the trade payables at £210 million.
A dividend of £40 million had been paid to the shareholders in respect of each of the years.
The business employed 14,000 staff at 31 March 2019 and 18,628 at 31 March 2020.
The business expanded its capacity during 2020 by setting up a new warehouse and distribution centre.
At 1 April 2018, the total of equity stood at £450 million and the total of equity and non-current liabilities stood at £650 million.