Reference no: EM135404
Q1
Vodafone Group Plc is a British multinationalwhich is one of the world's largest mobile telecommunications companieswith over 404 millionsubscribers. Vodafone owns and operates networks in over 30 countries and has partner networks in over 40 additional countries. Vodafone also owns 45% of Verizon Wireless, the largest mobile telecommunications operator in the USA. Vodafone has a primary listing on the London Stock Exchange and is a constituent of the FTSE 100 Index. It had a market capitalisationof £89.323 billion as of 5th April 2013 when its share price stood at 182.6p
Presented below are its financial statements for the period 2008-2012.
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Vodafone Group Plc
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Year ended
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Year ended
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Year ended
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Year ended
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Year ended
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Statement of Comprehensive
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31st March
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31st March
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31st March
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31st March
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31st March
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Income
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2012
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2011
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2010
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2009
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2008
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£m
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£m
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£m
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£m
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£m
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Revenue
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46,417
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45,884
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44,472
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41,017
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35,478
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Cost of sales
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-31,546
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-30,814
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-29,439
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-25,842
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-21,890
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Gross profit
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14,871
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15,070
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15,033
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15,175
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13,588
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Selling & Distribution Costs
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-3,227
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-3,067
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-2,981
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-2,738
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-2,511
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Administration Expenses
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-5,075
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-5,300
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-5,328
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-4,771
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-3,878
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Share of result in associates
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4,963
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5,059
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4,742
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4,091
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2,876
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Impairment losses
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-4,050
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-6,150
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-2,100
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-5,900
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0
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Other income and expense
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3,705
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-16
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114
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0
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-28
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Operating profit
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11,187
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5,596
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9,480
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5,857
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10,047
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Finance income
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456
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4331
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716
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795
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968
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Finance costs
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-2,094
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-429
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-1,522
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-2,463
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-2,014
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Profit on ordinary activities before taxation
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9,549
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9,498
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8,674
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4,189
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9,001
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Income tax charge
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-2,546
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-1,628
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-56
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-1,109
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-2,245
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Profit for the year
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7,003
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7,870
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8,618
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3,080
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6,756
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Vodafone Group Plc
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31st March
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31st March
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31st March
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31st March
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31st March
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Comprehensive Statement of Position
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2012
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2011
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2010
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2009
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2008
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£m
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£m
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£m
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£m
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£m
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Assets
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|
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Non-current assets
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Goodwill
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38,350
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45,236
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51,838
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53,958
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51,336
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Intangible assets
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21,164
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23,322
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22,420
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20,980
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18,995
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Property, plant and equipment
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18,655
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20,181
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20,642
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19,250
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16,735
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Investments in associates
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35,108
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38,105
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36,377
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34,715
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22,545
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Other investments
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791
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1,381
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7,591
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7,060
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7,367
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Deferred tax assets
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1,970
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2,018
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1,033
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630
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436
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Post Employment Benefits
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31
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97
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34
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8
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65
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Trade and other receivables
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3,482
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3,877
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2,831
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3,069
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1,067
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Total Non Current Assets
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119,551
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134,217
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142,766
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139,670
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118,546
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Current assets
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|
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Inventory
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486
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537
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433
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412
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417
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Taxation recoverable
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334
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281
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191
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77
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57
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Trade and other receivables
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10,744
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9,259
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8,784
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7,662
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6,551
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Other investments
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1,323
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674
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388
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0
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0
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Cash and cash equivalents
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7,138
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6,252
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4,423
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4,878
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1,699
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Total Current Assets
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20,025
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17,003
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14,219
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13,029
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8,724
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Total Assets
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139,576
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151,220
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156,985
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152,699
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127,270
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Equity
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Share capital
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3,866
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4,082
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4,153
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4,153
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4,182
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Share premium account
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154,123
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153,760
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153,509
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43,008
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42,934
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Treasury Shares
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-7,841
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-8,171
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-7,810
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-8,036
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-7,856
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Retained profits/losses
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-84,184
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-77,661
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-79,655
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-83,820
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-81,980
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Other Reserves
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10,971
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15,545
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20,184
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130,857
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120,763
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Total equity shareholders funds
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76,935
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87,555
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90,381
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86,162
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78,043
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Non-controlling interests
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1,267
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6
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429
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-1,385
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-1,572
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Total Equity
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78,202
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87,561
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90,810
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84,777
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76,471
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Liabilities
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|
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Non-current liabilities
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Long-term borrowings
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28,362
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28,375
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28,632
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31,749
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22,662
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Taxation liabilities
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250
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350
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0
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0
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0
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Deferred tax liabilities
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6,597
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6,486
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7,377
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6,642
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5,109
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Post employment benefits
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337
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87
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237
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240
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104
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Provisions
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479
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482
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497
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533
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306
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Trade and other payables
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1,324
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804
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816
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811
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645
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Total Non Current Liabilities
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37,349
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36,584
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37,559
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39,975
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28,826
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Current liabilities
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Short-term borrowings
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6,258
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9,906
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11,163
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9,624
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4,532
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Taxation liabilities
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1,898
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1,912
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2,874
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4,552
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5,123
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Provisions
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633
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559
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497
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373
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356
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Trade and other payables
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15,236
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14,698
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14,082
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13,398
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11,962
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Total Current Liabilities
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24,025
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27,075
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28,616
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27,947
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21,973
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Total liabilities
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61,374
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63,659
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66,175
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67,922
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50,799
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Total equity and liabilities
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139,576
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151,220
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156,985
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152,699
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127,270
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Date
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31st Mar 2012
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31st Mar 2011
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31st Mar 2010
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31st Mar 2009
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31st Mar 2008
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Company share price
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162.44p
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157.83p
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128.19p
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97.10p
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113.39p
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FTSE100 Share Index
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5,768.50
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5,908.80
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5,679.60
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3,762.90
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5,702.10
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Required
Write a business report to the board of directors of the company analysing the company's financial performance from 2008-2012.
Q2
The Harold Shipman Private Healthcare Clinic Ltd specialises in hip, knee and shoulder replacement operations that it carries out for private health insurance firms and for some NHS Trusts. As well as providing these surgical procedures it offers pre-operative and post-operative care in a fully equipped private hospital for patients undergoing these procedures. Surgeons are paid a fixed fee for each procedure they perform and an additional amount for each follow up consultation which are given if post operative complications arise. No extra fee is charged to patients for follow up consultations. All the other staff receives annual salaries.
The company's overhead is currently apportioned on revenues to each surgical specialism. The following forecast data for 2014 is made available:
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Medical Procedure
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Hip
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Knee
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Shoulder
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£ Income for 2014
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4,800,000
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8,000,000
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2,400,000
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£ Cost per procedure
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8,000
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10,000
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6,000
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Av time per procedure in hours
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2
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1.2
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1.5
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£ Surgeons fee per procedure
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1,200
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1,800
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1,500
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% of procedures with complications
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8
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5
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10
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£ surgeons fee consultation 2014
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300
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300
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300
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£ cost medical supplies per procedure 2014
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400
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200
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300
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Overheads
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£
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Theatre preparation
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864,000
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Operating theatre usage
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144,9000
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Nursing and ancillary services
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5,428,000
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Administration
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1,216,000
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Other overheads
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923,000
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Total overheads
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9,880,000
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Required
i. Prepare a Marginal Cost Analysed Income Statement for 2014 from the above data to identify total and individual medical procedure contributions and profits (apportion the overheads as indicated above to each procedure). Identify the profit and contribution per procedure
ii. The senior surgeon has voiced the opinion that apportioning overheads on the basis of revenues is misleading and instead should be apportioned on the number of hours incurred on each procedure. Reconstruct the Marginal Cost Analysed Income Statement to reflect this proposed accounting treatment. Also identify the profit and contribution per procedure. Comment on your results.
iii. The Scutari NHS Trust has approached the clinic to undertake some additional knee operations. This would involve operating on a further 50 patients which the clinic has capacity to handle. The trust is offering to pay £250,000 for fulfilling the contract. Advise the clinic what decision should be made regarding the proposed contract based on financial grounds.
Q3.
You have been appointed as a management intern in the Carbon Neutral Group Plc an international company manufacturing alternative green energy systems. This involves you obtaining a wide company experience by working in different divisions of the company. Currently you have been seconded to the production department.
At a production departmental meeting you hear Richard Head the production manager state that,
"Budgeting is a waste of time. I don't see the point of it. It tells us what we can't afford but it doesn't keep us from buying it. It simply makes us invent new ways of manipulating figures. If all levels of management aren't involved in the setting of the budget, they might as well not bother preparing one."
Required:
In an academic essay identify and explain the objectives of a budgetary control system and discuss the concept of a participative style of budgeting in terms of the objectives you have identified supported by credible academic citations.