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Identify the potential sources of finance

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Reference no: EM131086522 , Length: 4500 words

Assignment Brief

As part of the formal assessment for the HNC/D programme you are required to submit an assignment for each module. Please refer to your Student Handbook for full details of the programme assessment scheme and general information on preparing and submitting assignments.

After completing the module you should be able to:

- Understand the sources of finance available to a business

- Understand the implications of finance as a resource within a business

- Be able to make financial decisions based on financial information

- Be able to evaluate the financial performance of a business

Assignment Task One

In no more than 1,000 words, write a critical discussion, supported by academic literature, addressing the following for a listed company in Hong Kong:

a) Identify the potential sources of finance available and explain why financial planning is important.

b) Identify and evaluate both long term and short term sources of finance for a project implemented by a listed company. Offer definitions, and assess the advantages and disadvantages for each of the sources you identify and when each would be most appropriate.

c) Analyse the costs associated with different sources of finance and explain how these costs impact the financial statements.

d) Assess the information needs of three stakeholders - such as owners or financial institutions

Assignment Task Two

Aston Ltd is considering investing some of their capital in new premises. This will entail capital expenditure of some $1,000,000. This new project is set to last for ten years and is likely to attract the following budgeted inflows (money coming into the business) and budgeted outflows (money going out of the business):

Years

Cash Inflows

Cash Outflows

 

$'000

$'000

0

0

1000

1

110

30

2

120

35

3

130

40

4

140

45

5

150

50

6

160

55

7

170

60

8

180

65

9

190

70

10

200

75

Note the $1m in year 0 represents the initial capital expenditure.

The business is built up of both equity and debt, and in terms of this specific project it would be funded by $500,000 equity requiring 8% return, and $500,000 of debt requiring 12% return.

In no more than 1,000 words, and using the information above, complete the following:

a) Identify the Net Value or the Net Cash Flow (before applying the discount factor) of the project and also the Net Present Value (after applying the discount factor). Analyze and explain the advantages and disadvantages of the techniques adopted here.

b) Identify the Undiscounted Payback period and the Discounted Payback period and evaluate whether the pricing strategy that has generated the inflows is viable in this scenario

c) Assess whether Aston Ltd should continue with this project.

Ensure that where possible your answer is supported by academic sources.

Assignment Task Three

In no more than 1,500 words:

a) Identify and discuss the purpose of the two main financial statements shown below for a UK company Tesco plc.

b) Evaluate why different formats of financial statements are used for different types of business in UK.

c) Using the financial statements detailed below, for Tesco plc, calculate a series of profitability ratios and liquidity ratios, analyze and interpret the results that you achieve and comment on the company's performance.

Year ended 22 February. 2014 Notes 52 weeks 2014 £m 52 weeks 2013 (restated)fm

(embroil operations

 

 

Revenue

 2

63557

63.406

Cost ogsaPes

 

(59,547)

(59,252)

Gross profit

 

4,010

4,154

Admingratiye expenses

 

(1,657)

(1482)

Profits asses aring on propertrelated items

 

218

(290)

Operating profit

 

2,631

2.382

Share et postiax profits djont ventures and associates

 13

60

72

Finance income

 5

132

120

Finance costs

 5 (564) 

(517)

Profit before tar

 3

2,259

2.051

Taiaion

 6

(341)

(529)

Profit for the year from continuing operations

 

1,912

1,528

Discontinued operations

 

 

 

Loss 'of the year from discontinuted operation

 7

(942)

(1.504)

Profit for the year

 

970

24

Attributable ter

 

 

 

Owner of the parent

 

974

28

Nen-controIng nterests

 

(4)

(4)

 

 

970

24

Group balance sheet

Notes

22 February 2014 fin

23 February 7013 fin

Non-current assets

 

 

 

Goodvnl and other ritan4bleassets

10

3,795

1362

nrcperty,ptantard etwOment

II

24,490

24870

hwesb-nent property

12

227

2,001

1r...fitments injont ventures and associauts

13

286

494

Other nvestments

14

1,015

818

Walt and advances to customers

17

3,210

2,465

Derivative (nand.); anuments

21

1,496

1,965

Deferred tax assets

6

73

58

 

 

34,592

37,033

Current assets

 

 

 

liwentories

IS

3,576

3,744

Tradeand other receivables

16

2,190

2,525

Loans and edam*. to <women

17

3,705

3.094

Dethethe Una/KW 'nstruments

21

80

58

Current tax assets

 

12

10

Short term arestments

 

1,016

522

Cash and ash equvants

18

2,5%

2,512

 

 

13,085

12,465

Assets of thedisposalgroup3rd non-currentassetsclassified as held for sale

7

2,487

631

 

 

15,572

13.096

Current I 'blades

 

 

 

Trade and other payables

19

(10,595)

(11,094)

Financial liablities:

 

 

 

Borronirgs

20

(1.910)

(766)

Derivatise fsncial :laments and other fabates

21

(99)

(121)

Cuuorner deposits and deposes from banks

23

(6.858)

(6,015)

Current tax labities

 

(494)

(519)

Pro/is:rim

24

(250)

(188)

 

 

(20.206)

(18,703)

liablees d the d. sposal group dash led as held for sale

7

(1,193)

(282)

Net anent labiities

 

(5,827)

(5,889)

Non-current liablides

 

 

 

Eh-iamb& liaba eies:

 

 

 

Batwings

20

(9,303)

(10,068)

Derivative &uncial intrumenh and other Eateries

21

(770)

(759)

Post-ernpSoyment benefit captions

26

(3,1%)

(2,378)

Deferred tax I abides

6

(594)

(1,006)

Pro/arms

24

(183)

072)

 

 

(14,043)

(4.483)

Net assets

 

14,722

16%1

Equity

 

 

 

Share capital

27

405

403

Share Inman

 

5,080

5,020

Allother reserves

 

(498)

685

Retaned earrings

 

9,728

10535

EquityattributeMe to owners of the parent

 

14,715

16643

Non-control nu interests

 

7

18

Total equity

 

14,722

16,661

References (via hkebsco in iLearn)

Marsh, Clive (2012) Financial Management for Non-financial Managers, In Strategic Success Series, London: Kogan Page.

Finch, Brian (2010) Effective Financial Management, In Creating Success. London :Kogan Page.

Vernimmen, Pierre (2011) Corporate Finance: Theory and Practice, 3rd ed. Chichester, West Sussex : John Wiley & Sons, Inc.

BTEC textbook

Davies, J., (2011), BTEC Level 4/5 HNC in Business

Other Reference books

Weetman, P. (2013) Financial and Management Accounting: An Introduction, Pearson

Lumby, S. and Jones, C. (2000) The Fundamentals of Investment Appraisal, Thomson Learning

Magazines, journals and newspapers
Accounting, Auditing and Accountability Journal
The International Journal of Accounting?
The Economist?
The Financial Times

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Reference no: EM131086522

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Reviews

mad1086522

8/23/2016 6:16:50 AM

Thanks for solution! i have received complete solution for this assignment and i need your help further to complete this assignment per professor's criteria, please help and get me answer. Task 3.2 (Refer to attached pdf file for details) meaning i need to revise the assignment again and need to resubmit to professor. all others are fine according to professor. Yes, task 3.2 only you can refer to feedback from professor in file i shared. Ideally it should be part of initial solution shared earlier, you can check with experts they'll see how to fit this answer in 3500 words limit of full assignment. Pls highlight answer update with different colored font for easy identification.

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