UK COLLEGE OF BUSINESS AND COMPUTING

Module Booklet
Centre Name

UK COLLEGE OF BUSINESS AND COMPUTING

Qualification

Higher National Diploma in Business

Unit number and title Unit 2

Unit title

Managing Financial Resources and Decisions

Unit code

H/601/0548

Level

4 (QCF)

Credit

15

Group:

Edexcel Level 4: Bus Batch 4

Course:

Edexcel BTEC (HND) Business

Unit type:

Optional

Teaching Period:

(15+6 weeks)

Contact Hours:

(15*3 = 5*3) = 60

Lecturers:

Lecturers: 15 weeks

Revision Clinic:

3 week

Module Type

Core

Emmanuel Ofori

Assessor name

Feedback and assignment guidance: 3 weeks

Lecturer: Mr Emmanuel B Ofori [BSc (Hons.), MSc, ACCA, MBA (INTL.]
Start date: 25/6/13
Lecture Days:

Thursday 14:00 17:00 pm

Time: Thursday: 14:00 17:00

Batch 4

Location: Lords House

Term: Summer Term

CONTENTS

1. INTRODUCTION, AIMS AND OBJECTIVES

2. MODULE OUTLINE AND TEACHING METHODS

3. READING AND COURSE PREPRATION

4. LECTURE WITH DETAILED COURSE PROGRAMME AND OBJECTIVES

5. ASSESSMENT DETAILS

INTRODUCTION

This unit is designed to give learners a broad understanding of the sources and
availability of finance for a business organisation. Learners will learn how to
evaluate these different sources and compare how they are used.
They will learn how financial information is recorded and how to use this
information to make decisions for example in planning and budgeting.
Students of this unit will gain an understanding of where and how to access
sources of finance for a business, and the skills to use financial information for
decision making. Upon completing the unit, learners will 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, and; be able to evaluate the financial
performance of a business.
Decisions relating to pricing and investment appraisal are also considered
within the unit. Finally, learners will learn and apply techniques used to
evaluate financial performance.
Aim:
The unit aim is to provide learners with an understanding of where and how to
access sources of finance for a business, and the skills to use financial
information for decision making.
Key Objectives:

Identify the sources of finance available to a business

Examine the implications of the different sources
Select appropriate sources of finance for a business project
Evaluate the costs of different sources of finance
Explain the role of financial planning
Analyse the information needs of different decision makers
Explain how different types of finance and their costs appear in the
financial statements of a business;
Analyse and monitor cash and other budgets make appropriate
decisions
Calculate unit costs and make pricing decisions
Assess the viability of a project using investment appraisal techniques
Explain the purpose of main financial statements
Compare and contrast the formats of financial statements for different
types of business such as sole trader, partnership and company.
Analyse key accounting ratios for profitability, liquidity, efficiency and
investment and compare both internal and external.

Learning Outcomes and assessment criteria:

On successful completion of this unit a learner will:
Understand the sources of finance available to a business
1.1 identify the sources of finance available to a business
1.2 assess the implications of the different sources
1.3 evaluate appropriate sources of finance for a business project
Understand the implications of finance as a resource within a business
2.1 analyse the costs of different sources of finance
2.2 explain the importance of financial planning
2.3 assess the information needs of different decision makers
2.4 explain the impact of finance on the financial statements
Be able to make financial decisions based on financial information
3.1 analyse budgets and make appropriate decisions
3.2 explain the calculation of unit costs and make pricing decisions using
relevant information
3.3 assess the viability of a project using investment appraisal techniques
Be able to evaluate the financial performance of a business
4.1 discuss the main financial statements
4.2 compare appropriate formats of financial statements for different types of
business
4.3 interpret financial statements using appropriate ratios and comparisons,
both internal and external.
Knowledge and Understanding:

Identify and explain the sources of finance available to a business

Assess the implications of finance as a resource within a business
Know how to make financial decisions based on financial information
Evaluate the financial performance of a business

Indicative content:
1. Understand the sources of finance available to a business
Range of sources: sources for different businesses; long term such as share capital;
retained earnings; loans; third-party investment; short/medium term such as
hire purchase and leasing; working capital stock control; cash management;
debtor factoring

Implications of choices: legal, financial and dilution of control implications;

bankruptcy.
Choosing a source: advantages and disadvantages of different sources; suitability
for purpose e.g. matching of term of finance to term of project
2. Understand the implications of finance as a resource within a business
Finance costs: tangible costs e.g. interest, dividends; opportunity costs e.g. loss of
alternative projects when using retained earnings; tax effects
Financial planning: the need to identify shortages and surpluses e.g. cash
budgeting; implications of failure to finance adequately; overtrading
Decision making: information needs of different decision makers
Accounting for finance: how different types of finance and their costs appear in
the financial statements of a business; the interaction of assets and liabilities on
the balance sheet and on international equivalents under the International
Accounting Standards (IAS).
3. Be able to make financial decisions based on financial information
Budgeting decisions: analysis and monitoring of cash and other budgets;
Costing and pricing decisions: calculation of unit costs, use within pricing
decisions; sensitivity analysis;
Investment appraisal: payback period; accounting rate of return; discounted cash
flow techniques i.e. net present value; internal rate of return;
Nature of long-term decisions: nature of investment importance of true value of
money; cash flow; assumptions in capital investment decisions; advantages and
disadvantages of each method.
4. Be able to evaluate the financial performance of a business
Terminology: introduction to debit, credit, books of prime entry, accounts and
ledgers, trial balance, final accounts and international equivalents under the
International Accounting Standards (IAS);
Financial statements: basic form, structure and purpose of main financial
statements i.e. balance sheet, profit and loss account, cash flow statement, notes,
preparation not required; changes to reporting requirements under the
International Accounting Standards (IAS) e.g. statement of comprehensive
income, statement of financial position; distinctions between different types of
business i.e. limited company, partnership, sole trader;
Interpretation: use of key accounting ratios for profitability, liquidity, efficiency
and investment; comparison both external i.e. other companies, industry
standards and internal i.e. previous periods, budgets.

Programme Specification
Accrediting Body: EDEXCEL
Course: BTEC HND IN BUSINESS
Unit: 2 MANAGING FINANCIAL RESOURCES & DECISIONS
Wk Lecture Schedule
Outcome of session
1

Activity/seminar and
formative assessment

Resources

Introduction to Managing Financial

Introduction to the module, mode of assessment,

Short-answer questions to

Module

Resources & Decisions: identifying the

awareness of the awarding body, assessment

assess learners knowledge,

handbook

sources of finance available to a business and

criteria and the mode of assessment

role play and individual

assessing the implications of the different

induction, helping to know

sources of finance.

each other.

Case study
Assessing the implications of the various
sources of finance

Identify sources of finance available to an existing

Power point

business

slides and
lecture notes.

Be able to assess the implications of the different

sources of finance.

Evaluating appropriate sources of finance for

3

a business project.

Case study: analysing the costs of different

sources of finance.

By the end of the session, the learner will be able to

evaluate appropriate sources of finance for a
business project.

Moderated group discussions

Power point

and short-answer questions.

slides and

Working with the assignment

Case study and addressing the

Module hand

learning outcome 1.1, 1.2 and

book and

1.3

assignment for

lecture notes.

the purpose

The importance of financial planning.

Planning is a managerial function and this lecture

Reflective questions at the end

Power point

aims at enabling the learner to grasp the

of the class and a case study

slides, video-

importance of financial planning within an

for discussion

based sessions

organisation.

on the
importance of
financial
planning.

Assessing the information needs of different

decision makers.

The impact of finance on financial statements.

Identify the types of decisions made by various

decision makers at all levels in an organisation.
Assess the information needed to support decision
making at all levels of the organisation.
Having understood the importance of financial
planning to an organization, explain the impact of
finance on financial statements.

Practical discussion and

feedback

Computer Lab

Case study and address the LO

PowerPoint
slides and
lecture notes

Working with the Assignment meeting the LO

2.1,2.2,2.3,2.4
8

Analysing budgets and making appropriate

Explain and illustrate two components of the

decisions.

budget that could help you make appropriate

slides and

financial decisions.

lecture notes.

Calculation of unit costs and making pricing

Case study and address the LO

Do

Case study and role play.

Do

Group discussion

Explain the key components of financial

Case study and LO

decisions, using relevant information.

10

Assessing the viability of a project, using

investment appraisal techniques.

11

Case study and class discussion of the main

PowerPoint

PowerPoint
slides and
lecture notes.
Power point
slides and
lecture notes.
Power point

financial statements.

statements.

slides and
lecture notes.

12

13

Appropriate formats of financial statements

Identify the different formats of financial

Case study and LO

Power point

for different types of business.

statements for different types of business and

slides and

explain their relevance.

lecture notes.

Interpreting financial statements, using

Demonstrate an understanding of the various ratios

Discussion and reflective

Power point

appropriate ratios and comparisons (internal

used to interpret financial statements.

feedback

slides

& external).
14

Case study

Interpret financial ratios using a real business

15

Revision. Summarising all the tasks

Addressing the LO

16

Assignment Support and guidance

Addressing the LO

17

Assignment Support and guidance

Addressing the LO

18

Assignment Support and guidance

Addressing the LO

19

Assessment and feedback

Feedback given to learners

20

Assessment and feedback

Feedback given to learners

21

Assessment and feedback

Feedback given to learners

Recommended text and links:

Core text

Feedback addressing the

learning outcome

Dyson J R, (2007), Accounting for Non-Accounting Students. Financial Times/Prentice Hall. ISBN: 9780273709220

Other text
Atrill P. (2012), Financial Management for Decision Makers. 6th Edition, Harlow: Pearson Financial Times/Prentice Hall. ISBN: 9780273756934
Atrill, P. and McLaney, E. (2013), Accounting and finance for non-specialists. 8th ed. Harlow: Financial Times/Prentice Hall. ISBN: 9780273778035
Watson, D. and Head, A. (2012), Corporate Finance Principles and Practice. 6th edition, Harlow: Pearson ISBN: 9780273762874

Journals and newspapers

The financial and mainstream press can provide useful background reading, and can also be a useful source of case studies and financial
information. Copies of published financial reports are available from companies themselves, or via The Financial Times (a free online ordering
service is available).
Videos
A number of videos are available, covering the financial aspects of business.
Websites
The professional accounting bodies all have websites with lots of useful information and links.
The Financial Times website includes a free service providing copies of financial reports. Biz/ed provides a wealth of useful resources aimed at
learners and teachers.
www.aat.co.uk
www.accountingtechnician.co.uk
www.bized.ac.uk
www.ft.com

The Association of Accounting Technicians

Accounting Technician magazine
provides case studies appropriate for educational purposes
The Financial Times

Wk
1

Session Update
Sources of finance; Equity and Debt source of finance, the advantages and disadvantages
of each source identified and the implication for each source identified

Date
18/06/13

Evaluation of the cost source of finance (debt and equity). The factors to consider when
choosing between debt and equity
The importance of financial planning.

25/06/13

3
4
5
6
7
8
9
10
11
12
13

04/07/13

Signature

14
15
16
17
18
19
20

Lecturer: Mr. Emmanuel B Ofori

Campus: Lords House
Contact details: emmanuel@ukcbc.co.uk, / oforiboakye@yahoo.com
Assessment:
The module will be assessed meeting all the LO as specified by the awarding body, Ed Excel.
Please read the instructions carefully while addressing the tasks specified.
Contribution: 100% of the module
Outline Details: Individual report approx 4000 words. Details enclosed in the assignment brief.

Teaching and Learning Activities

The module tutor(s) will aim to combine lectures with tutorial activities. This environment will provide opportunities for the student to
understand the course material through case study and text and to apply it in a practical way. The intent is to facilitate interactive class activities,
and discussion about the significant role of research in a global and local business environment.

2.3

Teaching Ethos

The colleges approach towards teaching and learning is simple and effective. The main aim of UKCBC is to assist learners in maximising their
potential by ensuring that they are taught clearly and effectively. This will enable students to engage in the learning environment and promote
success in both their academic studies and subsequent career.

2.3.1 Methods of Delivery:

LECTURES:
These will be developed around the key concepts as mentioned in the indicative course content and will use a range of live examples and cases
from business practice to demonstrate the application of theoretical concepts. This method is primarily used to identify and explain key aspects
of the subject so that learners can utilise their private study time more effectively.

SEMINARS:
These are in addition to the lectures. The seminars are designed to give learners the opportunity to test their understanding of the material
covered in the lectures and private study with the help of reference books. This methodology usually carries a set of questions identified in
advance. Seminars are interactive sessions led by the learners. This method of study gives the learner an excellent opportunity to clarify any
points of difficulty with the tutor and simultaneously develop their oral communication skills.
CASE STUDIES:
An important learning methodology is the extensive use of case studies. They enable learners to apply the concepts that they learn in their
subjects. The learners have to study the case, analyse the facts presented and arrive at conclusions and recommendations. This assists in the
assessment of the learners ability to apply to the real world the tools and techniques of analysis which they have learnt. The case study serves as
a supplement to the theoretical knowledge imparted through the course work.
Plagiarism:
Any act of plagiarism will be seriously dealt with according to the colleges and awarding bodies regulations. In this context the definition and
scope of plagiarism are presented below:
Plagiarism is presenting someones work as your won. It includes copying information directly from the web or books without referencing the
material; submitting joint coursework as an individual effort; copying another students coursework; stealing coursework form another student
and submitting it as your own work. Suspected plagiarism will be investigated and if found to have occurred will be dealt with according to the
college procedure. (For further details please refer to the plagiarism policy and the student code of conduct.)

ASSESSEMENT
Unit: 2 MANAGING FINANCIAL RESOURCES AND DECISIONS
Learning Hours: 60 Hours.
Self-learning hours: 90 hours.
Course: HND Business Level 4
CREDIT VALUE: 15 CREDITS
Term:
Lecturer: Mr. Emmanuel B Ofori
Verifier: Mrs Sunita Kotta
Learners Name
Registration Number
Learners Declaration: I certify that the work submitted for this unit is my own:
Signed:
Hand out Date:
Submission Date:
The Following Sections to be completed by the assessor:
Center Name:
UKCBC
Center Number:
08640
Please note that the assessors signature below denotes conformation that he/she
has in no way influenced the outcome of the assessment:
Assessors Name:
Assessors Signature:
Has the unit been Internally Verified?
Date of verification:
Internal verifiers signature:
Internal verifiers assignment brief:

Due Dates
Issue Date
Due Task- 1
Due Task- 2
Due Task- 3
Due Task- 4

04/06/2013
30/07/2013
18/08/2012
15/09/2013
10/10/2013

Y/N

Final Due date

01/2014

15

Unit Outcomes
Outcome

Evidence for the criteria to

pass.

Assessors
decision

Internal
verification
decision.
(agree,
disagree)

TASK 1
The recession has left many people without jobs. Assuming that you have been
laid off by your company and you have personal savings of 50,000. You have been
contemplating what to do next and your friend has advised you to start your own
business and be your own boss. You decide to carry out research on which business
to engage in and how to raise the required finance. You are required to start a new
business as a sole trader, or partnership or company with start-up capital of at least
100,000 - 1 million. Using supportive materials like books, websites, etc., and give a
feedback of the findings on P1.1, P1.2, P1.3, P2.1, P2.2, P2.3 and P2.4. Answers
without application to a specific business or appropriate examples will be referred

LO1. Understand
the sources of
finance available to
a Business.

P1.1- Identify the sources of

finance available to a
business

P1.1
(P,M,D)

P1.1
(P,M,D)

P1.2- Assess the

implications of the different
sources

P1.2
(P,M,D)

P1.2
(P,M,D)

P1.3- Evaluate appropriate

sources of finance for a
business project

P1.3
(P,M,D)

P1.3
(P,M,D)

Summarized
Feedback for Task
1(reflecting 1.1, 1.2,
1.3, 1.4, Pass merit
and distinction.)

16

IV comments
towards
Task 1
TASK 2
LO2. Understand the
implications of
finance as a resource
within a business.

P2.1- Analyse the costs of

different sources of finance
P2.2- Explain the
importance of financial
planning
P2.3 Assess the information
needs of different decision
makers
P2.4- Explain the impact of
finance on the financial
statements

P2.1
(P,M,D)
P2.2
(P,M,D)

P2.1
(P,M,D)
P2.2
(P,M,D)

P2.3
(P,M,D)

P2.3
(P,M,D)

P2.4
(P,M,D)

P2.4
(P,M,D)

Summarized
Feedback for Task 2
(reflecting 2.1, 2.2,
2.3, 2.4, Pass merit
and distinction).
IV comments
towards
Task 2
TASK 3
You are required to carry out a research by using supportive materials like books,
websites, etc., and give a feedback of the findings on P3.1, P3.2, P3.3, and P3.4. The
answer need to reflect the case study given in the assignment for this purpose.
Answers without application to the case study given will be referred.
P3.1- Analyse budgets and
P3.1
P3.1
LO3. Be able to
(P,M,D)
make appropriate decisions. (P,M,D)
make financial
P3.2- Explain the calculation P3.2
P3.2
decisions based on
(P,M,D)
(P,M,D)
of unit costs and make
financial
pricing decisions using
information
relevant information.
P3.3- Assess the viability of a P3.3
P3.3
(P,M,D)
(P,M,D)
project using investment
appraisal techniques.
17

Summarized
Feedback for Task 3
(reflecting 3.1, 3.2,
3.3 Pass merit and
distinction).
IV comments
towards
Task 3
TASK 4
For task P4.1 and P4.2 you are required to carry out a research by using supportive
materials like books, websites, etc., to discuss the main financial statements (profit
and loss, balance sheet and cash flow statement and compare appropriate formats of
financial statements for different types of business (such as formats of financial
statements for sole trader, partnership and limited company), and give a feedback of
the findings on P4.1 and P4.2. Answers without application to main financial
statements or formats of financial statements for different types of business and
appropriate examples will be referred.
For task P4.3 you are required to carry out a research by using supportive materials
like books, websites, annual reports, etc., to interpret financial statements of WM
Morrison Supermarkets PLC using appropriate ratios given below and to compare its
financial performance with that of J Sainsbury PLC for year 2011 and 2010. Answers
without application to the case study will be referred.
P4.1 Discuss the main
P4.1
P4.1
LO4. Be able to
(P,M,D)
(P,M,D)
financial statements
evaluate the
P4.2 Compare appropriate
P4.2
P4.2
Financial
(P,M,D)
(P,M,D)
formats of financial
performance of a
statements for different types
business
of business
P4.3 Interpret financial
P4.3
P4.3
(P,M,D)
statements using appropriate (P,M,D)
ratios and comparisons, both
internal and external
Summarized
Feedback for Task
4(reflecting 4.1, 4.2,
4.3, Pass merit and
distinction.)

18

IV comments
towards
Task 4
Merit grades
M
awarded
1
Distinction
D1
grades awarded
Any other comments

M
2
D2

Grade given by the Assessor:

Pass
Merit
Assessors Signature:
IV Grading Check:
Agree
Disagree
IV signature:
Date:
Students feedback:

M3

P1
D3

P2

P3

P4

Resubmit :

Distinction
Date:
Comments if any:
Modify grade to

Student Signature:
Date:
Plagiarism:
Any act of plagiarism will be seriously dealt with according to the colleges and
awarding bodies regulations. In this context the definition and scope of plagiarism
are presented below:
Plagiarism is presenting someones work as your won. It includes copying
information directly from the web or books without referencing the material;
submitting joint coursework as an individual effort; copying another students
coursework; stealing coursework form another student and submitting it as your own
work. Suspected plagiarism will be investigated and if found to have occurred will be
dealt with according to the college procedure. (For further details please refer to the
plagiarism policy and the student code of conduct.)

19

Assignment
TASK 1 to TASK 4: You are required to follow the instructions as specified
towards each task and support with a research by using supportive materials like
books, websites, etc., and give a feedback on the findings by relating your
arguments to relevant case studies and examples from a business organisation as
specified in each task:
Task 1 and 2
The recession has left many people without jobs. Assuming that you have
been laid off by your company and you have personal savings of 50,000. You
have been contemplating what to do next and your friend has advised you to
start your own business and be your own boss. You decide to carry out
research on which business to engage in and how to raise the required finance.
You are required to start a new business as a sole trader, or partnership or
company with start-up capital of at least 100,000 - 1 million. Using supportive
materials like books, websites, etc., and give a feedback of the findings on P1.1,
P1.2, P1.3, P2.1, P2.2, P2.3 and P2.4. Answers without application to a specific
business or appropriate examples will be referred.
Task 1
LO1 Understand the sources of finance available to a business
P1.1 Identify the sources of finance available to the new business you have
chosen
P1.2 Assess the implications of the different sources of finance to your chosen
business
P1.3 Select appropriate sources of finance for a business project you have chosen
e.g. opening new store, developing IT system, buy new machines etc.

20

Task 2
LO2 Understand the implications of finance as a resource within a business
Using the same business you have chosen above

P2.1 Analyse the costs of different sources of finance

P2.2 Explain the importance of financial planning to the business organisation
you have chosen
P2.3 Assess the information needs of different decision makers in your chosen
business
P2.4 Explain the impact of finance on the financial statements of your chosen
business

Task 3
Use the case study given below and carry out a research by using supportive
materials like books, websites, etc., and give a feedback of the findings on P3.1,
P3.2, and P3.3. Answers without application to the case study or appropriate
examples will be referred.
LO3 Be able to make financial decisions based on financial information
P3.1 Analyse budgets and make appropriate decisions from the case study given
below:
Easy electronics ltd has been trading for many producing IBM compatible motherboards
or main boards which are sold to own equipment manufacturers, Easy personal and

21

computer hardware sellers. Budgeted Profit and Loss Account and Cash Budget for the
six months period ending 31/December 2013 is given below:

Easy Electronics ltd Budgeted Profit and Loss Account for the six month period ending
31December 2013.
'000
Sales

'000
35,830

Less: Cost of sales

(18,878)

Gross profit

16,952

Profit from disposal of equipment

100
17,052

Less: Expenses
Administration cost (2400 + 675)

3075

Distribution cost

3,481

Profit before interest and tax

(6,556)
10,496

Loan interest

(500)

Profit before tax

9,996

Less: Corporation tax @ 23%

Profit after tax

(2,299)
7,697

22

Easy Electronics ltd

Cash flow forecast for July to December 2013
Months
Receipts (in flows)
Receipts from cash sales
Receipts from Debtors
Receipt from disposal of fixed
asset
Total receipts (A)
Payments (out flows)
Payments to trade creditors
Salaries and wages
Variable overheads
Administrative cost (excludes
monthly depreciation 100,000
for July - Sept and 125,000 for
Oct - Dec )
Distribution cost
Capital expenditure
Dividends
Corporation tax
Interest and other finance
charges
Total payments (B)
Net cash flow (surplus or
(deficit)) C = (A-B)
Opening cash balance (D)
Closing cash balance (C+D)

Jul
'000
1,500
3,333

Aug
'000
1,575
3500

Sep
'000
1,653
3,675

Oct
'000
1,818
3,859
400

Nov
'000
2,000
4,245

Dec
'000
2,200
4,669

4833

5075

5,328

6,077

6,245

6,869

1,636
900
800
400

1,800
990
880
400

1,890
1,089
968
400

1,985
1,198
1,084
400

2,084
1,318
1,214
400

2,292
1,450
1,360
400

400

440

484

557
3,000

640

960
1,000

900
500
4136

4,510

4831

9124

6156

7462

697

565

497

-3,047

89

-593

1000
1697

1697
2262

2262
2,759

2,759
-288

-288
-199

-199
-792

23

Additional information:
(i)
(ii)
(iii)
(iv)

30% of the sales are to be paid for by cash each month

Settlement for credit purchase is 30 days
The company offers a 30 days credit period
State any other assumptions made.

P3.2 Explain the calculation of unit costs and make pricing decisions using
relevant information given below:
You are required to use the budgeted profit and loss account to explain how unit
costs are calculated. It is estimated that Easy Electronics ltd will manufacture and sell
650,036 mother boards for the six months period ending 31st December 2013. The finance
director of Easy Electronics ltd has asked you to evaluate a proposal to reduce the selling
price by 10% from the current price of 55.12 per unit and as results sales are expected to
increase by 20%. Cost of sales will also increase by 20%. All other costs will remain
constant. You are required to make pricing decision based on the above information.

P3.3 Assess the viability of a project using at least two investment appraisal
techniques using the case study provided below:
Easy Electronics ltd is considering diversifying into manufacturing Aluminium
computer cases or housing from October 2014. The companys cost of capital is 10%. The
net cash flows from the project are given below.

Project A: Aluminium Housing

Year

000

(8,000)

2,000

24

2,800

3,200

1,200

800

500

The project has a residual or scrap value of 400,000.

Year

Discount factor @10%

Discount factor @15%

0.909

0.870

0.826

0.756

0.751

0.658

0.683

0.572

0.621

0.497

0.564

0.432

LO4 Be able to evaluate the financial performance of a business

For task P4.1 and P4.2 you are required to carry out a research by using
supportive materials like books, websites, etc., to discuss the main financial
statements (profit and loss, balance sheet and cash flow statement and compare
appropriate formats of financial statements for different types of business (such
as formats of financial statements for sole trader, partnership and limited
company), and give a feedback of the findings on P4.1 and P4.2. Answers
without application to main financial statements or formats of financial
statements for different types of business and appropriate examples will be
referred.

25

P4.1 Discuss the main financial statements (the discussion should focus on basic
form and purpose of main financial statements)
P4.2 Compare appropriate formats of financial statements for different types of
business

P4.3 Interpret financial statements using appropriate ratios and comparisons,

both internal and external using the data given below.
For task P4.3 you are required to carry out a research by using supportive
materials like books, websites, annual reports, etc., to interpret financial
statements of WM Morrison Supermarkets PLC using appropriate ratios given
below and to compare its financial performance with that of J Sainsbury PLC for
year 2011 and 2010. Answers without application to the case study given will
be referred.
Particulars

Turnover (mil)
Profit (Loss) before Taxation
Return on Shareholders Funds %
Gross margin %
EBIT margin %
Profit Margin %
Berry ratio
Return on Capital Employed %
Return on Total Assets %
Net Assets Turnover (x)
Current ratio (x)
Liquidity Ratio (x)
Stock Turnover (x)
Debtor Collection Days
Creditors Payment Days
Gearing %

WM Morrison
Supermarkets PLC
2011
2010
17,663
16,479
947
874
17.55
16.13
6.89
6.97
5.51
5.49
5.36
5.30
3.95
3.79
12.53
12.44
9.61
9.59
2.34
2.35
0.57
0.55
0.24
0.24
23.27
25.83
3.95
4.36
29.12
31.01
42.02
29.61

J Sainsbury PLC
2011
22,294
799
14.19
5.43
3.92
3.58
3.09
8.68
6.47
2.42
0.65
0.35
23.77
1.80
31.16
66.18

2010
21,102
827
15.25
5.50
4.03
3.92
3.04
9.78
7.26
2.50
0.58
0.31
25.99
1.61
31.76
57.28
26

Interest Cover (x)

Earnings per share ()
Dividends per share( )
Market capitalisation (mil)
Total Assets (mil)
Working Capital
Shareholders Funds (mil)

6.09
0.27
0.12
7,236
9,859
-981
5,397

21.33
0.24
0.08
7,083
9,111
-948
5,420

6.79
0.32
0.15
5,846
12,340
-1,104
5,629

8.13
0.34
0.14
6,257
11,399
-1,221
5,424

Assignment Guidelines:
Use a standard report structure, Word-process the report and use Normal script
of a proper font size 12.
Produce an academic report, detailing the above issues with a word limit of 4000
to 4500 words.
Complete the title page and sign the statement of authenticity.
The Assignment sheet should be attached in the front.
Submit the document in a folder in the form of a file as well as a soft copy on the
submission date.
It should be uploaded on E-Learning platform before the deadline and submitted
to -------- and sign the submission form of the college.
Assignments submitted after the deadline will not be accepted unless mitigating
and may be entitled for a late fee.
Collusion and Plagiarism must be avoided.
Start each answer on a new page and pages should be numbered. Highlight each
question clearly.
Include a Bibliography at the end of the assignment and use the Harvard
referencing system.
All work should be comprehensively referenced and all sources must be fully
acknowledged, such as books and journals, websites (include the date of visit),
etc.
Try to give the page numbers, publishers' details and the year of publication
In order to pass you need to address all the LO
In order to get a merit you need to address the characteristics of Pass and then
M1, M2,M3
In order to get a Distinction you need to address the characteristics of Pass, Merit
and then D1, D2 and D3.
Use a common format for the questions, for example:
Introduction (analyze the question.)
Underpinning Knowledge (write about the relevant theory/points)
Applied knowledge(Data Analysis)

27

 Conclusions and Recommendations (summarizing the whole scenario keeping in

view pass, merit, distinction criteria.)

Student feedback form with the Assessment Grid indicating their pass, merit
and distinction:
Name:
Registration Number:
Unit: Managing Financial Resources & Decisions
Outcomes/criteria:
Indicative characteristics Possible evidence
LO1. Understand the
sources of finance
available to a business.

As per the assessment

criteria specified for pass

Task 1

LO2. Understand the

implications of finance as
a resource within a
business

Do

Task 2

LO3. Be able to prepare

forecasts and budgets for
the business

Do

Task 3

LO4. Be able to evaluate

Do
the financial performance
of a business.

Task 4

Merit Description:
M. Identify and apply
strategies to find
appropriate solutions.

Feedback

. Relevant theories and

techniques have been
applied.
28

M2. Select/ design and

apply appropriate
methods/ techniques.

M3. Present and

communicate appropriate
findings.

. Effective judgments have

been made.
. Complex problems with
more than one variable
have been explored.
. An effective approach to
study and research has
been used.
. A range of methods and
techniques has been
applied.
. A range of sources of
information used.
. The selection of methods
and techniques justified.
. Complex
information/data have
been synthesized and
processed.
.Appropriate learning
methods/ techniques
applied.
. Appropriate structure
and approach has been
used.
. Logical and coherent
arguments have been
presented
. Technical language
accurately used.
. A range of methods of
presentation has been
used.
. Familiar and unfamiliar
contexts have been used.
. It is appropriate for
familiar and unfamiliar
audiences.

Distinction Description:
29

D1. Use critical reflection

to evaluate own work and
justify valid conclusion.

D2. Take responsibility for

managing and organizing
activities.

D3. Demonstrate
convergent, lateral and
creative thinking

. Synthesis has been used

to generate and justify
valid conclusions
. The validity of results
has been judged
. Self-criticism of
approach has taken place.
. Evaluation has taken
place using defined
criteria
. Realistic improvements
have been proposed
against defined
characteristics for success.
Autonomy/independence
demonstrated
Substantial
activities/projects or
investigations have been
planned, managed and
organized.
The unforeseen has been
accommodated.
The importance of
interdependence has been
recognized.
Ideas generate and
decisions taken
Convergent and lateral
thinking have been
applied
Capacity for innovation
and creative thought has
been used.
Receptiveness to new
ideas has demonstrated.
Unfamiliar contexts have
been applied.

30

31