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. Prepare a financial analysis (3,000 words) by constructing and analysing financial statements and ratios and
providing recommendations for sources of funding and project approval.
For this assignment, there are 3 Parts for you to complete. Please note that each part has multiple sections that
must be completed. You should submit all 3 Parts as one written assignment.
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.
»
Construct a balance sheet for ABC Pvt Ltd for the year ended 30/06/2023 from the following list of
accounts.
Items
Value
Accounts Receivable $ 490,000
Accounts Payable $ 322,000
Bank Loan $ 880,000
Bank Overdraft $ 564,000
Cash $ 205,000
Corporate Bonds $ 945,000
Inventory $ 670,000
Land and Buildings $ 1,275,000
Short-term debt $ 325,000
Plant and Equipment $ 485,000
Advance salary paid $ 80,000
Retained Earnings ???
Office furniture & IT hardware $ 786,000
Tax Liability $ 155,000
Vehicles $ 345,000
Share Capital $ 790,000
Construct a profit and loss statement for ABC Pvt Ltd for the year ended 30/06/2023 from the following
accounts.
Items Value
Rent $ -153,750
Interest $ -150,625
Dividend Received $ 140,625
Depreciation $ -50,000
Sales $1,898,750
Wages $ -219,375
Tax $ -78,750
Utilities $ -106,875
Opening Inventory $ 310,000
Closing Inventory $ -481,875
Dividends paid $ -100,000
Loss from the sale of machinery $ -28,125
Purchases $ 968,750
Construct a statement of cash flows for ABC Pvt Ltd for the year ended 30/06/2023 from the following list
of accounts.
Items Value
Cash at the beginning of the year $ 394,720
Purchases of plant, property and equipment $ -565,000
Proceeds from the issue of new shares $ 153,500
Repayments of long-term borrowings $ -66,000
Taxes paid $ -64,500
Cash received from customers $ 820,000
Payment of finance lease liabilities $ -92,000
Proceeds from long-term borrowings $ 209,879
Wages paid $ -299,375
Proceeds from sale of plant, property and equipment $ 220,000
Cash paid to suppliers $ -382,000
Dividend paid $ -85,000
Dividends received $ 155,000
Interest paid $ -135,224
Interest received $ 18,500
Cost of buying back shares $ -77,500
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. Financial Analysis (500 words)
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.
Answer the following three scenarios:
» Section 2.1. Features & Characteristics (500 to 600 words)
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 (500 to 600 words)
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 (500 to 600 words)
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.
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 (500 words)
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%).
Evaluation Method Values
Would you go ahead with the
project? (Yes/No)
NPV $-18,614
PAYBACK 4.56 years
ARR 6.75%
PI 0.85
IRR 4.93%.
Evaluation Measures Pros/Cons (500 to 600 words)
For each project, discuss the evaluation measures pros and cons. You should include relevant references
in your answer.
The following suggested structure is provided to guide the organisation and structure of your assignment. You
may use this structure or use one that best fits your assignment.
1. Cover or Title Page
2. Financial Statements
a. Balance Sheet
b. Profit and Loss Statement
c. Statement of Cash Flows
d. Ratios
e. Financial Analysis Summary
3. Financing – Risk & Return
a. Features and Characteristics
b. Start-Up Firm Financing
c. Growing-Expansion Firm Financing
4. Cashflow Estimation and Project Evaluation
a. Evaluate Measures
b. Evaluate Measures Pro/Cons
5. Reference page (listed in alphabetical order)
6. Appendix, if needed.
Things to consider:
Have you demonstrated the ability to integrate and apply relevant findings, concepts, or theories to
support your explanations, reasoning, and recommendations?
» Have you provided sufficient examples and evidence to support your reasoning?
» Did you meet all specific formatting requirements?
» Does your assignment meet minimum length and reference requirements?
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