UNDERGRADUATE/POSTGRADUATE DEGREES
COURSEWORK FRONT SHEET
Learning outcomes and pass attainment level:
Enable students to understand and critically evaluate the financial and narrative accounting information of business organisations.
Provide students with the knowledge and skills to apply appropriate techniques to make short-term business decisions.
Equip students with the skills to explore and apply alternative theories and concepts upon which a firms long-term investment and financing decisions are founded
The assessment for this unit is this one coursework assignment. The required mark has been set at 50%.
This is an individual assessment requirement. There is no objection discussing the content and approaches to be adopted in the final submission you must make 100% your own work. Plagiarism and copying will not be tolerated and may lead to subsequent penalties being imposed.
There are three separate questions. All three questions should be attempted and submitted together on numbered pages. Your answers should be prepared and submitted in Word format. Excel spreadsheets may be used but must be pasted into the Word document and not submitted separately. This should be carefully checked before submission for the use of appropriate and acceptable grammar. The correct use English spelling is to be employed throughout and no other. All submissions must be page numbered and contain your student ID number.
When determining the amount of effort and words for each section of the assignment it will be advisable to examine the weighting of the marks allocated to each question. If any part of the assignment is ignored then this reduces the maximum marks that could be potentially earned.
The word limit to any potential narrative question in the third section will be a maximum of 1,500 words excluding the bibliography.
The assignment will require a considerable personal investment of time and effort. This is an individual assignment and all calculations, analysis and narrative submitted must be your own work.
The following matrix has been included to help guide you.
Section A (50%)
Section B (30%)
Section C (20%)
1i. Financial Analysis
2.i Marginal Cost
Statement
Budgeting
research
academic
essay
Fail
Lack of breadth and depth of financial analysis techniques
Accompanied by incorrect formulae, calculation without explanation and failure to follow the layout taught on the course
Failure to presenting the financial information in the multi-product and total marginal cost statement format required and not identifying contribution achieved, profit per procedure, contribution per procedure and contribution per hour.
Failure to identify the antecedence, definition and purpose and objective budgets that is underpinned by a range of credible professional and academic citations.
Absence of major criticisms and alternatives to traditional budgets underpinned by professional citations.
Absence of 21st century references.
Bare Pass
Evidence of some financial analysis techniques but with errors of formulae and calculation with insufficient explanation and adequate presentation
Unclear financial information presented in an inadequate multi-product and total marginal cost statement and inaccurately identifying contribution achieved profit per procedure, contribution per procedure and contribution per hour.
Some budget contextualisation offered with partial explanation of purposes and objectives with some limited citations with dubious origins.
Partial explanation of credible criticisms of traditional budgets though underpinned by dubious sources.
Partial reference to credible contemporary sources
Above Average Pass
Wide range of financial analysis techniques evident supported by full disclosure of formulae and accurate calculation in clear format as taught on the course.
Presenting the financial information in accordance with the method and the multi-product and total marginal cost statement taught on the course and accurately identifying contribution achieved, profit per procedure, contribution per procedure and contribution per hour
Identification of budget contextualisation offered with full explanation of purposes and objectives with a range of credible citations.
Identification and explanation of criticisms of traditional budgets underpinned by credible sources.
Full reference to credible contemporary sources
1ii. Narrative Analysis (12%)
2 ii Revised Marginal Cost Statement
Fail
Not presented in business report format with no supporting appendices. Descriptive rather than analytical. Poor narrative structure and inadequate grammar lacking an overall knowledgeable synthesis
Failure to present the financial information in the multi-product and total marginal cost statement format required and inaccurately re-apportioning the fixed overheads to derive inaccurate product performance and total profits.
Failing to make to rational financial decision based on the calculated management accounting data.
Bare Pass
Attempt at a business report format with some supportive appendices. Mainly descriptive with some attempt at synthesis. Grammar and structure being adequate.
Some inaccurate and partial attempt to present the financial information in the multi-product and total marginal cost statement format required and partially accurately re-apportioning the fixed overheads to derive inaccurate product performance and total profits.
Some attempt to make the rational financial decision based on flawed calculated management accounting data and incorrect methods.
Above Average Pass
In business report format and coherently structured and supported by referenced appendices. Effectively synthesises the calculative narrative into an informed narrative
Accurate multi-product and total marginal cost statement with accurate reapportionment of the fixed overheads. And making the correct decision based on marginal cost accounting principles.
2iii Proposed Contract
Fail
Inaccurate evaluation of the proposal by failing to employ marginal cost accounting to the decision-making process and drawing the wrong conclusion
Bare Pass
Partial but inaccurate evaluation based on marginal cost accounting leading to misleading conclusions.
Above Average Pass
Accurate evaluation based on marginal cost accounting techniques to derive the financially rationale decision.
Q1
Vodafone Group Plc is a British multinational which is one of the worlds largest mobile telecommunications companies with over 404 million subscribers. 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 capitalisation of £89.323 billion as of 5th April 2013 when its share price stood at 182.6p
(2012-07-06)[update]Presented below are its financial statements for the period 2008-2012.
Vodafone Group Plc
Year ended
Year ended
Year ended
Year ended
Year ended
Statement of Comprehensive
31st March
31st March
31st March
31st March
31st March
Income
2012
2011
2010
2009
2008
£m
£m
£m
£m
£m
Revenue
46,417
45,884
44,472
41,017
35,478
Cost of sales
-31,546
-30,814
-29,439
-25,842
-21,890
Gross profit
14,871
15,070
15,033
15,175
13,588
Selling & Distribution Costs
-3,227
-3,067
-2,981
-2,738
-2,511
Administration Expenses
-5,075
-5,300
-5,328
-4,771
-3,878
Share of result in associates
4,963
5,059
4,742
4,091
2,876
Impairment losse
s
-4,050
-6,150
-2,100
-5,900
0
Other income and expense
3,705
-16
114
0
-28
Operating profit
11,187
5,596
9,480
5,857
10,047
Finance income
456
4331
716
795
968
Finance costs
-2,094
-429
-1,522
-2,463
-2,014
Profit on ordinary activities before taxation
9,549
9,498
8,674
4,189
9,001
Income tax charge
-2,546
-1,628
-56
-1,109
-2,245
Profit for the year
7,003
7,870
8,618
3,080
6,756
Vodafone Group Plc
31st March
31st March
31st March
31st March
31st March
Comprehensive Statement of Position
2012
2011
2010
2009
2008
£m
£m
£m
£m
£m
Assets
Non-current assets
Goodwill
38,350
45,236
51,838
53,958
51,336
Intangible assets
21,164
23,322
22,420
20,980
18,995
Property, plant and equipment
18,655
20,181
20,642
19,250
16,735
Investments in associates
35,108
38,105
36,377
34,715
22,545
Other investments
791
1,381
7,591
7,060
7,367
Deferred tax assets
1,970
2,018
1,033
630
436
Post Employment Benefits
31
97
34
8
65
Trade and other receivables
3,482
3,877
2,831
3,069
1,067
Total Non Current Assets
119,551
134,217
142,766
139,670
118,546
Current assets
Inventory
486
537
433
412
417
Taxation recoverable
334
281
191
77
57
Trade and other receivables
10,744
9,259
8,784
7,662
6,551
Other investments
1,323
674
388
0
0
Cash and cash equivalents
7,138
6,252
4,423
4,878
1,699
Total Current Assets
20,025
17,003
14,219
13,029
8,724
Total Assets
139,576
151,220
156,985
152,699
127,270
Equity
Share capital
3,866
4,082
4,153
4,153
4,182
Share premium account
154,123
153,760
153,509
43,008
42,934
Treasury Shares
-7,841
-8,171
-7,810
-8,036
-7,856
Retained profits/losses
-84,184
-77,661
-79,655
-83,820
-81,980
Other Reserves
10,971
15,545
20,184
130,857
120,763
Total equity shareholders funds
76,935
87,555
90,381
86,162
78,043
Non-controlling interests
1,267
6
429
-1,385
-1,572
Total Equity
78,202
87,561
90,810
84,777
76,471
Liabilities
Non-current liabilities
Long-term borrowings
28,362
28,375
28,632
31,749
22,662
Taxation liabilities
250
350
0
0
0
Deferred tax liabilities
6,597
6,486
7,377
6,642
5,109
Post employment benefits
337
87
237
240
104
Provisions
479
482
497
533
306
Trade and other payables
1,324
804
816
811
645
Total Non Current Liabilities
37,349
36,584
37,559
39,975
28,826
Current liabilities
Short-term borrowings
6,258
9,906
11,163
9,624
4,532
Taxation liabilities
1,898
1,912
2,874
4,552
5,123
Provisions
633
559
497
373
356
Trade and other payables
15,236
14,698
14,082
13,398
11,962
Total Current Liabilities
24,025
27,075
28,616
27,947
21,973
Total liabilities
61,374
63,659
66,175
67,922
50,799
Total equity and liabilities
139,576
151,220
156,985
152,699
127,270
Additional Information
Date
31st Mar 2012
31st Mar 2011
31st Mar 2010
31st Mar 2009
31st Mar 2008
Company share price
162.44p
157.83p
128.19p
97.10p
113.39p
FTSE100 Share Index
5,768.50
5,908.80
5,679.60
3,762.90
5,702.10
Required
Write a business report to the board of directors of the company analysing the companys financial performance from 2008-2012.
50% Marks
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 companys overhead is currently apportioned on revenues to each surgical specialism. The following forecast data for 2014 is made available:
Medical Procedure
Hip
Knee
Shoulder
£ Income for 2014
4,800,000
8,000,000
2,400,000
£ Cost per procedure
8,000
10,000
6,000
Av time per procedure in hours
2
1.2
1.5
£ Surgeons fee per procedure
1,200
1,800
1,500
% of procedures with complications
8
5
10
£ surgeons fee consultation 2014
300
300
300
£ cost medical supplies per procedure 2014
400
200
300
Overheads
£
Theatre preparation
864,000
Operating theatre usage
144,9000
Nursing and ancillary services
5,428,000
Administration
1,216,000
Other overheads
923,000
Total overheads
9,880,000
Required
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
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.
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.
30% Marks
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 dont see the point of it. It tells us what we cant afford but it doesnt keep us from buying it. It simply makes us invent new ways of manipulating figures. If all levels of management arent 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.
20% Marks
TOTAL 100%
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