Coursework Task

This assignment is designed to assist you to understand and apply financial analysis concepts and techniques in the specific context of the sports industry.

Scenario

You are part of the accounting and finance department of an organisation operating in the sports industry, obvious examples being football, basketball, rugby, ice-hockey, tennis and cricket. The CEO has asked you to provide a detailed analysis on one area of the firm’s performance, based on the last three years of financial statements.

You should choose one of the following areas:

. Profitability (revenue, overheads margins, ROCE decomposition)

. Working capital (inventory, receivables, payables, unearned income)

. Capital structure (sources of financing and their appropriateness)

Some basic guidance points:

. You  should  ensure  you  choose  a  sports  organisation  where  there  have  been  some interesting changes in the specific area you are focused on.

. You will need to calculate the performance metrics relevant to the area you are examining to guide you with this analysis.

. Your analysis should be supplemented with any other information that you believe to be relevant. You should identify any limitations to, and constraints, on your analysis.

. You must not choose any of the companies discussed in detail in the lectures or seminars. If in any doubt, please ask the module tutor for guidance on your company selection.

Task

Prepare:

.    A 1,000-word written report of your key findings focusing on the most important of them.

.    Your report should include the extracts from the financial statements that you used to calculate the metrics referred to in your report in the appendices.

.    The word limit does not include tables, references and metric workings. Tables, metrics and charts should be included in the report and not added in appendices, although the workings for the metrics should be in the appendices.

.    The report should be submitted through the on-line submission point on the module Learn page as a single PDF file.  Your submission will be checked within Turnitin to ensure that your work is original and does not overlap with other submissions.

Guidance Notes

Substance

Your statements and figures for the analysis detailed above should provide sufficient detail on research, assumptions and compilation of the figures produced such that the CEO will be able to see clearly that:

. The changes you have identified are clear as are the implications for the business going forward.

. Your analysis has been well researched.

. You have thought through potential issues and have made appropriate choices in terms of which metrics to use.

. You have understood the principles and methods covered in the module.

You can assume that the CEO has a reasonable level of financial literacy and that you do not   need to explain common accounting terms, what each of the metrics shows or their definitions.

Metrics

You can use the following definitions if helpful. Note no attribution is needed nor do you need to repeat these widely used definitions in your report.

Working capital activity metrics

.    Inventory days = inventory /cost-of-sales x 365

.    Days-sales-outstanding = trade receivables / revenue x 365 [revenue from credit sales]

.    Days-purchases-outstanding = Trade payables / cost-of-sales x 365

.    Working capital cycle = inventory days +days-sales-outstanding days -days-purchases- outstanding

Derived balance sheet values

.    Working capital = current assets –current liabilities

.    Capital employed = non-current liabilities +owners’ equity = working capital +non-current assets = Operating assets

Financing metrics

.    Current ratio = current assets / current liabilities

.    Debt to equity = Total debt/Shareholders’ funds

Margins

.    Gross margin = gross profit / revenue

.    Operating margin = profit before interest and tax (PBIT) / revenues = Gross margin - overheads margin

.    Net margin = profit after tax / revenue

.    Cost-income ratio = other operating expenses / gross profit = efficiency ratio

Profitability

.    Return on capital employed = PBIT / capital employed = asset turnover x operating margin

.    Return on equity = profit after tax / owners’ equity = net profit margin x asset turnover

Other Information

All marks are provisional until ratified by the formal examination boards.

You need to ensure you back up your coursework and any other important documents. Information on data storage can be found here:

http://www.lboro.ac.uk/services/it/student/storage/

Losing your work through technical failure is not a valid reason for a Mitigating Circumstances claim or a coursework extension request.

If you have any other problems with meeting the deadline for this coursework you may wish to request a 48-hour extension and/or submit a Mitigating Circumstances claim. This must be

requested in advance via:

Coursework Extension Link:https://www.lboro.ac.uk/students/handbook/exams/extensions/

Mitigating Circumstances Link:https://www.lboro.ac.uk/students/handbook/exams/mitigating-  circumstances/

Word Count and Format

The word count guide for the document is not more than 1,000 words.  Please state the   word count on the first page of your assignment. As stated above, the word limit does not  include tables, references and metrics workings. Tables, metrics and charts should be included in the report and not added in appendices, although the workings for the metrics should be in    appendices.

All material (academic and other) that you cite should be properly referenced in the text and in the reference list (in Harvard style) at the end of your report.

Coursework Marking Rubric

Students’ work will be assessed as follows:

Written Report                                    100%

Please see the rubric at the end of this coursework brief for further details of the criteria against which you will be assessed, and descriptors of performance on the coursework for each assessment criterion.

Coursework Submission

Submission date

You are required to submit your coursework via the on-line submission point on the module Learn page by Friday, 22nd  March, by 11.00am.

Return of marked work

Work will be marked and handed back before the commencement of the exams. The deadline date is provided above.

The deadline date is provided above.  One electronic copy must be uploaded to the submission point for the module on LEARN by the submission deadline.

You must use the following file naming convention for your work.  You should not include your name anywhere on your assignment.  You should also include the filename in the   header of your assignment.

StudentNumber – Module code – Coursework component (e.g. F123456-23BSP123-CW1)

Your submission should be one document only (i.e. no loose appendices etc), preferably in    Word or as a pdf (not scanned copy).  If your assignment consists of different documents in   varying formats you will need to embed them in a Word document or convert them to pdf and upload one document.  The file size limit for your submission is 20MB.