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ACCFIN5240/5241/5242 Financial Information Management
发布时间：2022-04-26
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Financial Information Management, ACCFIN5240/5241/5242
Question 1
Universe Plc and Galaxy Plc operate in the same industry. These companies’ financial statements for the year ended 31 December 2020 are summarised below.
Statement of Financial Position as at 31 December 2020
Fixed/Non-current assets
Property, plant and equipment
Current assets
Inventory
Receivables/Debtors
Cash
Total Current Assets
Total Assets
Less: Current liabilities
Payables/Creditors
Other payables
Bank overdraft
Total Current Liabilities
Non-current liabilities
Borrowings - bank loan
Net Assets
Share capital and reserves
Universe
Plc
(£’000)
1,400
480
420
20
920
2,320
300
50
320
(670)
(400)
1,250
Galaxy Plc
(£’000)
800
400
350
30
780
1,580
160
60
320
(540)
(600)
440
Issued share capital 1,100 300
Reserves 150 140
1,250 440
Income Statement for the year ended
31 December 2020
Sales Revenue
Cost of sales
Gross profit
Operating expenses
Depreciation
Operating profit
Interest
Profit before taxation
Taxation
Net profit after tax
Dividends
Retained profit
|
Universe Plc (£’000) |
Galaxy Plc (£’000) |
|
5,100 |
3,700 |
|
(3,200) |
(2,400) |
|
1,900 |
1,350 |
|
(950) |
(600) |
|
(200) |
(160) |
|
750 |
590 |
|
(30) |
(60) |
|
720 |
530 |
|
(330) |
(230) |
|
390 |
300 |
|
(260) |
(220) |
|
130 |
80 |
Additional Information
• As at 31. 12.2020, the market price per share of Universe PLC and Galaxy PLC were £5 and £6 respectively.
• The number of ordinary shares outstanding for the year ended 31.12.2020 for Universe PLC and Galaxy PLC were 1,000,000 and 500,000 respectively.
Required:
(a)Calculate the following ratios for both companies
1) Return on capital employed (ROCE)
2) Operating profit margin
3) Gross profit margin
4) Return on Equity
5) Current ratio
6) Acid test ratio
7) Interest cover ratio
8) Debt to Equity ratio
9) Earnings per Share (EPS)
10) P/E Ratio
Show the formulas and workings.
(30%)
(b) Based on the calculations, prepare a short report for the management of Galaxy Plc. In this report, address the following questions: how do you compare the performance of Galaxy Plc with that of Universe Plc? What advices would you offer to the management of Galaxy Plc’s about the company’s performance (i.e. profitability, liquidity, gearing and investor)? What are the possible problems of using ratio analysis to interpret a company performance in general?
(20%)
Total 50%
Question 2
Consider the Media General case which is provided.
Prepare a short report for the Media General management emphasising the following aspects:
2.1 After the implementation of the Balanced Scorecards, major changes occurred in the overall performance management system.
(25%)
2.2 Despite this new practice, remaining issues to be addressed and possible avenues of tacking those issues.
(25%)
Total 50%
Question 3
As you have learned, financial accounting information is aimed at different users who might have different needs. Referring to those different users, discuss how and why the needs of users can be conflictual.
Total 50%
Question 4
You have studied that short-term and long-term decisions are made based on some established techniques. Considering those techniques, critically discuss the extent to which they can be useful for business decisions.
Total 50%
