INDIVIDUAL ASSIGNMENT

TRIMESTER 1, 2017

ACC1100 ACCOUNTING FOR DECISION MAKING

Assessment task

Due date: / Friday 12thMay 2017 at Midnight-Week 10
Weighting: / 25%
Length: / 2000 words
Learning outcomes assessed: / 2, 4, 5, 7
Graduate attributes demonstrated: / Discipline-Specific Knowledge
Workplace skills and qualities
Communication proficiency
Critical thinking and problem-solving skills

The task:

You are required to write a 2000 word report/essay on analysis & interpretation of financial statements.

This assessment task is designed to address learning outcomes 2, 4, 5, and 7 as published in the Unit Profile.

Information

The owner of Melbourne Trading Corporation has provided you with the following financial information.

Income Statement / 2014 / 2015 / Budget year 2016
Sales / 400,000 / 405,000 / 410,000
Less Cost of Sales / 250,000 / 260,000 / 275,000
Gross profit / 150,000 / 145,000 / 135,000
Less Other expenses
Selling expenses / 50,000 / 55,000 / 56,650
Administration expenses / 40,000 / 42,000 / 39,900
Finance expenses / 10,000 / 11,500 / 13,800
Profit (before interest) / 50,000 / 36,500 / 24,650
Interest expense / 15,000 / 18,000 / 20,000
Net profit / 35,000 / 18,500 / 4,650
Statement of Financial Position / 2014 / 2015 / Budget year 2016
Current assets (Note: 1) / 93,000 / 90,000 / 90,000
Non-current assets / 90,000 / 110,000 / 212,000
Total assets / 183,000 / 200,000 / 302,000
Current liabilities (Note: 2) / 28,000 / 42,000 / 80,000
Non-current liabilities / 70,000 / 89,500 / 167,350
Total liabilities / 98,000 / 131,500 / 247,350
Total equity / 85,000 / 68,500 / 54,650
Note: 1 - Current assets include:
  • Accounts receivable
/ 23,000 / 30,000 / 40,000
  • Stock on hand
/ 40,000 / 45,000 / 50,000
Note: 2 - Current liabilities include:
  • Bank overdraft
/ 35,000

Required

You have been asked to analyse the company’s financial statements and write a report to the company directors which:

a)Reports on the profitability and financial stability of the company

b)Makes recommendations to improve financial performance

Notes:

  1. In your report the owner would like you to provide written answers in the form of a report style Format to each of the following questions regarding the accounts.

Question 1Is the business providing its owners with a satisfactory return?

Question 2Has the entity managed to control its level of debt?

Question 3What has debt been used for?

Question 4Have assets been effective in producing sales and profits?

Question 5Have expenses been kept under control?

Question 6Is the entity’s short term liquidity sound?

Question 7Has the Operating Cycle assisted the entity’s liquidity position?

Question 8Provide recommendations that will improve profitability, liquidity and financial stability.

  1. Your report should include at least 4 graphs comparing ratios and an appendix that shows your calculations for each ratio. Below you will find a table that includes data and ratios that you must complete and submit.

Financial indicator / Expressed as / Expressed as
Profitability / Financial Stability
Return on owners funds ratio / % / Short-term
Return on assets ratio / % / Working capital / $
Gearing ratio / % / Working capital rate / $
Asset turnover rate / $
Fixed asset turnover rate / $ / Stock turnover rate / days
Stock turnover / days / Debtors turnover rate / days
Debtors turnover / days / Operating cycle / days
Profit ratio / % / Long-term
Gross profit ratio / % / Gearing ratio / %
Cost of goods sold ratio / % / Interest coverage rate / $
Selling expense ratio / %
Administration expense ratio / %
Finance expense ratio / %
Interest expense ratio

Your responses are to be prepared using a Word Processing package and be presented in a report style format with your name and student no. included in the footer

Your assignment should provide a basic structure as outlined in the section – Structure of Assignment.

Structure of assignment:

The following provides a guide to how you might structure your assignment:

Title page

Introduction

Discussion

Conclusion

References

Appendices (if applicable)

The conditions:

  • Students are expected to conduct research using peer-reviewed journal articles.
  • Students may use the prescribed text to guide your research, but it should not be used as a primary reference source.
  • The Harvard Referencing System (author-date) should be used.

[Harvard (Author-date) is based on: Commonwealth of Australia 2002, Style manual for authors, editors and printers, 6th edn, rev. Snooks & Co., John Wiley & Sons, Brisbane.]

Useful websites:

–"Harvard System of Referencing Guide". Anglia Ruskin University. 21 May 2012. Accessed 25 July 2013.

–“Rec Cite” , “Harvard Style”. University of Melbourne. Accessed 25 July 2013.

–Chernin, Ei (1988). "The 'Harvard system': a mystery dispelled", British Medical Journal. October 22, 1988, pp. 1062–1063.

Marking guide

You will be assessed according to the following marking scheme:

Performance Standard
Assessment Task Criteria / Weight / HD 80-100% / D 70-79% / C 60-69% / P 50-59% / F 0-49%
Knowledge & understanding / 30% /
  • In depth, expert knowledge.
  • Superior proficiency in application of knowledge to problem.
/
  • Expert knowledge
  • Proficient application of knowledge and understanding.
/
  • Competent level of knowledge
  • Accurate application of knowledge and understanding.
/
  • Superficial knowledge.
  • Some inaccuracies in knowledge and understanding.
/
  • Lack of knowledge
  • Significant inaccuracies in knowledge and understanding.

Logic of argument(s) / 25% /
  • Central argument(s) expertly developed
  • Topic covered in depth in a scholarly manner.
/
  • Central argument(s) clearly developed and supported by evidence
  • Topic covered in depth and is concise and fluent.
/
  • Central argument(s)developed and supported by evidence
  • Topic covered in depth but with some gaps,
/
  • Central argument(s) has been developed but not fully supported by evidence
  • Progression of argument and ideas not strong.
/
  • Lack of central argument(s) and evidence base
  • Argument incoherent and difficult to follow.

Analysis / 30% /
  • Expert scholarly demonstration of critical analysis
  • Conclusion draws argument in influential and scholarly manner.
/
  • Considerable demonstration of critical analysis
  • Comprehensive and competently developed conclusion
/
  • Good demonstration of critical analysis
  • Conclusion is logical outcome of argument(s).
/
  • Critical analysis partially evident but not fully developed
  • Conclusion is evident but not strong.
/
  • Critical analysis lacking or absent.
  • Conclusions poor or absent.

Research / referencing / 15% /
  • Expert scholarly use of wide range of relevant sources
  • Expert paraphrasing and referencing.
/
  • Scholarly use of wide range of relevant sources
  • Good application of paraphrasing and referencing.
/
  • Wide use of mostly relevant reference sources
  • Reasonable application of referencing.
/
  • Limited use of relevant references sources
  • Some inaccuracies in references and in-text citations.
/
  • Limited research or poorly researched
  • Considerable inaccuracies in references and in-text citations.

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