Master of Business Administration

FINANCIAL & MANAGEMENT

ACCOUNTING

ASSIGNMENT

2018 – 2019

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Financial and Management Accounting Assignment – Group Assignment

You are required to submit a group assignment. Groups should be a maximum of

FOUR students. In the marking of the assignment the size of the group will be a
factor in the overall mark. This assignment will account for 50% of the total mark for
the class, the other 50% is the FMA exam.

Part A (70 marks)

The Aim of Part A of the Assignment

The aim of Part A of this assignment is to enable you to be familiar with the
information in annual reports and develop your skills in interpreting the information
content of financial statements of companies by using financial ratios and other
financial indicators.

Question
You have been recently been invited to be interview for a management position in
finance for a listed company. For your interview with the board you have been asked
you to prepare a two part report:

i. The first part will analyse the past financial performance of the
company based solely on public information available. Financial
statements to be examined will include statement of financial position
(balance sheet), income statement (profit and loss), and cash flow
statement. At a minimum the Chief Executive is expecting analysis of
the last three years to be discussed. The Chief Executive always pays
close attention to what competitors are doing and how the firm is
performing in relation to the industry and other benchmarks. Therefore
industry/peer comparative analysis should be included in your report.
The analysis will consist of financial ratios, percentage change
statements and any other relevant financial indicators. All calculations
are to be presented in an appendix.

ii. The second part requires that after reviewing the past financial
information and making a comparison with benchmarks you are
expected to provide suggestions on how to improve the future financial
performance of the firm.

Note the focus of this assignment is on financial performance. You can structure
this report in any way that you think would be appropriate but the Board will be
expect you to show a clear understanding of past financial performance and
importantly based on this evidence give clear recommendations on the financial
position going forward.

You have to select a listed company. This is a great opportunity to learn more about a
company or industry you are interested in. Send the name of your company to your
local counsellor or lecturer, if you do not have a local counsellor. This is to ensure is a

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suitable company for you to analyse. Before submitting your company for approval,
ensure that the information that you will need is shown in the annual report as some
companies disclose more than others. Also, check that there are at least two other
companies in the same industry that can be used as a benchmark in terms of the
performance and financial position of your company. It is unlikely that you will find a
company that is an exact match but you should consider the broad industry base in
which the companies function. It is your responsibility to ensure that necessary
information is available for your analysis.

Sources of Information
Your main source of information is the annual report which will be available on the
company’s website. The company website may have more information in the section
for ‘investor relations’. You may wish to use other reference sources that are available
on the university library website. Give clear reference to all sources used and
numbered footnote references should be included in the text of your report.

Part B (30 marks)

The Aim of Part B of the Assignment

The aim of Part A of this assignment is to enable you to be familiar with the financial
information that is used internally within the firm, specifically considering the use and
importance of budgets.

Question

After your appointment to the company you discover that one of the finance related
problems is the limited acceptance by management and employees of the budgeting
process. This subsequently leads to budgets not being adhered to. The Chief
Executive has asked you to try and address this problem by producing a report for
management and employees that:
i. Discusses possible reasons why budgets can fail and are not accepted by
managers/employees.
ii. Provides arguments of how you can overcome these problems and highlight
the advantages of budgets.
iii. Give examples of the different types of budgets that you would expect to see
in your chosen company.

Students should try and connect their answer to Part B to their chosen company in
Part A. However students may also want to consider creating a simple fictitious
example budget that would show the management and employees how all of the
individual budgets flow in to the master budget for part iii).