AC4052 Financial Accounting 2022-2023

017081500

AC4052 Financial Accounting 2022-2023

Assessment Component: Coursework

Weighting: This Coursework contributes 100% to the Overall Module Mark

Word count: Section A 1200 words and Section B 300 words

Total 1500 words

Submission: Students to submit to Turnitin via module Weblearn

Deadline: 28th December 2022

Requirements:

This coursework has two sections. Section A has one question and Section B has two questions. ANSWER ALL QUESTIONS IN BOTH SECTIONS.

SECTION A

This assignment requires each student to work on the published financial statements of Marks and Spencer plc for the last three years from 2020 to 2022.

You are required to write a report to evaluate the performance, liquidity and financial structure of the three years from 2020 to 2022.

You should use the accounting ratios shown below and any other information relevant to Marks and Spencer plc. Information can be accessed from the annual report and accounts and any other source of evidence that you believe helps to explain the companys performance and position.

You should also highlight any limitations in the use of accounting ratios that you found in your analysis and evaluation of the company over the three-year period. This may include reference to the movements in the companys share price.

Total 40 Marks

MARKS AND SPENCERS PLC

YEAR END 02/04/2022 27/03/2021 28/03/2020 30/03/2019

Profitability ratios

Return on Shareholders Funds (%) 8.39 -6.33 1.06 2.07

Return on Capital Employed (%) 4.59 -3.32 0.59 1.44

Return on Total Assets (%) 3.62 -2.58 0.50 1.11

Profit margin (%) 3.72 -2.91 0.59 1.05

Gross margin (%) 34.49 31.80 35.28

Operational ratios

Net Assets Turnover (x) 1.24 1.14 1.01 1.37

Fixed Assets Turnover (x) 1.21 1.04 1.24 1.82

Interest Cover (x) 2.89 -0.16 1.26 1.97

Debtor Collection (days) 3.29 4.23 5.26 4.17

Creditors Payment (days) 24.57 42.17 33.81 32.05

Structure ratios

Current ratio (x) 0.92 0.68 2.03 1.83

Liquidity ratio (x) 0.62 0.42 1.73 1.51

Asset Cover (x) 3.04 2.83 3.10 211.11

Gearing (%) 84.33 102.77 83.36 53.44

Per employee ratios

Profit per employee (unit) 6,033 -3,820 771 1,357

Turnover per employee (unit) 162,256 131,084 130,485 129,559

Salaries/Turnover 13.67 15.70 14.38 14.56

Average Remuneration per employee (unit) 22,173 20,584 18,767 18,865

SOURSE FAME LINK BELOW

https://fame-r1.bvdinfo.com/version-20220928-3023-96/fame/1/Companies/report/Index?format=_worksheet&WorkSheetSection=PROFILE&seq=0

SECTION B

Question 1

Mr and Mrs Evgeni run a private company, Evgeni Gifts Ltd, selling gifts and Jewellery items from the Far-East. Mr Evgeni has asked you to prepare set of financial statement for the year ended 31 December 2021 as soon as possible. The companys accountant had to take time off due to health issues. The following balances have been extracted from the records of the company for the year ended 31 December 2021.

Audit and Accountancy 1,100

Advertising 1,000

Bank 1,750

Creditors 9,200

Long Term Bank Loan 2,900

Debtors 43,250

Directors remuneration 52,000

Electricity 3,200

Insurance 1,950

Fixtures and Fittings

At Cost 120,000

Accumulated depreciation (at 1.1.2021) 45,000

Motor Vehicle

At Cost 48,000

Accumulated depreciation (at 1.1.2021) - 2,650

Office expenses 6,300

Ordinary 1 shares (issued and fully paid) 25,000

Profit and loss account (at 1.1.2021) 26,075

Purchases 195,000

Rent and rates 8,200

Sales - 410,000

Stock (at 1.1.2021) 15,200

Wages and salaries 23,500

Bank Interest 375

520,825 520,825

Additional Information:

Stock at 31st December 2021 valued at cost amounted to 22,500.

Depreciation is to be provided on fixtures and fittings at 20% on cost, and at 10% on reducing balance method for motor vehicle.

Provision is to be made for electricity for 725.

Insurance paid in advance at 31st December 2021 was 525.

Required

Prepare Income statement for the year ended 31st December 2021.

(10Marks)

Prepare Balance Sheet as at 31st December 2021. (15 Marks)

Identify FIVE accounting concepts that have been applied in the preparation of financial Statements and explain their meaning. (10 Marks)

Total 35 Marks

Question 2

The following Balance Sheets of financial positions for the year ended 31st December 2020 and 2021 have been prepared for Boris Limited.

Statement of financial positions at: 31.12.21 31.12.20

Fixed Assets Plant and machinery at cost 53,000 53,000 Less: Depreciation (11,000) (9,000) 42,000 44,000

Investments at cost - 18,000

Current assets Inventory 33,000 24,000 Trade receivables 27,000 18,000 Cash - 8,000 60,000 50,000

102,000 112,000

Capital and reserves Ordinary share capital 50,000 50,000 Share premium account 9,000 9,000 Retained earnings 12,000 8,000 Shareholders' funds 71,000 67,000

Long-term liabilities Loans - 27,000

Current liabilities Trade payables 22,000 18,000

Bank overdraft 9,000 31,000 102,000 112,000

Additional information:

There were no purchases or sales of plant and machinery during the year.

Required

Mr Boris has asked you to prepare Boris Limiteds statement of cash flows for the year ended 31st December 2021. (18 Marks)

Write a short memo to Mr Boris explaining the findings of your statement of cash flow. (7 Marks)

Total 25 Marks

Marking criteria for section A:

Explanatory comments on the assessment criteria Maximum marks for each section

Recommended marks

Assessment criteria:

(guidelines suggested under FOUR MAIN HEADINGS) Introduction Background of the business and its operations 10%

Interpretation of ratios

Relevance, clear demonstration of understanding and applied in context 70 %

Conclusion Identifying the key points raised in the report 10 %

Format, referencing, bibliography, use of tables/charts Structured analytical report with supporting referencing where appropriate 10%