Finance for Strategic Managers Assignment

Assignment Scenario

Pietro Yon, a local businessman, owns and manages several retail stores that sell a range of
electronic goods.

Pietro is a member of the local business Chamber of Commerce and has been asked to
chair a committee to research and study the success of Samsung Electronics Co. Ltd. The
Chamber believes that there may be some useful learning from this study which members of
the Chamber could use. You have been asked to provide specialist support to the
committee, including producing a range of materials for members of the committee to use.
You have been provided with the following link to view Samsung Electronics Co. Ltd annual
reports and investor information.

Task 1

You must produce a presentation for Pietro Yon to use at the next committee meeting. The
presentation should be based on your research of Samsung Electronics Co. Ltd. and other
relevant information. It must be accompanied by supporting notes.

Your presentation must include the following:

• An evaluation of the sources of financial data which can be used to inform business
  strategy
• An assessment of the importance of financial data and information in the formulation
  of business strategy
• An analysis of the risks related to financially based business decisions.
• A review of techniques that can be used to appraise strategic capital expenditure
  projects

Task 2

A meeting has been arranged with Pietro Yon and other members of the committee and you
have been asked to produce a discussion paper which provides:

• An interpretation of the financial statements of Samsung Electronics Co. Ltd. to
  assess the current viability of the organisation 
• A comparative analysis of financial data using ratio analysis for Samsung Electronics
  Co. Ltd. You are advised to download consecutive year’s accounts from the
  Samsung Electronics Co. Ltd. website

Extension activities

To achieve a Merit, you must:

• Add further sections to your discussion paper that makes recommendations to
Samsung Electronics Co. Ltd. based on your analysis and interpretation of the
financial position

• Produce an information leaflet for the Chamber of Commerce to distribute to the
members. The leaflet should assess the following:

o The limitations of ratio analysis as a tool for strategic decision making.
o The importance of cash flow management when evaluating proposals for capital
expenditure

To achieve a Distinction, you must prepare an additional section for the leaflet that
recommends methods and tools that allow businesses to analyse financial data for strategic
decision-making.

Task 3

Pietro Yon has been supplied with information from a component manufacturer who has
asked for advice on the best project to accept for the purchase / replacement of a piece of
machinery.

The company is considering selling its old machine that has a capital cost of £260 000 and
replacing it with an up-to-date model costing £220 000. For immediate purchase, the
company will receive £120 000 part exchange allowance.

Both the current and new machines can meet the expected company demand, estimated at:

Year Units
1 90 000
2 50 000
3 30 000

After three years, it is predicted that demand will be zero due to the technological
developments in the industry

The following data has been provided for the existing and new machine:

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