Reference no: EM133140230

Business Finance and Economics

Assignment task - The assignment requires a written report that addresses key aspects in relation to Business Finance and Economics taught in the module, such as the economic factors that determine the competitive environment of an organisation, the role and importance of accounting and financial reporting in terms of planning, control and decision-making. In addition, the report requires a numerical element that offers a solution to a set of key financial ratios and demonstrates an understanding of these in terms of organisational performance. The report must include relevant theories, concepts and formulas from which a solution will be offered.

Learning outcome 1: Explain how micro- and macroeconomics impact on the competitive environment of an organisation;

Learning outcome 2: Demonstrate knowledge of the role of accounting within the organisation with respect to both reporting and decision-making aspects;

Learning outcome 3: Explain the structure and terms used within the main financial statements;

Learning outcome 4: Interpret management accounting techniques for planning, control and decision-making within the organisation;

Learning outcome 5: Calculate the main accounting ratios and explain their significance in terms of organisational performance.

Address the following five questions / elements within the specified word limit:

Question 1) Outline the external and internal determinants of business performance and distinguish whether these are micro- or macroeconomic. (500 words)

Question 2) Explain the role and importance of accounting with respect to decision-making within an organisation. (500 words)

Question 3) Distinguish between the major financial statements and explain the layout and terms used within each Statement. (450 words)

Question 4) Using the information from the statements of financial position (balance sheets) and income statements (profit & loss accounts) below, calculate and interpret the following ratios for XYZ Plc for the years ended March 31 2019 and 2020, respectively: (400 words)

a) Operating Profit Margin
b) Gross Profit margin
c) Current Ratio
d) Acid Test Ratio
e) EPS (Earnings Per Share)

Notes relating to the above Statements:
i. The market value of the shares of the business at the end of the reporting period was £3.00 for 2019 and £2.00 for 2020.
ii. All sales and purchases are made on credit.
iii. At 1 April 2018, the trade receivables stood at £250 million and the trade payables at £210 million.
iv. A dividend of £40 million had been paid to the shareholders in respect of each of the years.
v. The business employed 14,000 staff at 31 March 2019 and 18,628 at 31 March 2020.
vi. The business expanded its capacity during 2020 by setting up a new warehouse and distribution centre.
vii. At 1 April 2018, the total of equity stood at £450 million and the total of equity and non-current liabilities stood at £650 million.

Question 5) Define management accounting and discuss how this is important for planning, control and decision- making within an organisation. (500 words)

Attachment:- Business Finance and Economics.rar