Financial Management Assignment

Topics: Net present value, Balance sheet, Internal rate of return Pages: 7 (970 words) Published: December 25, 2011
UNIVERSITY OF SUNDERLAND

LEVELM

MODULE:FINANCIAL MANAGEMENT & CONTROL
ASSIGNMENT CODE:PGBM01
TUTOR:Mr.Sum
DUE DATE:20/01/2012
Return date:20/01/2012

Assessment weight:100% of module

Outcomes Assessed:

All module learning outcomes, knowledge and skills, are assessed in this assignment.

This assessment is in four parts, please answer all elements.

Please note that this is an individual assignment and the policy of the University on “Policy on Cheating, Collusion and Plagiarism” applies. Please write your Tutor’s name clearly on the front of the assignment. Part A

Prospect Plc2

You are a financial analyst at Prospect Plc; a public limited company specialised in manufacturing and distributing office furniture. The Board of Directors have looked into the financial statements of the company for the last two years and have raised a concern about the company’s profitability and liquidity. The financial statements of Prospect for the last two years are given below

Profit and loss account for the year ended 31 December

| | 2011 | 2010 | | |£000 |£000 |£000 |£000 | |Sales | |12,650 | |11,000 | |Cost of sales: | | | | | | Opening stock | 250 | | 200 | | | Manufacturing costs |6,880 | |5,200 | | | Closing stock | 350 | | 250 | | | | | 6,780 | | 5,150 | |Gross profit | | 5,870 | | 5,850 | |Selling and distribution expenses |2,100 | |1,150 | | |Administrative expenses |1,250 | |1,200 | | |Bad debts written off | 350 | | 150 | | | | | 3,700 | | 2,500 | |Operating profit before interest and tax | | 2,170 | | 3,350 | |Interest payable | | 500 | | 350 | |Profit before tax | | 1,670 | | 3,000 | |Income tax | | 590 | | 1,100 | |Profit after tax | | 1,080 | | 1,900 | |Dividends paid | | 80 | | 50 | |Retained profit for the year...
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