An individual written assignment of 3,000 words maximum is expected. Use the formal report format and include a Bibliography/ reference list of all books, journals and websites consulted in your research.
Assume that the financial analysis is aimed at potential investors who are currently considering investing in SKANSKA PLC. The financial performance evaluation will enable the potential investors decide whether to invest in this company.
SKANSKA PLC is a Construction Company based in UK. SKANSKA PLC started back in 1984. The company is planning to expand its operations to other countries in Europe in the next ten (10) years. The financial statements of SKANSKA PLC. are attached for your consideration and attention.
You are advised to incorporate the suggested amendments/feedback you received from the module leader during assignment briefing.
Required
TASK 1(1500 WORDS)
You are part of the Accounting and Finance team at SKANSKA PLC. Write a report to the Management of SKANSKA PLC, critically evaluating the importance of Accounting and Finance functions, duties and roles within SKANSKA PLC. Your evaluation must include some examples within the Company where appropriate.
(50 marks)
TASK 2(1500 WORDS)
Using the financial statements of SKANSKA PLC calculate the ratios required and comment on the company’s performance from an Investor with £1 million perspective.
(40 marks)
Marks will be awarded for Structure and Presentation skills. Structure includes the orderly presentation of relevant material. In addition, the extent of research evidenced by the appropriateness and adequacy of in-text referencing. There must be a Cover Page and Contents Page, paragraphs of Introduction, Conclusion and pages must be numbered.
(10 marks)
Assessment Criteria
You will obtain marks for the following:
Presentation of your work (report format, clarity of expression, referencing etc.) ……………….……………………….10%
The functions/roles/duties of accounting and finance team within SKANSKA PLC with appropriate examples. 40%
Ratio calculation……………………………………………………………………………………..………………………… 10%
Interpretation and analysis of the Ratios in relation to SKANSKA PLC performance……………… 40%
TOTAL MARKS 100%
The summarised financial statements of SKANSKA PLC, a Public company engaged in Construction, are shown below:
Statement of profit and loss:
For the year ended 31 Dec. 2018 For the year ended 31 Dec. 2019
£000 £000 £000 £000
Sales revenue 4,800 6,000
Cost of sales
Opening inventory 1,200 450
Purchases 2,700 4,800
3,900 5,250
Less: Closing inventory (450) (3,450) (900) (4,350)
Gross profit 1,350 1,650
Operating expenses (600) (675)
Finance cost (150) (300)
Net profit 600 675
Statement of financial position As at year to 31 Dec. 2018 As at year to 31 Dec. 2019
£000 £000 £000 £000
Non-current assets 2,955 6,000
Current assets
Inventory 450 750
Receivables – trade 900 1200
Prepayments 90 105
Cash 75 1,515 15 2,070
4,470 8,070
Issued share capital 900 900
Share premium account 300 300
Retained earnings 1,125 1,650
2,325 2,850
Non-current liabilities
10% loan notes 1,500 3,000
Current liabilities
Payables – trade 570 2,100
Accruals 75 645 120 2,220
4,470 8,070
