Financial decision making

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1
SKANSA PLC is a Construction Company based in UK. SKANSA 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 summarised financial statements of SKANSA PLC, a Public company engaged in Construction, are
shown below.
Statement of profit and loss:
Assignment task
Assignment Brief Academic Year 2022-23

Module code
and title:		 BM414 Financial decision
making		 Module leader: Dr Ioannis Karfakis
Assignment
No. and type:		 CW1: 2500-word report to
include business
calculations/ratios		 Assessment
weighting:		 100%
Submission
time and date:		 02/06/2023 before 2 pm Target feedback
time and date:		 3 weeks after submission
deadline

 

For the year
ended 31 Dec.
2020		 For the year ended
31 Dec. 2021
£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

Internal approval: Mihaela Vasiliu 21/09/2022
2

Statement of financial position As at year to 31 Dec.
2020		 As at year to 31
Dec. 2021
£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

3
An individual written assignment of 2,500 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
SKANSA Plc. The financial performance evaluation will enable the potential investors decide whether to
invest in this company.
You are advised to incorporate the suggested amendments/feedback you received from the module leader
during assignment briefing.
TASK 1
You are part of the Accounting and Finance team at SKANSA PLC.
Write a report to the Management of SKANSA PLC, critically evaluating the importance of Accounting and
Finance functions, duties and roles within SKANSA PLC. Your evaluation must include some examples
within the Company where appropriate.
TASK 2
a. Using the financial statements of SKANSA PLC, calculate the following five ratios for each of the
two years:
1. Return on capital employed
2. Net profit margin
3. Current ratio
4. Average Receivable days/ Debtors collection period
5. Average Payable days/ Creditors collection period
b. Comment on the company’s performance from an Investor with £1 million perspective.
The interpretation and analysis of the Ratios in relation to SKANSA PLC’s performance is required
here. Results from and position between the two (2) years should be revised, explained and analysed,
mentioning possible causes, reasons and effects for the changes in the ratios.
4

This assignment has been designed to provide you with an opportunity to demonstrate your
achievement of the following module learning outcomes:
LO 1: Demonstrate knowledge of the role of finance and accounting within the organisation with
respect to both reporting and decision-making aspects.
LO 2: Explain the structure and terms used within the main financial statements.
LO 3: Apply management accounting techniques for planning, control and decision-making within
the organisation.
LO 4: Calculate the main accounting ratios and explain their significance.

 

Referencing and presentational requirements
Please reference your work using the Harvard style as defined in Cite Them Right Online
(http://www.citethemrightonline.com). This information is also available in book form: Pears, R. and
Shields, G. (2019) Cite them right: the essential reference guide. 11th ed. Basingstoke: Palgrave
Macmillan. Copies are available via the University library.
Additional requirements: There must be a Cover Page and Contents Page, paragraphs of Introduction,
Conclusion and pages must be numbered.

 

Submission details
This assignment should be submitted electronically using the relevant submission point in the Upload My
Assignment section of LSST Connect.
Please ensure that your work has been saved in an appropriate file format. Turnitin will only accept
the following file types: Microsoft Word, Excel or power Point, PDF. Your file must also contain at
least 20 words of text, consist of fewer than 400 pages and be less than 40MB in size.
You can submit your work as many times as you like before the submission date. If you do submit
your work more than once, your earlier submission will be replaced by the most recent version.
Once you have submitted your work, you will receive a digital receipt as proof of submission, which
will be sent to your LSST email address. Please keep this receipt for future reference, along with
the original electronic copy of your assignment.
You are reminded of the University’s regulations on academic misconduct, which can be viewed on
the University website: https://www.bucks.ac.uk/current-students/registry-helpdesk-and-academic
advice/academic-integrity-and-misconduct In submitting your assignment, you are acknowledging
that you have read and understood these regulations.

5

Please also note that work that is submitted up to 10 working days beyond the submission date will be
considered a late submission. Late submissions will be marked and the actual mark recorded but will be
capped at the pass mark (typically 40%), provided that the work is of a passing standard. Work submitted
after this period will not be marked and will be treated as a non-submission.

 

Academic integrity
Academic integrity means taking responsibility for your own work.
When you submit an assignment, you are effectively making a declaration that it is your own work and that
you have acknowledged the contribution of others and their ideas in its development (for example, by
referencing them appropriately).
For further information and guidance, please see the University website: https://www.bucks.ac.uk/current
students/registry-helpdesk-and-academic-advice/academic-integrity-and-misconduct
You are also expected to take responsibility for maintaining and managing confidentiality issues in your
work. You should maintain and respect confidentiality in relation to the protection of personal, technical
and/or commercial information of a sensitive nature in their assessed work, whatever the format.
Confidentiality issues will vary from subject to subject and you are encouraged to seek advice from your
course team if you are unclear about requirements in your context. For further information and guidance,
please see the University website: https://www.bucks.ac.uk/academic-confidentiality

 

How your work will be assessed
Your work will be assessed against the assessment criteria which have been provided at the end of this
brief.
These criteria have been designed specifically for this assignment and are intended to measure the extent
to which you have demonstrated your achievement of its associated learning outcomes (see above). They
have been aligned with the institutional grade descriptor appropriate for your level.
The assessment criteria provide a basis for fair and consistent marking and indicate what is expected of
you in this assignment. It is strongly recommended that you engage with them while you are working on
the assignment and use them in combination with any feedback you receive once your work has been
marked to help you plan for future learning and development.

Assessment Criteria Academic Year 2022-23
6

REPORT 0-34 (F) –
Fail
Not successful		 35-39 E –
Marginal fail
Below required
standard		 40-49 (D)
Pass
Satisfactory		 50-59 (C)
Pass
Good		 60-69 (B)
Pass
Very Good		 70-79 (A)
Pass
Excellent		 80-100 (A+)
Pass
Outstanding
Knowledge and
understanding
40%
This should
include evidence
of:
Depth of
knowledge and
understanding of
the role of
management
accounting
techniques in
planning, control
and decision
making process
Background
investigation,
analysis,
research,
enquiry and/or
study		 No
understanding of
the role of
management
accounting
techniques in an
organization or
its role in
planning, control
and decision
making		 Little or no
understanding of
the role of
management
accounting
techniques in an
organization or
its role in
planning, control
and decision
making		 Limited analysis
of the role of
management
accounting
techniques in an
organization and
its uses in
planning, control
and decision
making		 Some research
into the role of
management
accounting
techniques is
demonstrated
together with
some
understanding of
its practical uses
in planning,
control and
decision making		 The role of
management
accounting
techniques has
been well
researched
demonstrating a
good
understanding of
its uses in
planning, control
and decision
making		 Demonstrates
excellent
research and
understanding of
the role of
management
accounting
techniques and
of its uses in
planning, control
and decision
making		 Demonstrates
excellent
research and
understanding of
the role of
management
accounting
techniques and
of its uses in
planning, control
and decision
making

Assessment Criteria Academic Year 2022-23
7

REPORT 0-34 (F) –
Fail
Not successful		 35-39 E –
Marginal fail
Below required
standard		 40-49 (D)
Pass
Satisfactory		 50-59 (C)
Pass
Good		 60-69 (B)
Pass
Very Good		 70-79 (A)
Pass
Excellent		 80-100 (A+)
Pass
Outstanding
Analysis and
criticality 30%
This should
include evidence
of:
Correct
Interpretation
and analysis of
financial ratios
Logic and
argument
Use and range
of independently
selected sources
(Mintel/Passport)
Analysis and
synthesis
Analytical
reflection		 No interpretation
and analysis of
the performance
are provided to
demonstrate the
financial situation
and possible
causes for the
change from an
investor’s
perspective.		 Poor
interpretation
and analysis of
the performance
are provided to
demonstrate the
financial situation
and possible
causes for the
change from an
investor’s
perspective.		 Weak
interpretation
and analysis of
the performance
are provided to
demonstrate the
financial situation
and possible
causes for the
change from an
investor’s
perspective.		 Fair
interpretation
and analysis of
the performance
are provided to
demonstrate the
financial situation
and possible
causes for the
change from an
investor’s
perspective.		 Good
interpretation
and analysis of
the performance
are provided to
demonstrate the
financial situation
and possible
causes for the
change from an
investor’s
perspective		 Excellent
interpretation
and analysis of
the performance
are provided to
demonstrate the
financial situation
and possible
causes for the
change from an
investor’s
perspective.		 Excellent
interpretation
and analysis of
the performance
are provided to
demonstrate the
financial situation
and possible
causes for the
change from an
investor’s
perspective.

Assessment Criteria Academic Year 2022-23
8

REPORT 0-34 (F) –
Fail
Not successful		 35-39 E –
Marginal fail
Below required
standard		 40-49 (D)
Pass
Satisfactory		 50-59 (C)
Pass
Good		 60-69 (B)
Pass
Very Good		 70-79 (A)
Pass
Excellent		 80-100 (A+)
Pass
Outstanding
Organisation
and
communication
of ideas and
evidence
Application and
Practice 25%
This should
include evidence
of:
Good
Numeracy &
Quantitative
Skills
Correct use of
formula(s) and
correct ratio
calculations		 Poor ratio
calculations with
no correct units
of
measurements		 Poor ratio
calculations with
the correct units
of
measurements
for at least 1 of
the ratios
required over the
two-year period		 Weak ratio
calculations with
the correct units
of
measurements
for at least 2 of
the ratios
required over the
two-year period		 Fair ratio
calculations with
the correct units
of
measurements
for at least 3 of
the ratios
required over the
two-year period		 Good ratio
calculations with
the correct units
of
measurements
for at least 4 of
the ratios
required over the
two-year period		 Excellent ratio
calculations with
the correct units
of
measurements
for all the ratios
required over the
two-year period		 Excellent ratio
calculations with
the correct units
of
measurements
for all the ratios
required over the
two-year period.

Assessment Criteria Academic Year 2022-23
9

REPORT 0-34 (F) –
Fail
Not successful		 35-39 E –
Marginal fail
Below required
standard		 40-49 (D)
Pass
Satisfactory		 50-59 (C)
Pass
Good		 60-69 (B)
Pass
Very Good		 70-79 (A)
Pass
Excellent		 80-100 (A+)
Pass
Outstanding
Transferable
skills
(5%) –
This should
include evidence
of:
good report
format
clarity of
expression
referencing
word count is
observed
+/- 10%		 Brief not met.
Far too long or
too short. Not in
a Report format.
Unclear structure
and poor
presentation. No
references or
conclusion given.
Work
demonstrates
limited or no
ability to:
-communicate
information,
ideas,
problems and
solutions
accurately
and reliably
utilising
relevant
communication
skills (level of		 Brief not fully
met. Far too long
or too short. Not
in a Report
format. Unclear
structure and
poor
presentation. No
references or
conclusion given.
Work
demonstrates
insufficient ability
to:
-communicate
information,
ideas,
problems and
solutions
accurately
and reliably
utilising
relevant
communication		 Brief partially
met and an
attempt made at
a Report format.
Too long or too
short. Poor
presentation.
Problems with
writing style. Few
references and
little conclusion
given.
Work
demonstrates a
sufficient ability
to:
-communicate
information,
ideas,
problems and
solutions
accurately
and reliably
utilising		 Structured well in
a Report format.
Writing style is
sometimes
unclear.
Adequate
references
however only
partial use of
Harvard
referencing.
A reasonable
attempt at a
conclusion
made.
Work
demonstrates a
consistent and
confident ability
to:
-communicate
information,
ideas,
problems and		 Written in a
Report format
within word
count. Meets
brief fully. Clearly
written and
presented. Good
referencing used
from a range of
sources with
sensible and
detailed
conclusions
Work
demonstrates a
highly proficient
ability to:
-communicate
information,
ideas,
problems and
solutions
accurately		 Brief fully met,
within word
count.
Professional
presentation and
language used in
a report format.
Excellent range
and source of
referencing.
Harvard
referencing
used. Excellent
conclusions
Work
demonstrates a
highly
accomplished
ability to:
-communicate
information,
ideas,
problems and		 Brief fully met,
within word
count.
Professional
presentation and
language used in
a report format.
Excellent range
and source of
referencing.
Harvard
referencing
used. Excellent
conclusions.
Work
demonstrates a
exceptional
ability to:
-communicate
information,
ideas,
problems and
solutions
accurately

Assessment Criteria Academic Year 2022-23
10

REPORT 0-34 (F) –
Fail
Not successful		 35-39 E –
Marginal fail
Below required
standard		 40-49 (D)
Pass
Satisfactory		 50-59 (C)
Pass
Good		 60-69 (B)
Pass
Very Good		 70-79 (A)
Pass
Excellent		 80-100 (A+)
Pass
Outstanding
written
communication)
-Present report
to a
professional
standard
The Harvard
Referencing
system not
followed.		 skills (level of
written
communication)
-Present report
to a
professional
standard
The Harvard
Referencing
system not
followed.		 relevant
communication
skills (level of
written
communication)
– Present report to
a professional
standard
The Harvard
Referencing
system
sometimes
followed.		 solutions
accurately
and reliably
utilising
relevant
communication
skills (level of
written
communication)
– Present report
to a
professional
standard
The Harvard
Referencing
system
sometimes
followed.		 and reliably
utilising
relevant
communication
skills (level of
written
communication)
– Present report
to a professional
standard
The Harvard
Referencing
system often
followed		 solutions
accurately
and reliably
utilising
relevant
communication
skills
-Present report to
a professional
standard
The Harvard
Referencing
system always
followed
.		 and reliably
utilising
relevant
communication
skills (level of
written
communication)
– Present report
to a professional
standard
The Harvard
Referencing
system always
followed.