constriction finance

(a) During a certain accounting year Company A records the following transactions: (all values
are in £000; other data is given as percentages).

1) Turnover: total work carried out is £1000 of which 15% is work in progress, the rest is certified. Some 80% of the certified work has been paid for at the end of year.

2) Materials: the opening stock at the beginning of the year is £50 and the closing stock is £80. Material deliveries during the year amount to £500 and payments have been made in respect of some 70% of this amount by end of year.

3) The wages and salaries cost incurred is £300 and by the year end £100 of this bill remains owing. Plant hire expenses incurred are £60.

4) The company has some £200 of fixed plant and by year end 95% of this plant has been fully paid for; the balance remains as a liability. This plant is assumed to depreciate in value by 20% over the year.

5) Tax is payable on net profits (after allowing for expenses and depreciation) at a basic rate of 30%. The after-tax profit is divided 40% to dividends, the rest to be retained as part of capital employed. These payments for Company A accrue as a liability yet to be paid.

6) The company has fixed land and building assets of £100. Assume no change in the value of these assets during the year.

7) The company has issued share capital of £250 and general reserves of £80. These do not change during the year.

Use a spreadsheet to prepare both a profit and loss account and a balance sheet for the company.
In order to balance the balance sheet you will need to include a cash at bank item in
the current assets. This is a residual item. Present the accounts correct to the nearest whole number.
(25 marks)

(b) During a certain accounting year, a second rival firm, Company B records its transactions as
follows: (all values are in £000; other data is given as percentages).

1) Turnover: total work carried out is £1400 of which 30% is work in progress, the rest is certified. Some 80% of the certified work has been paid for at the end of year.

2) Materials: the opening stock at the beginning of the year is £100 and the closing stock is £120. Material deliveries during the year amount to £700 and payments have been made in respect of some 50% of this amount by end of year.

3) The wages and salaries cost incurred is £400 and by the year end £150 of this bill remains owing. Administration expenses are £100 (this includes any plant hire).

4) This company has some £400 of fixed plant and by year end 95% of this plant has been fully paid for; the balance remains as a liability. This plant is assumed to depreciate in value by 20% over the year.

5) Tax is payable on net profits (after allowing for expenses and depreciation) at a basic rate of 30%. The after-tax profit is divided 40% to dividends, the rest to be retained as part of capital employed. These payments for Company B are fully paid for during the year.

6) This company also has fixed land and building assets of £100. Assume no change in the value of these assets during the year.

The company has issued share capital of £300 and general reserves of £80. These do not change during the year.

Company B also has a long-term loan of £100 and an overdraft outstanding of £200. The
interest payable on these loans is £50.

Again use a spreadsheet to prepare both a profit and loss account and a balance sheet for
Company B. [Copy format used in part (a) and adjust values for part (b)]
In order to balance the balance sheet you will again need to include a cash at bank item.

When you have derived accounts for both parts, discuss the main differences between
Company A and Company B. Do not calculate any ratios for this part.
(25 marks)

(c) For both the sets of accounts, Company A and B, compute, using the spreadsheet, the current ratio, the quick ratio (acid test), the asset turnover ratio, the gross and operating profit margin ratios, and the return on capital employed ratio. Calculate the ratios correct to one decimal place. Present the results as a chart using the spreadsheet. Discuss the significance of the differences in the respective ratios.
(20 marks)

Write an essay, of about 1,000 words, on the value of accounting ratios for analysing
financial information, including both the advantages and disadvantages of ratio analysis.
(30 marks)

You should submit the disk at the same time as the written text. Marks will be awarded for both the efficiency and overall appearance of the spreadsheet, as well as the hard copy report. Higher marks will be given for well presented tables and charts, incorporating clear contents listings.

You must do your own work. Where evidence of collusion is revealed no marks will be awarded and the offending authors will be reported for plagiarism in accordance with Faculty guidelines, regardless of who did the copying. Plagiarism is taken very seriously and has severe consequences and you should familiarise yourself with these.

Note: – You are advised to keep a copy of all coursework submitted.

Essays must contain citations in the text and fully referenced material in accordance with the Harvard system of referencing.

Spreadsheets MUST be submitted on a CD and must be clearly marked with your NAME, Student id; module number and date.

Memory sticks will NOT be accepted or marked. Work submitted in folders will NOT be marked.

Note: – You are advised to keep a copy of all coursework submitted.

Coventry University Version 3.1 Faculty of Engineering and Computing

PAGE

PAGE 2

Coursework cover sheet – be sure to keep a copy of all work submitted

Submit via the coursework post box in the
Section A – To be completed by the student – PLEASE PRINT CLEARLY
Family Name(s) ModuleNo.

353BE

Forename(s)
ID Number(s) (from your student card)
Time taken (hrs) (per student for group coursework) Faculty Date Stamp

(or signature and date)

Lecturer

P Yates

Lab group / Tutorial group / Tutor (if applicable)

 

Module Code and Title

353BE  Construction Finance

Due date:

27 January 2012

Assignment No. / Title

Accounting & ratios

Extensions & late submissions allowed:

 

Estimated Time (hrs)

25

Assignment type:

 

% of Module Mark

25

Hand out date:

2 December 2011

Declaration: I/we the undersigned confirm that I/we have read and agree to abide by the University regulations on plagiarism and cheating and Faculty coursework policies and procedures. I/we confirm that this piece of work is my/our own.  I/we consent to appropriate storage of our work for checking to ensure that there is no plagiarism/ academic cheating.

 

 

Signature(s): ————————————–   ————————————–   ————————————–   ————————————–


Section B – To be completed by the assessor
 

Intended Learning Outcomes assessed by this work.

 

This coursework relates to the following module learning outcomes outlined in the Module Information Directory

 

  1. Appraise the role finance and accounting plays in providing key management information to construction companies and design consultancies.
  2. Distinguish key financial concepts as used in company reports and understand the linkages between the different types of financial report.

 

 

 

Marks breakdown

 

Max

Awarded

 

 

  • Spreadsheets for Company A and Company B     (50%)
  • Ratio analysis and discussion       (20%)
  • Essay on ratio analysis           (30%)

 

 

50

20

30

 

 

 

Assessor’s signature / initials:

 

 

Date:

 

Total

100

Total

Signed internal moderator:

 

This work may have been moderated. You may find additional comments in the work.
The scheduled return date is 17 February, 2012.  Feedback will be provided individually in written form on coursework cover sheets and annotation on the reports, and generally in class and on CU-Online.  Feedback:-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Coursework Task Sheet

Module Title

Construction Finance

Module Code

353BE

Assignment No. / Title

Accounting & Ratios

Hand out date:

02 December 2011

Lecturer

P Yates

Due date:

27 January 2012

Estimated Time (hrs)

25

Assignment type:

Individual

Extensions & late submissions allowed:No % of Module Mark

25

Submission arrangements

Sir John Laing reception by 4pm on the due date

Assessment Criteria

Marks will be awarded for:

  • Spreadsheets for Company A and Company B     (50%)
  • Ratio analysis and discussion       (20%)
  • Essay on ratio analysis           (30%)

 

 

COURSEWORK ONE

 

(a) During a certain accounting year Company A records the following transactions: (all values

are in £000; other data is given as percentages).

 

1)       Turnover: total work carried out is £1000 of which 15% is work in progress, the rest is certified.  Some 80% of the certified work has been paid for at the end of year.

 

2)       Materials: the opening stock at the beginning of the year is £50 and the closing stock is £80.  Material deliveries during the year amount to £500 and payments have been made in respect of some 70% of this amount by end of year.

 

3)       The wages and salaries cost incurred is £300 and by the year end £100 of this bill remains owing. Plant hire expenses incurred are £60.

 

4)       The company has some £200 of fixed plant and by year end 95% of this plant has been fully paid for; the balance remains as a liability.  This plant is assumed to depreciate in value by 20% over the year.

 

5)       Tax is payable on net profits (after allowing for expenses and depreciation) at a basic rate of 30%.  The after-tax profit is divided 40% to dividends, the rest to be retained as part of capital employed. These payments for Company A accrue as a liability yet to be paid.

 

6)       The company has fixed land and building assets of £100.  Assume no change in the value of these assets during the year.

 

7)       The company has issued share capital of £250 and general reserves of £80.  These do not change during the year.                                                     

 

Use a spreadsheet to prepare both a profit and loss account and a balance sheet for the company.

In order to balance the balance sheet you will need to include a cash at bank item in

the current assets. This is a residual item. Present the accounts correct to the nearest whole number.

(25 marks)

 

 

(b) During a certain accounting year, a second rival firm, Company B records its transactions as

follows: (all values are in £000; other data is given as percentages).

 

1)       Turnover: total work carried out is £1400 of which 30% is work in progress, the rest is certified.  Some 80% of the certified work has been paid for at the end of year.

 

2)       Materials: the opening stock at the beginning of the year is £100 and the closing stock is £120.  Material deliveries during the year amount to £700 and payments have been made in respect of some 50% of this amount by end of year.

 

3)       The wages and salaries cost incurred is £400 and by the year end £150 of this bill remains owing. Administration expenses are £100 (this includes any plant hire).

 

4)       This company has some £400 of fixed plant and by year end 95% of this plant has been fully paid for; the balance remains as a liability.  This plant is assumed to depreciate in value by 20% over the year.

 

5)       Tax is payable on net profits (after allowing for expenses and depreciation) at a basic rate of 30%.  The after-tax profit is divided 40% to dividends, the rest to be retained as part of capital employed. These payments for Company B are fully paid for during the year.

 

6)       This company also has fixed land and building assets of £100.  Assume no change in the value of these assets during the year.

 

7)              The company has issued share capital of £300 and general reserves of £80.  These do not change during the year.

 

8)              Company B also has a long-term loan of £100 and an overdraft outstanding of £200. The

interest payable on these loans is £50.

 

Again use a spreadsheet to prepare both a profit and loss account and a balance sheet for

Company B. [Copy format used in part (a) and adjust values for part (b)]

In order to balance the balance sheet you will again need to include a cash at bank item.

 

When you have derived accounts for both parts, discuss the main differences between

Company A and Company B.  Do not calculate any ratios for this part.

                        (25 marks)


 

 

(c)     For both the sets of accounts, Company A and B, compute, using the spreadsheet, the current ratio, the quick ratio (acid test), the asset turnover ratio, the gross and operating profit margin ratios, and the return on capital employed ratio.  Calculate the ratios correct to one decimal place.  Present the results as a chart using the spreadsheet.  Discuss the significance of the differences in the respective ratios.

(20 marks)

 

(d)           Write an essay, of about 1,000 words, on the value of accounting ratios for analysing

financial information, including both the advantages and disadvantages of ratio analysis.

                                                                                                                        (30 marks)                                               

 

You should submit the disk at the same time as the written text.  Marks will be awarded for both the efficiency and overall appearance of the spreadsheet, as well as the hard copy report. Higher marks will be given for well presented tables and charts, incorporating clear contents listings.

 

You must do your own work.  Where evidence of collusion is revealed no marks will be awarded and the offending authors will be reported for plagiarism in accordance with Faculty guidelines, regardless of who did the copying.  Plagiarism is taken very seriously and has severe consequences and you should familiarise yourself with these.

 

Note: – You are advised to keep a copy of all coursework submitted.

 

Essays must contain citations in the text and fully referenced material in accordance with the Harvard system of referencing.

 

Spreadsheets MUST be submitted on a CD and must be clearly marked with your NAME, Student id; module number and date.

 

Memory sticks will NOT be accepted or marked.  Work submitted in folders will NOT be marked.

 

 

 

 

Note: – You are advised to keep a copy of all coursework submitted.

 

Still stressed from student homework?
Get quality assistance from academic writers!

WELCOME TO OUR NEW SITE. We Have Redesigned Our Website With You In Mind. Enjoy The New Experience With 15% OFF