NZDB6213 Planning and Managing Business Finances
  • Question / Requirement

Final Assessment

Paper Title: Planning and Managing Business Finances

Paper Code: NZDB6213

Title: Financial Management Plan

Individual Assignment

100 marks – 60%

Due date: 29/8/2019 at 23.59pm

General Instructions to Students:

• If you have any inquiries or do not understand the requirements of the assessment, please check with your lecturer.

• If an extension to the due date is required you must request this from the lecturer BEFORE the due date NOT on the due date. A medical certificate or other evidence is required to support an extension. If a student is away sick on due date then you must submit a medical certificate with the assignment on return. NOTE: The medical certificate must state the day of the assessment’s due date. Special extension can be considered in discussion with the lecturer.

• You are required to submit an electronic copy of the assessment to Canvas – a link will be available on Canvas.

• Late submissions will be penalised 10% per day excluding weekends.

• Assignment File Saving: It is critical that you save a copy of all work on your assignment. Students MUST save a copy of their assignment as they work on it. A copy should be saved in a minimum of 2 locations, e.g. your memory stick and a copy on your folder at ICL and at home. This means at any time if you lose one copy you always have a backup copy which is up to date. Note: If students lose the assignment or any part of it before it is completed, submitted and handed in on due date (both electronic copy and hard copy) they will get zero mark. No excuses will be accepted – even if it was deleted by mistake or lost.

• Follow below naming convention for the assignment document:

[Student First & Last Name] _ [course code] _ [AsgNo].docx

(e.g., Wallayaporn Techakriengkrai_NZDB5201_Asg2.docx

• Originality: Information in each section needs to be original information. If students have copied sections from sources (even if it is referenced correctly) and it is not in their own words, marks will be deducted. Students are required to put all information sourced from any source into their own words or paraphrase it. Acceptable Turnitin similarity (Plagiarism) is below 25%.

• Referencing: It is expected that any research used is referenced properly using the APA referencing standard.

• Research: The student is required to use academic books, journals, and selected company’s websites to support the points in this open book assignment.

• All answers must be in your own words, i.e. please do not use too many quotes, but describe/ analyse/ comment in your own words.

• Your analysis, discussion and recommendations must be embedded in theory learnt in class.

• Your plan should be word processed in black and white, with the main text in 12 point Times New Roman, left aligned, with 6 point paragraph spacing, 1.5 line spacing on A4 size paper, portrait format (left margin minimum 3cm, right margin minimum 2cm).


Final Assessment – Financial Management Plan

Instructions for students

1. Preparation of financial management plan (LO1, LO2 & LO3)

For this assessment, you are required to produce a Financial Management Plan for a business entity (Public listed company) that will be approved by your lecturer.

In the plan, you must:

• Demonstrate knowledge and skills to analyse and apply financial information to make informed decisions and forecasts to improve the business entity’s performance. (Learning Outcome 1)

• Engage stakeholders for effective use of financial information to make investment decisions and forecasts. (Learning Outcome 2)

• Analyse and manage the impact of the business environment on financial decisions of a business entity. (Learning Outcome 3)

The plan you prepare must fulfil all the criteria laid out in Table 1. Tick each checkbox in the table to ensure all criteria are covered. Identify each piece of information using the code provided in the first column of the table.

You have to use the company’s annual report, website, media articles, text books and academic articles to prepare your financial management plan for the selected company. You can contact the company if you need further information which is not provided in their annual report or websites. Any copies of data provided by the business entity for the purpose of calculations must also be correctly coded and attached to your plan.

2. Role Play (LO2) – Group (3 members)

Assume you are hired by the company to prepare a financial management plan. In your role play, you have to assume that a discussion is arranged with one internal and one main stakeholder to analyse the financial information and recommend suggestions to achieve the future financial goals of the company. Further, the stakeholders discuss the opportunities of future investment decisions and the sales forecast to meet at least two stakeholders’ requirements. The detail of the role play is given on page no 11.

Code Criteria (student to tick all that apply) Marks

A • The name and business of the organisation for which the financial management plan has been prepared is clearly identified and provide a brief background for your selected company and industry (LO1a)

Word limit 100 +/- 10% 2 marks

(1 mark for business background and 1 mark for industry background)

B • The stakeholders, principals and agents in the business are clearly identified. (LO1a)

• Explain each stakeholder’s interest in the business.

• Explain the principal and agent relationship based on the agency theory

Word limit 100 +/- 10% 6 marks

(2 marks for identify 2 relevant stakeholders and explain their interests and 4 marks for principal and agents of the business entity and explaining their agency relationship)

C • Capital budgeting / project feasibility is assessed using: (LO1a)

• NPV method

• IRR method

• You have to prepare a proforma income statement by using assumptions to calculate the annual operating net cashflow for three years to calculate the NPV and IRR.

• Recommendations are correctly provided based on the calculations.

• Financial information received from the business for this purpose is attached and correctly coded or clearly stated.

• Calculations are clearly shown (LO1a).

Word limit 100 +/- 100 6 marks

(3 marks for NPV;

1 mark for IRR;

2 marks for recommendations;

(financial information attached and coded)

D • Select two of the following KPIs and calculate the ratio that is given in Appendix 1: (LO1a)

• Liquidity and long-term solvency

• Profitability

• Efficiency of operations (LO1a)

• The above analysis is to be based on the financial data for the last three years. The table given in Appendix I is correctly filled out. Use the 4th financial year to calculate the averages.

• Select 5 ratios for each area. You can select from the ratios given in the appendix or you can choose relevant ratio if you select a business entity that provides services.

• Workings and calculations of ratios are clearly presented.

• Information for the analysis is culled from at least two of the following financial statements: (select at least two)

• Income statement

• Balance sheet

• Statement of changes in equity

• Cash flow statement. (LO1a)

• Financial information received from the business for this purpose is attached and correctly coded or clearly stated.

• Provide a detailed interpretation of financial analysis including trend analysis, identify the issues and provide suggestions to make future decisions to improve the business entity’s performance. (LO1b)

• Word limit 300 +/-10% 26 marks

(5 marks each for analysis of the two areas of KPIs;

2 marks for workings and final units correctly coded = 12 marks;

4 marks for understanding of financial statements and attached and coded)

10 marks for the trend analysis, issues and suggestions provided to improve the return of the business and mitigate the future risks.

E • Financial risk is analysed using two of the following methods: (select any two) (LO1b)

• Expected return

• Standard deviation

• Coefficient of variation

• Financial information received from the business for this purpose is attached and correctly coded or clearly stated. (Hint: use close historical share prices for a year for your selected company and competitor company in the same industry).

• Calculations are clearly shown. (50 words +/- 10%) 4 marks

(4 marks for calculations and compare the level of risk)

F • The impact of working in a global context on global capital budgeting, valuation, financial decision making and forecasting is analysed and explained.

Analysis takes into consideration at least one of the following factors: (LO3b)

• Divisional differences

• Currency

• Taxation

• Country risks

• Adaptable incentive systems

• Words limit +/- 200 words 7 marks

Assessor’s judgement is called for.

G • Write a report clearly describing how the company engaged with the stakeholders to achieve financial goals of a business entity.

Stakeholders must include at least one internal and one main stakeholder.

Internal stakeholders may include: (select at least one)

• Managers

• Employees

• Management board/governors

Main stakeholders may include: (select at least one)

• Owners/shareholders

• Lenders/financiers

• Suppliers

• Clients

Other stakeholders may include (select if applicable):

• Government agencies

• People

• Communities (LO2a)

• Information is researched, evaluated and communicated to stakeholders regarding financial analysis, investment decision or financial decision to meet the financial goals of the entity. (LO2b)

• Documents that show evidence of stakeholder engagement are attached and correctly coded. (LO2a)

Documents may include copies of emails, letters, memos, minutes of meetings, and other relevant documents.

• Word limit 400 +/- including evidence documents 18 marks


8 marks for internal and 8 for external stakeholders

= 16 marks;

2 marks for copies of evidence of stakeholder engagement)

H • Analyse and manage the compliance with internal and external requirements of the business entity during the financial decision making and forecasting process.

This may include but is not limited to identification, management and monitoring of compliance requirements.

• Evidence of managing at least one compliance requirement for internal and external is provided.

Evidence may be in the form of legislations, corporate governance meetings, internal financial policy and other relevant documents. (LO3a)

• Word limit 250 +/- 10% including evidence documents. 8 marks

(4 marks for compliance with internal requirement + 4 marks for external

= 8 marks;

Provide copies of evidence of managing compliance requirement)

I • I. Applying business knowledge to analyse and apply financial information. Business knowledge may include knowledge of principles and practices for: (select any 4). This part has to be answered based on the KPIs and financial analysis that you have described in part D.

• Operations;

• Accounting;

• Sales and marketing;

• Human resources;

• Risk management. (LO1c)

Please provide details.

For example, the student was able to ask the correct type of questions to elicit information pertaining to sales and marketing in order to elicit sales forecasts. The student also demonstrated knowledge of risk management by identifying potential risks and providing options to mitigate them. The student also identified that the budgets allocated to HR was insufficient given the fact that the business was planning to expand.

(Word limit 125 +/- 10%)

4 marks

(1 mark for each area)

J • . Research and analyse how the business entity has used the professional, ethical, and socially and culturally appropriate behaviour is modelled during the financial decision making. You can choose any two factors to analyse the behaviour related to the business entity. For this you have to refer the annual reports of the selected company, newspaper articles, company websites, legislations to support your answer. (LO1e)

• Word limit 125 +/- 10%

Socially appropriate: the student tried to make the financial plan sustainable and environment friendly by suggesting that the business invest in a project that supported these initiatives.

Culturally appropriate: the student can use the Treaty of Waitangi principles and how it is applied to make the financial planning and decision making or how Maori culture of New Zealand offers valuable insight for financial decision making. 4 marks

(2 marks for each area)

• The assessor’s judgement is called for to determine the validity and quality of the analyses, and marks to be allocated.


Table for calculation of ratios

Ratio Formulas Year _________ (¼ mark each) Year _________ (¼ mark each) Year _________ (¼ mark each)

• Gross profit margin

• Net profit margin

• Operating profit margin

• Return on (average)equity ratio

• Return on average assets ratio

• Total asset turnover ratio

• Fixed asset turnover ratio

• Inventory (average) turnover ratio

• Trade receivable (average) turnover ratio

• Age of trade receivable ratio

• Age of creditors ratio

• Current ratio

• Quick ratio

• Interest coverage ratio

• Debt Ratio

• Proprietary Ratio

All workings must be clearly shown.

K) Role Play Instructions (LO2a &b)

Engage stakeholders for effective use of financial information to make investment decisions and forecasts.

Due date: Week 14 & 15 (The exact date and time will be informed by your lecturer)

Marks: 15 marks

Duration: 15 minutes and 5 minutes question time – Total 20 minutes

No of members: maximum 3 members

Rationale: The aim of this role play is to engage with internal and external stakeholders for analysis and effective use of financial information to achieve the financial goals of selected business entity.

Instructions: Each group is assigned a similar business entity (Public listed Company). Members in each group are asked to research and investigate the financial analysis, investment decisions and financial forecast based on the given financial statements, accounting notes and other related materials. The information that you collect are to be communicated to your stakeholders and their thoughts and suggestions to meet the financial goals of the business entity are to be discussed. One-member to act as an internal stakeholder, second member to act as an external stakeholder and third member to act as a financial expert who prepares this financial plan. Your discussion should consider the stakeholder’s perspectives. Each group has to submit a one-page summary of your task to your lecturer before commencing your role play. Each member of the group is assessed individually by two tutors and provided with average marks. Please note the role-play will be recorded by one of your classmates that you have arranged before commencing (i.e. videotaped) for post-moderation purposes. You are also required to hand in all presentation visuals (e.g. poster, slideshow, flipchart paper), as well as any props and handouts used in this role play. All the materials and video link uploaded in the given links on the canvas.

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