Student Name Student Number
Unit Code/s & Name/s FNSACC511 Provide financial and business performance information
Assessment Name Assessment 2 Assessment Task No. 2 of 2
Assessment Due Date Date submitted
Student Declaration: I declare that this assessment is my own work. Any ideas and comments made by other people have been acknowledged as references. I understand that if this statement is found to be false, it will be regarded as misconduct and will be subject to disciplinary action as outlined in the TAFE Queensland Student Rules. I understand that by emailing or submitting this assessment electronically, I agree to this Declaration in lieu of a written signature.
Student Signature Date
Instructions to Student General Instructions:
This is an open book assessment and all resources may be used including the prescribed textbook and appropriate internet sites.
There are five (5) questions in this assessment.
You are required to:
1. Complete and submit all assessment tasks by the due date.
2. Answer all questions in this booklet.
3. Write your responses in the blank pages which follow each question.
4. Write your name and student number in the space provided on this page.
5. Please ensure you reference all external sources of information, following APA or Harvard referencing systems, guidance available through the TAFE Queensland Library Services https://library.tafeqld.edu.au/friendly.php?s=referencing.
6. Present all responses in a professional manner as this assignment presumes that you are working in a financial consulting firm.
7. Read and analyse each question to formulate an informed response.
8. Respond to each question using appropriate detail, working and calculations as though you are providing information to a client who does not have a thorough knowledge of business finance. One or two sentence answers will not be accepted
9. Do additional research for answering the theory question. Please refer to the Supplementary Resources first, and if not enough , you can check the internet on appropriate educational sites
10. Save your document regularly to a USB or your computer as you work through this booklet.
11. Save this document to your computer or USB once all questions are answered and then upload the document at the Assessment Centre.
12. At Diploma level you are required to supply comprehensive answers to theory questions. One to two sentences is not sufficient. Ensure all aspects of the question are addressed and correct numbering is maintained.
Information / Materials provided:
Assessment booklet with questions 1-6
Templates Jolfa Ltd financial statements and ratio template
To achieve a satisfactory result, your assessor will be looking for your ability to demonstrate the following key skills/tasks/knowledge to an acceptable industry standard:
• Knowledge of the key requirements of relevant corporations and consumer legislation?
• Explain what a business plan is?
• What the characteristics of a business plan are?
• Provide at least five reasons for writing a business plan?
• Explain budgetary controls and the effects of different financing options on cash budgeting and risk
• Design and present a client comparison financial performance report using Excel( attaching the excel File)
Number of Attempts:
• You will receive up to two (2) attempts at this assessment task. Should your 1st attempt be unsatisfactory (U), your teacher will provide feedback and discuss the relevant sections / questions with you and will arrange a due date for the submission of your 2nd attempt. If your 2nd submission is unsatisfactory (U), or you fail to submit a 2nd attempt, you will receive an overall unsatisfactory result for this assessment task. Only one re-assessment attempt may be granted for each assessment task. For more information, refer to the Student Rules.
(if relevant) Insert your details on page 1 and sign the Student Declaration. Include this form with your submission.
Due Date: Refer to Unit Study Guide and/or Learning Management System
Assessment to be submitted via
• TAFE Queensland Learning Management System: Connect url: https://connect.tafeqld.edu.au/d2l/login
• Username; 9 digit student number
• For Password: Reset password go to https://passwordreset.tafeqld.edu.au/default.aspx
Instructions to Assessor • This is an unsupervised written assessment.
• Students are required to complete all tasks.
• No time restrictions apply
• Students must complete their assessments as individuals
• Usual office WHS requirements should be met by students
• Physical conditions are at the students discretion
• Interactions with team members or supervisors should be limited to general instructions and clarification or explanation of the assessment requirements.
• Contingencies if conditions cannot be met are at the discretion of the Assessor.
Note to Student An overview of all Assessment Tasks relevant to this unit is located in the Unit Study Guide.
Read the scenario and tasks and record your response in the blank page which follows.
Attached are financial statements for Jolfa Ltd, an Australian retailing company. You have been recently employed in this business and Peter the Senior Partner has asked you to prepare a performance report analysing the results, drawing conclusions and making recommendations for future improvements.
a) Complete the attached spreadsheet of the ratios achieved by the company for 2018 and 2019 and comparison of these to the industry averages (For presentation purposes please copy the Template provided into Excel).
Note: The Excel file is to be submitted separately.
Your report should include the following:
b) An introduction
c) Analysis of the results based on the ratios calculated (use appropriate headings).
This should consist of two or three sentences about each ratio commenting on
- what the results indicate about the performance of the business and
- identifying any existing and potential problem areas.
d) Make suggestions about how to improve problem areas.
e) Outline the importance of cash flow budgeting and explain the principles of budgetary control and how this relates to business performance results. Specifically refer to at least 2 of your recommendations (above) and explain the effect they would have on cash budgets.
7500 0.2 15
400 0.01 0.8
9750 0.3 19.5
18000 0.4 36
4545 0.09 9.09
This page has been left blank for you to write your response to Question 5 (b) (c) and (d)
Note: 5 (a) should be presented in Excel and submitted separately.
Question 2 - Part A
Referring to the attached financial statements for Jolfa Ltd, calculate the WACC. Assume a company tax rate of 30%.
1. Explain why financial managers of Jolfa should be aware of the WACC and how this information can be used to analyse and improve business performance and manage risk.
Note: All calculations should be made to at least three decimal places in parts a) and e) above.
• Industry standards/benchmarks
o Current Ratio 1.45:1
o Liquid Ratio 1.06:1
o Debt to Equity ratio 160%
o Earnings per Share $0.45 per share
o Return on Equity 10.5%
o Net Profit Ratio 22%
o Times Interest Covered 4 times
o Dividend Payout ratio 20%
o Accounts Receivable Collection Period 45 days
o Inventory Turnover 8 times
• Current share price is $1.55
• Most recent dividend was $0.05 per share. Dividends are expected to grow by 7% per year.
• 550 Debentures were issued with a face value of $1,000 trading at par value of 8.5%. The Market Price of the Debentures is $950. The time to maturity is 3 years.
• The mortgage loan is currently at a variable rate of 8.9%.
This page has been left blank for you to write your response to Question 2 – Part A
A1 WACC Calculation
Ordinary equity Shareholder funds % Market
Funding Source Market value Proportion Cost WACC
Task B1Jolfa Ltd is also considering the following investment project:
Capital outlay $200,000
Net Profit p.a. (includes depreciation of $40000) $ 90,000
Depreciation p.a. $ 40,000
Economic life: 5 years
Salvage value: Zero
Tax rate payable (assume paid in year of income): 30%
Required rate of return: (WACC + 3% Risk factor, rounded to nearest round number)
Calculate the following:
a) The Net Profit after Tax for each year.
b) The Annual Cash Flow for each year.
c) Accounting Rate of Return (using total investment).
d) Payback Period.
e) Net Present Value.
f) Internal Rate Of Return
Select the answer that would correctly complete the following sentence.
Evaluating projects on an Independent Basis (rather than Mutually Exclusive) and using NPV evaluation method means you would:
a) Choose the individual project with the highest NPV (Net Present Value).
b) Choose the individual project with the highest ARR.
c) Choose all projects with a positive NPV.
d) Choose all projects with an ARR greater than the W.A.C.C.
e) None of the above
This page has been left blank for you to write your response to Question 2 - Part B