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ASSESSMENT INSTRUCTIONS
Qualification Code & Name Stream / Specialisation
FNS50215 – Diploma of Accounting
Unit/s of Competency Code Unit/s of Competency Name
FNSACC501 Provide financial and business performance information
Assessment Task Number Assessment Name
Assessment 3 of 3 Assessment 3
Due Date
Week 11
Submission Details (if applicable)
Submit online
Instructions to Students
In this assessment, you will be assessing client needs, analysing data and preparing advice in response to scenarios provided in the questions.
Range and Conditions of Assessment
Access to textbooks, internet and any notes is allowed.
Evidence Required to be Submitted
The completed assessment paper is to be submitted to the teacher as either a Word document or a PDF document.
Marking Criteria to Achieve a Satisfactory Result
For more information, refer to the Marking Criteria.

ASSESSMENT SUMMARY
Student Name Student Number

Qualification Code & Name Stream / Specialisation
FNS50215 – Diploma of Accounting
Unit/s of Competency Code Unit/s of Competency Name
FNSACC501 Provide financial and business performance information
Assessment Task Number Assessment Name
Assessment 3 of 3 Assessment 3
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 me emailing this assessment item, I agree to this Declaration in lieu of a written signature.
Student Signature Date
/ /20
MARKING CRITERIA
Attempt Result Date
1st Attempt 0 Satisfactory
0 Unsatisfactory
/ /20
2nd Attempt 0 Satisfactory
0 Unsatisfactory
/ /20
1st Attempt 2nd Attempt
Did the student satisfactorily: S U S U

1 Part A: Calculate correctly nine financial ratios 0
0
0
0
2 Prepare report to management on ratios with appropriate conclusions/recommendations 0
0
0
0
3 Prepare report to management on risks of expansion overseas 0
0
0
0
4 Calculate WACC 0
0
0
0
5 Part B: Calculate six alternative methods of evaluating projects 0
0
0
0
6 Select correct answer to M/C question on evaluating independent projects 0
0
0
0
Reasonable Adjustment applied to assessment (if ‘yes’ record details)
0 No
0 Yes
Details:
Assessor Name Assessor Signature

Summary of Feedback / Action Plan
Marking criteria and feedback is provided in the online program

ELEMENTS ASSESSED IN THIS ASSESSMENT
Element 1 — Assess client needs
Element 2 — Analyse data
Element 3 — Prepare advice
Instructions
1. Answer all questions in this booklet.
2. Write your responses in the blank pages which follow each question.
3. Write your name and student number in the space provided on this page.
4. Save your document regularly to a USB or your computer as you work through this booklet.
5. Once you have answered all questions save this document to your computer or USB and then upload the document at the Assessment Centre.

The following case study has been prepared to assess your ability to meet specific performance criteria required in the unit FNSACC501 Provide Financial and Business Performance Information.
Specifically this case study will assess skills and outcomes associated with providing financial information.
To indicate that you have achieved the elements of competency listed in this unit you must provide evidence of the ability to:
• access clients’ needs and analyse their financial data
• prepare and document appropriate advice for clients that:
• complies with financial legislation and accounting standards, practices and principles
• assesses taxation, compliance and business viability issues faced by clients
• assesses risk management options and practices.
Students must also demonstrate the following knowledge by providing evidence they can:
• explain the key requirements of taxation legislation relating to deductions, allowances and charges
• list the key areas that can cause significant taxation issues
• compare and contrast forecasting techniques
• identify and explain the key features of government financial policy and secretary’s financial management instructions
• explain the key requirements of relevant corporations and consumer legislation
• describe a range of methods for presenting and formatting financial data
• identify and explain the key principles of cash flow and budgetary control
• identify and categorise sources of information on financial products and markets
• outline a range of risks and contingencies and risk management options relating to financial and business performance
• outline client rights and responsibilities.”
In addition you should be able to demonstrate the foundation skills listed on the following page:
Skill Performance Criteria Description
Reading 1.1, 1.6, 2.2-2.4 Researches and analyses financial information and data from a range of sources to identify key aspects relevant to requirements
Writing 1.1, 1.3, 2.1, 3.1-3.4 Prepares correspondence, plans and reports using logical structure and organisational formats appropriate for the purpose
Uses clear language and concepts appropriate for the audience to convey and clarify explicit information and requirements
Oral Communication 1.1, 1.3, 1.4, 2.1, 3.1-3.4 Participates in verbal exchanges using active listening and questioning techniques to elicit the views and opinions of others and to confirm understandings
Uses appropriate formats, language, tone and pace when providing advice and conveying information to clients
Numeracy 1.1-1.3, 2.1-2.7, 3.1, 3.3, 3.4 Performs mathematical calculations and uses mathematical problem-solving strategies to analyse trends and compare and benchmark financial information
Navigate the world of work 2.1-2.4, 3.1, 3.3 Recognises and follows relevant legislative and regulatory requirements, and explicit and implicit protocols, policies and procedures, and meets expectations of clients and those associated with own role
Interact with others 1.1-1.6, 3.2-3.4 Selects and uses appropriate conventions and protocols when communicating with clients, colleagues and others to seek or provide information
Get the work done 1.6, 1.7, 2.1-2.7, 3.1 Plans, organises and implements tasks according to organisational and legislative requirements, taking responsibility for process, compliance and reporting needs
Makes critical and non-critical decisions in relatively complex situations, taking relevant client and organisational requirements into consideration
Recognises and responds to problems and improvement opportunities by systematically analysing relevant information, generating and evaluating options, and selecting the most appropriate option
Uses digital technologies to access, extract and share relevant information to achieve required outcomes

Part A
1. Read the case study.
2. Record your response to the Assessment task in the blank pages which follow.
Jolfa Ltd. is an Australian retailing company. Currently, Jolfa Ltd. only operates in Australia. The Balance Sheet and Income Statement for Jolfa Ltd. are given below.
Jolfa Ltd. Balance Sheet
as at 30 June, 2015
Current Assets $ '000 $ '000
Cash 50
Accounts Receivable 80
Inventory 120 250
Non-Current Assets
Plant and equipment 950
Land and Building 1100
Goodwill 140 2190
Total Assets 2440

Current Liabilities
Accounts Payable 280
Provn for Long Service Leave 85 365
Non-Current Liabilities
Debentures 550
Mortgage loan 220 770
Total Liabilities 1135
Net Assets $1305

Equity
Share Capital:
1,150,000 ordinary shares issued at $1.00 1150
Retained earnings 155
Total Equity $1305
Additional information
• 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 mortgage loan is currently at a variable rate of 8.9%.
Jolfa Ltd. Income Statement
For the Year Ended 30 June 2015
$ '000 $ '000
Total Sales 2310
Less cost of goods sold
Opening Inventory 220
Purchases 1620
Goods available for sale 1840
Less closing Inventory 120 1720
Gross Profit 590

Less operating expenses
Depreciation 110
Interest 90
Rent 30
Wages 150
Advertising/marketing 20
Other 40
Total Expenses 440

Net Profit before tax 150
Tax 45
Net Profit After Tax 105
Industry standards/benchmarks
Current Ratio 1.45:1
Liquid Ratio 1.06:1
Debt to Equity ratio 160%
Earnings per Share $0.45 per share
P/E ratio 15
Return on Equity 10.5%
Net Profit Ratio 22%
Times Interest Covered 4 times
Dividend Payout ratio 20%
a) From the information provided calculate the:
i. Current Ratio
ii. Liquid Ratio
iii. Debt to Equity ratio
iv. Earnings Per Share
v. P/E ratio
vi. Return on Equity
vii. Net Profit ratio
viii. Times interest covered
ix. Dividend Payout Ratio
b) Prepare a report to the management of Jolfa Inc in which you discuss each of the ratios from above. Compare the ratios to the industry standards given. Provide management with some ideas as to how the company could improve the ratios so that the majority are above the industry standards. How would improving these ratios benefit the company? Keep in mind that your suggestions may improve some ratios and worsen others.
c) Jolfa Ltd. is considering opening a new outlet in China. It has estimated future cash flows and based on these it has decided that the new outlet will be a profitable investment. What are the possible risks that the company might face if it does so?
d) Calculate the WACC of Jolfa Inc using the information above. Assume a company tax rate of 30%
Note: All calculations should be made to at least three decimal places in parts a) and d) above.

Case Study—Part A
a) Ratios

b) Report to Management

c) Report on Possible Risks of New Chinese Operation

d) WACC Calculation

Case Study—Part B
Part B consists of two sections.
In (a) you must calculate six methods to evaluate projects.
In (b) you must select the correct response to one multiple choice question. (Highlight/indicate which option is the correct answer.)
(a) Jolfa Ltd is also considering the following investment project:
Capital outlay $200,000
Net Profit p.a. (before depreciation and tax) $ 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: 12% (WACC + Risk factor)
Assessment Task: Calculate the following:
(i) The Net Profit After Tax for each year.
(ii) The Annual Cash Flow for each year.
(iii) Accounting Rate of Return (using total investment).
(iv) Payback Period.
(v) Net Present Value.
(vi) Internal Rate Of Return
(b) Evaluating projects on an Independent Basis (rather than Mutually Exclusive) and using NPV evaluation method would mean:
(i) Choose the individual project with the highest NPV (Net Present Value).
(ii) Choose the individual project with the highest ARR.
(iii) Choose all projects with a positive NPV.
(iv) Choose all projects with an ARR greater than the W.A.C.C.

This page has been left blank for you to write your response to Part B of this Case Study