Accounting for Management M 5011
SP2 2018
Accounting practice and problem solving
Learning Objectives addressed in this assessment:
CO1: Apply basic accounting principles and concepts in order to understand what accounting information is, what it means and how it is used;
CO2: Explain the significance of accounting information in the business environment; CO3: Read and interpret financial reports and apply knowledge to critically analyse corporate financial and non-financial information. Graduate Qualities developed by this assessment:
GQ1: You need to operate effectively upon fundamental accounting practical knowledge;
GQ2: You are prepared for lifelong learning and professional practice;
GQ3: You are working to be an effective business related problem solver;
GQ4: You can work autonomously and independently;
GQ5: You are committed to ethical action & social responsibility for business activities.
GQ6: You can communicate effectively in written language.
This assignment can be completed individually or in a group of no more than 2 students.
Assignment Context:
You have recently joined Business Smart, a finance and business consultation firm. Your manager Mr. James Brown will take family leave. He has asked you to prepare a consultation report for an important client, Company A, before he returns on 20 April, 2018.
Company A is an energy company utilising national and global resources to provide a variety of energy solutions. It has recently announced the appointment of a new Chief Executive Officer. Before the arrival of the new CEO, Company A decides to conduct a comprehensive review of the company’s financial performance and risk in the past three years, and in particular, to better understand how its financial performance is benchmarked against other rivals with similar profiles in the Energy sector. Based on this review, financial records can be accurately prepared and any issue regarding business performance can be identified. Company A considers this review very important and timely in assisting the incoming CEO to set out new plans for its future performance development.
In addition, Company A has been under public scrutiny recently because of its high carbon emissions and energy consumption. As a response, several board members are discussing improving the company’s reporting on environmental challenges and strategies for environmental protection. However, a few other board members are concerned about the risk associated with lifting such reporting. They argue that the company should focus on the main business areas and regaining profit. The issue is pending for the new CEO to resolve.
Required:
1. Select Company A and a benchmarking company for analysis. You need to choose two companies from a list of Selected ASX Listed Energy Companies provided as a separate file under Assignment on the course website.
(1) The name of the company selected as Company A should begin with the same letter of the alphabet as your surname (or your fellow student’s surname should you do the assignment in pairs), e.g. if your surname is Alpha, you can use Acacia Coal Ltd or ADX Energy Ltd.
(2) The name of the company selected as the benchmarking company should begin with the same letter of the alphabet as your first name (or your fellow student’s first name should you do the assignment in pair), e.g. if your first name is Beta, you can use Beach Energy Ltd or Berkeley Energy Ltd.
Note: If you cannot find an appropriate company to analyse, you may randomly select a company from the list but you need to clearly justify the reason in your assignment.
2. Go to the company information database DatAnalysis Premium via the UniSA Library website. Under Company Reports, search for the companies you selected according to their ASX Codes or part of the company names. Go to Financial Data to review these companies’ financial statements and ratios for the financial years from 2015 to 2017.
3. Based on available data, analyse and compare the financial results of Company A and the benchmarking company selected. Your comparative analysis should cover the following points:
(1) Which company is more profitable and generates healthier returns?
(2) How well are the two companies managing their resources? Do you think Company A is efficient in managing its assets compared with the benchmarking company?
(3) Can Company A meet its short term debts? How is its liquidity compared with the benchmarking company?
(4) Do you think Company A will stay in operation in the long term? How is its long term financial stability compared with the benchmarking company?
Your answer to each question should be supported by adequate evidence (i.e. financial statement data and ratio results) and analysis.
4. Go to Annual Reports to review the past three years’ annual reports of Company A and the benchmarking company. Are there any non-financial issues reported? Are they of concern and having a potential impact on the company’s financial position and performance? Discuss how these additional issues and evidence disclosed in the annual reports may influence your previous comparative results.
5. Does the benchmarking company produce any report or information about environmental issues such as environmental pollution and energy consumption? Do you think Company A should follow what the benchmarking company is doing? Do you support reporting on environmental strategies and challenges or do you think the company should focus on business growth and regaining profit instead? Explain.
I. Submission Notes:
• Your consultation report must be presented in a clear format, including an introduction and conclusion, and with correct grammar, expression and in-text referencing. Read the Writing Reports Guide on the course Learnonline website before submission.
• This assignment must be submitted online. Hard copies are NOT accepted. If the assignment is completed by two students, only one student needs to make the submission.
• Please submit one single Word Document only. Please do not attach the assignment cover sheet. Instead, clearly indicate your name and student ID (if applicable, plus your fellow student’s name and ID) on the first page of the submission. This is to avoid high similarity of the assignment cover sheets reported in Turnitin.
• The word limit for this assignment is 2400 words (excluding references and appendices if applicable).
• You are required to use the Harvard Referencing style. The minimum number of references for this assignment is five (excluding the textbook and reference to annual reports). In professional business reports, your references used have to be based on proper academic sources (books, book chapters, journal articles, etc.). Internet sources such as Wikipedia or Investopedia, are deemed to be unacceptable. If you are not sure about the referencing style, please read the Referencing guide on the course Learnonline website.
• You may ask your lecturer/tutor for help while completing this assignment, but they will only answer general questions and will not ‘check’ student answers to the assignment. You may only discuss the assignment with other students at a general or conceptual level, that is, you may talk about the issues, not the details.
• You should not prepare your assignment together with other students or groups, nor should you compare your final answers with other students or groups. It is NOT acceptable to share files, templates, or electronic versions of assignment questions with other students or groups. To ensure Academic Integrity, all submissions will be checked through Turnitin databases which include online publications, internet resources and past student submissions.
• Remember, your assignment must be all your own work. If you present material that is not all your own work you have engaged in academic dishonesty which is taken very seriously and dealt with very severely. Refer to the Academic Integrity section of the Learnonline course website.
• Due date: Friday, 20 April, 2018 by 11am