Assistance on contemplating an investment

Accounting for Managers (ACFI5020)

Deferral / Referral Assignment (2) 2017/2018

A friend, who is a member of an investment society, has asked you for assistance as the members of the society are contemplating an investment in Marks & Spencer plc.

You are required to:

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i) Using accounting data from the Marks & Spencer website ( http://annualreport.marksandspencer.com/ )

You can easily access the 2017 and 2018 statements here – you may need to search for other years.

you should calculate ratios in the following areas:

· Profitability

· Liquidity/Solvency

· Working capital efficiency

· Long term financial structure

· Investors’ viewpoint

You must show the workings for these ratios and present the accounting statements that you have used in the appendices to the work. You should calculate at least 5 years of accounting ratios. You may use the ‘notes’ to the accounts (as indicated on the financial statements) to find more detailed information.

(20 marks)

ii) You should contrast the performance of Marks & Spencer with a competitor in order to advise the investment society whether or not you consider Marks & Spencer to be a good investment at the current time. Provide a brief rationale for your choice of competitor.

Any ratios, or data, that you use for a competitor may be calculated or sourced from publicly available databases.

(30 marks)

iii) You are required to provide a discussion of the potential use of strategic management accounting methodologies/philosophies, to assist companies such as Marks & Spencer, to respond to the current economic situation. You should consider both the benefits and limitations of strategic management accounting approaches within this role. Your answer should give examples generally relevant to Marks & Spencer.

Using the Harvard style of referencing, your response here should include numerous academic sources to support your discussions.

(50 marks)

Further Information:

For Parts (i) and (ii) you are specifically reminded that:

1. 5 years of analysis are required.

2. Benchmarking to at least one competitor

3. Make sure that you explain why the ratios are changing and what the implications or conclusions of this are.

4. Contemplate your presentation. This work lends itself to the use of graphs, charts, tables and so on.

5. Make sure that you are using the correct accounting data – for instance for 2018 the financial statements begin on page 77 of the 2018 Annual Report. You need the ‘Consolidated’ statements.

6. Show your workings – that includes the data used in the formulae used.

You are required to present well structured answers of no more than 3,000 words (excluding calculations) in total. The words should be allotted according to the percentage marks awarded for each task.

Learning Outcomes specifically assessed:

Subject Specific Knowledge and Skills

1. Identify and critically appraise the different components of a financial report, and assess the adequacy of current international financial reporting requirements for a greater understanding of company performance

2. Analyse and interpret financial data and information, evaluate their relevance and validity, and synthesise a range of information in the context of business situations

3. Demonstrate the ability to use conventional management accounting and financial management techniques to produce appropriate information for management to aid planning, control and decision making

4. Evaluate the usefulness of contemporary management accounting techniques in measuring business performance

5. Critically appraise management accounting techniques with respect to their effectiveness and identify any weaknesses inherent in their use

Non Subject Specific and Cognitive Skills

1. Manage own learning, using the available range of resources, and ability to conduct research into business and management issues

2. Ability to collect relevant information relating to a given situation, analyse that information and synthesise it into an appropriate form in order to evaluate decision alternatives

3. Demonstrate a practical and integrative approach to a problem area or issue

4. Demonstrate rigour of academic arguments as well as the application of theory

Assignments will be graded according to the general postgraduate assessment criteria and you should also consider the following:

· Evidence of critical judgement in selecting, ordering and analysing content in order to present a sound argument

· The demonstration and understanding of relevant concepts and models

· The demonstration of insight and originality in responding to the assignment

· The provision of well-referenced evidence

Students are reminded that they are required to achieve an average of 50% overall in order to pass this module and that this assignment carries a 70% weighting towards the final module grade.

All of the usual University regulations will apply with regard to the late submission of work and plagiarism.

Hand in date: 13th August 2018

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