AC4052 Financial Accounting Coursework brief

AC4052 Financial Accounting – 2023-2024

Resit Assessment Component: Coursework

Weighting: This Coursework contributes 100% to the Overall Module Mark

Word count:  Section A 1200 words and Section

Section B                      300 words Total 1500 words

Submission: Students to submit via module Weblearn

Deadline:________________

Requirements: This coursework has two sections. Section A has one question and Section B has two questions. ANSWER ALL QUESTIONS IN BOTH SECTIONS.

SECTION A

This assignment requires each student to work on the published financial statements of Asos plc for the last three years from 2023 to 2020.

You are required to write a report to evaluate the performance, liquidity and financial structure of the three years from 2023 to 2020.

You should use the accounting ratios shown below and any other information relevant to Asos plc. Information can be accessed from the annual report and accounts and any other source of evidence that you believe helps to explain the company’s performance and position.

You should also highlight any limitations in the use of accounting ratios that you found in your analysis and evaluation of the company over the three-year period.  This may include reference to the movements in the company’s share price.

                                                                                                                                                                  Total 40 Marks  

 

	ASOS PLC
	London, England
	31/08/2023	31/08/2022	31/08/2021	31/08/2020
	GBP	GBP	GBP	GBP
Profitability ratios
∟ Return on Shareholders Funds (%)	17.13	17.54	7.3	23.25
∟ Return on Capital Employed (%)	9.39	12.52	6.99	22.72
∟ Return on Total Assets (%)	6.14	7.14	2.66	10.13
∟ Profit margin (%)	4.53	4.35	1.21	4.22
∟ Gross margin (%)	45.43	47.42	48.81	51.18
Operational ratios
∟ Net Assets Turnover (x)	2.07	2.87	5.78	5.38
∟ Fixed Assets Turnover (x)	2.95	3.37	4.39	4.8
∟ Interest Cover (x)	14.42	15.96	17.55	511
∟ Stock Turnover (x)	4.85	6.13	5.09	5.93
∟ Debtor Collection (days)	3.88	2.36	2.54	2.13
∟ Creditors Payment (days)	36.81	39.5		14.8
Structure ratios
∟ Current ratio (x)	1.56	1.19	0.81	0.9
∟ Liquidity ratio (x)	0.75	0.57	0.11	0.17
∟ Gearing (%)	85.13	42.86	20.88	2.32
Per employee ratios
∟ Profit per employee (unit)	58,701	37,160	6,961	23,910
∟ Turnover per employee (unit)	1,296,155	853,426	574,869	566,643
∟ Salaries/Turnover	4.14	5.61	6.58	6.68

Source FAME DATA BASE

Marking criteria for section A:

	Explanatory comments on the assessment criteria	Maximum marks for each section  Recommended marks
	Assessment criteria: (guidelines – suggested –under FOUR MAIN HEADINGS)
Introduction	Background of the business and its operations	10%
Interpretation of ratios	Relevance, clear demonstration of understanding and applied in context	70 %
Conclusion	Identifying the key points raised in the report	10 %
Format, referencing, bibliography, use of tables/charts	Structured analytical report with supporting referencing where appropriate	10%

 

SECTION B     

Question 1

Mr. and Mrs Yeltsin run a small private company selling toys from Taiwan. Mr Yeltsin has asked you to prepare set of financial statement for the year ended 31 December 2023 as soon as possible as the previous accountant left the company at very short notice.

Audit and Accountancy	1,000
Advertising	900
Bank	1,500
Creditors		8,900
Long Term Bank Loan		2,200
Debtors	41,350
Directors remuneration	48,500
Electricity	2,800
Insurance	1,700
Fixtures and Fittings
At Cost	100,000
Accumulated depreciation (at 1.1.2023)		40,000
Motor Vehicle
At Cost	45,000
Accumulated depreciation (at 1.1.2023)	–	2,350
Office expenses	5,700
Ordinary £1 shares (issued and fully paid)		20,000
Profit and loss account (at 1.1.2023)		13,200
Purchases	180,000
Rent and rates	7,500
Sales	–	385,000
Stock (at 1.1.2023)	14,500
Wages and salaries	21,000
Bank Interest	200
	£471,650	£471,650

Additional Information:

	1.    Stock at 31st December 2023 valued at cost amounted to £21,000. 2.    Depreciation is to be provided on fixtures and fittings at 20% on cost 10% on reducing balance method for motor vehicle. 3.    Provision is to be made for electricity for £550. 4.    Insurance paid in advance at 31st December 2023 amounted to £450.
	Required
1.    Prepare Income statement for the year ended 31st December 2023.  (10Marks) 2.    Prepare Balance Sheet as at 31st December 2023   (15 Marks) 3.    Identify FIVE accounting concepts that have been applied in the preparation of financial Statements and explain their meaning.   (10 Marks)

                Total 35 Marks

Question 2

The following statements of financial positions for the year ended 31st December 2023 and 2022 have been prepared for Sharma Limited.

Statement of financial positions at:	31.12.23		31.12.22
	£	£	£	£
Non-current assets
Plant and machinery at cost	45,000		45,000
Less: Depreciation	(10,000)		(8,000)
		35,000		37,000
Investments at cost		–		15,000
Current assets
Inventory	36,000		16,000
Trade receivables	24,000		12,000
Cash	–		5,000
		60,000		33,000
		95,000		85,000
Capital and reserves
Ordinary share capital	40,000		40,000
Share premium account	7,000		7,000
Retained earnings	9,000		3,000
Shareholders’ funds		56,000		50,000
Non-current liabilities
Loans		–		20,000
Current liabilities
Trade payables	29,000			15,000
Bank overdraft	10,000	39,000
		95,000		85,000

Additional information:

There were no purchases or sales of plant and machinery during the year.

Required                     

1. Mrs Sharma has asked you to prepare Sharma Limited’s statement of cash flows for the year ended 31st December 2023.  (18 Marks)     
2. Write a short memo to Mrs Sharma explaining the findings of your statement of cash flow. (7 Marks)  

                                                                                                                        Total 25 Marks

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