Explain how micro- and macroeconomics impact on the competitive environment of an organisation

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Level 4 Assignment Guide 2021/2022

 

Business Finance and Economics

Contents                                                                                       Page No.

  1. Introduction........................................................................................ 3
  2. Written Assignment Guidance.............................................................. 4

2.1.   Task One – Business Performance and Competition........................ 4

2.2.   Task Two – The Role of Accounting................................................ 4

2.3.   Task Three – The Major Financial Statements................................. 4-5

2.4.   Task Four – Financial Ratios......................................................... 5-7

2.5.   Task Five – Management Accounting.............................................. 7

  1. Conclusion.......................................................................................... 

1. Introduction

The Assignment Guide should be used in conjunction with the Assignment Brief as its purpose is to provide guidance as to how best to respond to the requirements of the assignment brief. It also gives an indication of what the marker will be looking for in the piece of work.

All five learning outcomes are addressed within the tasks of the assignment:

1) Explain how micro- and macroeconomics impact on the competitive environment of an organisation;

2) Demonstrate knowledge of the role of accounting within the organisation with respect to both reporting and decision-making aspects;

3) Explain the structure and terms used within the main financial statements;

4) Interpret management accounting techniques for planning, control and decision-making within the organisation;

5) Calculate the main accounting ratios and explain their significance in terms of organisational performance.

To succeed in the module you must satisfy all learning outcomes, which in turn means addressing each part of the assignment brief – missing something out will impact your grade negatively

2. Written Assignment Task Guidance

2.1. Task One – Business Performance and Competition

“Outline the external and internal determinants of business performance and distinguish whether these are micro- or macroeconomic.”

a) Refer to the taught element and recommended readings to help focus on the most relevant aspects before undertaking any further research.

b) Mention and briefly discuss the main determinants and make clear whether these are micro or macro.

c) Discuss the factors that impact on the competitive environment of a firm

d) Provide citation(s) directly relevant to each part of the question. This should be the main text, plus an additional text or a peer-reviewed article from a reputable journal.

e) Word Count: 500 max.

2.2. Task Two – The Role of Accounting.

“Explain the role and importance of accounting with respect to decision-making within an organisation.”

a) Before typing this section use the information from lecture 2 and the research you have carried out.

b) Explain the role of accounting within an organisation – discuss what accounting is concerned with and its branches; the need for financial reporting and accounting rules - relate your answer to decision-making.

c) Use examples to support your claims/arguments

d) Use citations from the main text as well as from an additional text or refereed article from a reputable journal

e) Word Count: 500 max.

2.3  Task Three – The Major Financial Statements.

“Distinguish between the major financial statements and explain the layout and terms used within each statement.”

a) Differentiate between the key financial statements covered in Lecture 2; refer to prescribed readings. Explain how micro- and macroeconomics impact on the competitive environment of an organisation

b) For each of the financial statements, explain what they represent, their layout and the elements that are taken into consideration in order to derive the bottom figure / line

c) Use relevant citations – one of which must be from the main reading.

d) Word Count 450 max.

2.4 Task Four – Financial Ratios

“Using the information from the statements of financial position (balance sheets) and income statements (profit & loss accounts) below, calculate and interpret the following ratios for XYZ Plc for the years ended March 31 2019 and 2020, respectively (400 words):

i) Operating Profit Margin

ii) Gross Profit margin

iii) Current Ratio

iv) Acid Test Ratio

v) EPS (Earnings Per Share)”

 XYZ Plc

 

Statements of financial position (Balance Sheets) as at 31 March

 

2019

2020

 

£m

£m

ASSETS

 

 

Non-current assets

 

 

Property, plant & equipment (at cost less depreciation)

Land & buildings

386

430

Fixtures & fittings

134

170

 

520

600

Current assets

 

 

Inventories

350

410

Trade receivables

240

280

Cash at bank

5

-

 

595

690

Total assets

1115

1290

EQUITY & LIABILITIES

 

 

Equity

 

 

£0.50 ordinary shares

400

400

Retained earnings

275

245

 

675

645

Non-current liabilities

 

 

Borrowings - 9% loan notes (secured)

250

350

Current liabilities

 

 

Trade payables

165

200

Taxation

22

4

Short-term borrowings (all bank overdraft)

3

91

 

190

295

Total equity & liabilities

1115

1290

 

Income Statements (Profit & Loss Accounts) for the year ended 31 March

 

2019

2020

 

£m

£m

Revenue

2500

2750

Cost of sales

(1850)

(2375)

Gross profit

650

375

Operating expenses

(410)

(340)

Operating profit

240

35

Interest Payable

(18)

(20)

Profit before taxation

222

15

Taxation

(55)

(3)

Profit for the year

167

12

Notes:

  1. The market value of the shares of the business at the end of the reporting period was £3.00 for 2019 and £2.00 for 2020.
  2. All sales and purchases are made on credit.
  3. At 1 April 2018, the trade receivables stood at £250 million and the trade payables at £210 million.
  4. A dividend of £40 million had been paid to the shareholders in respect of each of the years.
  5. The business employed 14,000 staff at 31 March 2019 and 18,628 at 31 March 2020.
  6. The business expanded its capacity during 2020 by setting up a new warehouse and distribution centre.
  7. At 1 April 2018, the total of equity stood at £450 million and the total of equity and non-current liabilities stood at £650 million.

a) Refer to Lecture 3 and prescribed readings to refresh the key financial ratios and formulas used to determine them.

b) Identify the relevant formula for each ratio to be calculated.

c) For each ratio calculated, ensure that the relevant formula is shown / displayed within your answer in full.

d) Refer to the financial statements provided to obtain the relevant information / figures and input them to the formulas in order to calculate the appropriate ratios

e) In addition to d) above, pay attention to the notes (i-vii) at the end of the statements as you will have to use some of the figures provided within those for your calculations

f) Provide the results in percentage or decimal terms depending on the ratio you are calculating

g) Interpret the meaning / significance of each ratio calculated and explain any implications for XYZ Plc.

h) Use relevant citations – one of which must be from the main reading.

i) Word Count 500 max.

2.5 Task Five – Management Accounting

“Define management accounting and discuss how this is important for planning, control and decision-making within an organisation.”

a) Refer to Lecture 4 and prescribed readings to identify the relevant content before you undertake further research.

b) Clearly define management accounting; direct / paraphrased quotations appropriate in-text citations and referencing must be supplied.

c) Discuss the importance of management accounting with respect to planning, control and decision-making in business. See Lecture 4 to help identify key aspects.

d) Use relevant citations – one of which must be from the main reading.

e) Word Count 500 max

3. Conclusion

This written assignment, like all other pieces of work for Higher Education studies, requires you to base your thoughts, statements, and ideas on research. Explain how micro- and macroeconomics impact on the competitive environment of an organisation

Please remember to:

a) Ensure that each piece of information you use in your work comes from research – never your own thoughts.

b) That you follow the Harvard Reference System on the reference page and within your work.

c) That the writing style that you adopt is academic i.e. third person, uses appropriate specialist language, and has no conjunctions.

d) That the written assignment followed the required structure – refer to the guidance given during your Foundation Year modules.


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