Question: 1
a.  Sandersen, Inc., sells minicomputers. The firm’s taxable income is $1,225,000. Calculate the corporation’s tax liability.

Corporate Tax Rates
15%	$ 0–$50,000
25%	$ 50,001–$75,000
34%	$75,001–$10,000,000
35%	over $10,000,000
Additional surtax:
5% on income between $100,000 and $335,000.
3% on income between $15,000,000 and $18,333,333.

 
b.  “Originally, the sole objective of the federal government in taxing income was to generate financing for government expenditures. Although this purpose continues to be important, social and economic objectives have been added.” Substantiate the statement with enough explanations.
Question: 2                                                                                                    
a.  Friedman Manufacturing, Inc. has prepared the following information regarding two investments under consideration. Which investment is better, based on risk (as measured by the standard deviation) and return?

Common Stock A		Common Stock B
Probability	Return	Probability	Return
0.2	12%	0.1	4%
0.5	18%	0.3	6%
0.3	27%	0.4	10%
		0.2	15%

 
b.  “ More can be said about risk, especially as to its nature, when we own more than one asset in our investment portfolio.” Define risk and explain how risk is affected if we diversify our investment by holding a variety of securities?
Question 3:                                                                                              
a.  J and S Corporation is evaluating its financing requirements for the coming year. The firm has only been in business for 1 year, but its CFO predicts that the firm’s operating expenses, current assets, net fixed assets, and current liabilities will remain at their current proportion of sales.
Last year J and S Corp. had $15 million in sales with net income of $1.5 million. The firm anticipates that next year’s sales will reach $18 million with net income rising to $3 million. Given its present high rate of growth, the firm retains all its earnings to help defray the cost of new investments.
The firm’s balance sheet for the year just ended is found below:

	J and S Corporation
Balance Sheet
	12/31/2000	% of Sales
Current assets	$6,000,000	40%
Net fixed assets	9,000,000	60%
Total	$15,000,000
Liabilities and Owners’ Equity
Accounts payable	$3,750,000	25%
Long-term debt	4,250,000	NAa
Total liabilities	$8,000,000
Common stock	2,000,000	NA
Paid-in capital	2,800,000	NA
Retained earnings	2,200,000
Common equity	7,000,000
Total	$15,000,000

Not applicable. This figure does not vary directly with sales and is assumed to remain constant for purposes of making next year’s forecast of financing requirements.
Estimate J and S corp. total financing requirements (i.e., total assets) for 2001 and its net funding requirements (DFN).
b.  Give a brief summary of forecasting to determine additional (discretionary) funding (financing) needed.
Question 4:
The balance sheet and income statement for the McDonald’s are as follows.

		McDonald’s Corporation 2016 Income Statement ($ Millions)
Sales		$11,508
Cost of goods sold		6,537
Gross profits		$4,971
Marketing expenses and general
and administrative expenses	$1,832
Depreciation expense	345
Total operating expenses		$2,177
Operating profits		$2,794
Interest expenses		387
Earnings before taxes		$2,407
Income taxes		765
Net income before preferred stock dividends		$1,642
Preferred stock dividends		25
Net income available to common stockholders		$1,617

 

McDonald’s Corporation December 31, 2016 Balance Sheet ($ Millions) Assets
Cash	$341
Accounts receivables	484
Inventories	71
Prepaid expenses	247
Total current assets	$1,143
Gross fixed assets	$20,088
Accumulated depreciation	5,127
Net fixed assets	$14,961
Investments	702
Other assets	1,436
Total assets	$18,242
Liabilities and Equity
Liabilities (debt):
Short-term notes payable	$1,629
Accounts payable	651
Taxes payable	53
Accrued expenses	652
Total current liabilities	$2,985
Long-term debt	6,325
Total liabilities	$9,310
Equity:
Preferred stock	$80
Common stock:
Par value and paid in capital	$708
Retained earnings	11,927
Treasury stock	-3,783
Total common equity	$8,852
Total equity	$8,932
Total liabilities (debt) and equity	$18,242

 
a.  Calculate the following ratios:

RATIO	INDUSTRY NORM
Current ratio	0.7
Inventory turnover	90
Average collection period	6.5 days
Debt ratio	50%
Total asset turnover	1.5
Fixed asset turnover	2
Operating profit margin	21%
Return on common equity	15%

b.  Calculate the future sum of $5,000 given that it will be held in the bank 5 years at an annual interest rate of 6 percent.
c.  Knutson Products, Inc., is involved in the production of airplane parts and has the following inventory, carrying, and storage costs:

1. • Orders must be placed in round lots of 250,000 units.
   • The carrying cost for 1 unit of inventory is $ 10
   • The ordering cost is $100 per order.

• Determine the optimal EOQ level.
• Determine the average inventory when the safety stock is 2000 units.

Question 5:
“Some of the financial techniques and strategies are necessary for the efficient operation of an international business. Problems inherent to these firms include multiple currencies, differing legal and political environments, differing economic and capital markets, and internal control problems. The difficulties arising from multiple currencies are stressed here, including the dimensions of foreign exchange risk and strategies for reducing this risk.” Elucidate.
 
Question 6:
Explain the financial Axioms

1. Risk – return trade-off
2. Time value of money
3. Cash is king
4. Incremental cash flows
5. The agency problem
6. Taxes bias business decisions
7. All risk is not equal
8. Ethical dilemmas are everywhere in finance
9. The Curse of Competitive Markets
10. Efficient Capital Markets

 

 

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Module title: Business Analysis Project

1. Key Information

Every module has a Module Definition Form (MDF) which is the officially validated record of the module.  You can access the MDF for this module via:

• the Virtual Learning Environment (VLE)

All modules delivered by Anglia Ruskin University at its main campuses in the UK and at Associate Colleges throughout the UK and overseas are governed by the Academic Regulations.  You can view these at www.anglia.ac.uk/academicregs.  An extract of the Academic Regulations, known as the Assessment Regulations, is available at this website too.
In the unlikely event of any discrepancy between the Academic Regulations and any other publication, including this module guide, the Academic Regulations, as the definitive document, take precedence over all other publications and will be applied in all cases.

2. Introduction to the Module

Managing and understanding how a business performs are critical tasks for management, particularly in the context of a rapidly changing and competitive organisational environment.  This module focuses on both strategic and operational aspects and integrates topics and themes from other modules.  This integrative approach enables students (managers) to develop a comprehensive understanding of the issues facing an organisation and the implications of those issues for its well-being.
This module is largely self-managed and action oriented.  Although the emphasis is on a single organisation, almost inevitably the student will need to consider other organisations in order to make any findings meaningful.  As such, it involves an awareness of values and judgements managers make using both qualitative and quantitative concepts and data.
One of the main focuses for the design of this module has been the further development of relevant employability and professional skills.  Such skills are implicit in the learning outcome.
This module will be assessed by a 3000 word assignment.

3. Learning Outcomes and Outline Delivery

This module, like all modules at Anglia Ruskin, is taught on the basis of achieving intended learning outcomes.  On successful completion of the module, the student will be expected to be able to demonstrate the following:

Knowledge and understanding      Intellectual, practical, affective and transferable skills LO 1.    Evaluate the ways in which competitive forces impinge on an organisation’s performance;LO 2.    Critically examine relationships between organisational issues and strategic development; LO 3.    Apply appropriate qualitative and quantitative tools, techniques and concepts to clarify, synthesise and evaluate an organisation’s current effectiveness and future prospects; LO 4.    Develop a critical and practice-based insight into the key issues facing an organisation, supported by clear evidence-based findings and to communicate those findings and make recommendations.

The assessment is based on meeting these learning outcomes, shown explicitly in section 4, where the assessment task is linked to these learning outcomes.
The table below indicates how the module will be delivered.  However, this schedule is indicative and may be subject to change. These sessions will need to be condensed into 10 weeks for TRI3.

Part	Lecture	Seminar/Workshop	Student-managed learning
0	Pre-module	Briefing on purpose and direction of module and preparation	Pre-module reading and research on one focus company and its competitors.
1	Module introduction – purpose, direction and outcomes.Sources of information	Selection of target organisations; suitability for study, access to company informationDiscovering, assessing and exchanging details of favourite sources – valid, neutral, reputable and reliable sources	Research and data gathering for chosen firms Testing and sharing sources of information
2	Student presentations  (1)formative, not assessed	Students’ preliminary presentations on choice of focus company and what they expect to find out	Class dialogue on current economic and business issues and their influences on strategy formulation.
3	Frameworks for competitive advantageQuestioning & updating academic frameworks	Revise, review and test knowledge of standard models e.g. PEST, 5-forces, Ansoff etc. Revise the standard accounting ratios and their implicationsHow we can adapt and update frameworks?	Revision and updating of learning from earlier strategy and accounting modules.Johnson, Scholes & Whittington (2011) Exploring Corporate Strategy, Pearson Education Ltd, 9th edition. Read works of Downes & Mui, Miller A., Bowman C., Yip., Ansoff I.
4	Balanced Scorecard and KPIsand Strategy Map	Identifying and understanding industry-specific key performance indicators	Researching specific company and industry sources and identifying the special KPIs for that sector. Read articles by Kaplan and Norton on the Balanced Scorecard and the Strategy Map.
5	Drivers of globalisation	Identifying and assessing the main factors driving globalisation	Reading and researching e.g. good quality press articles in order to assess the influence of globalisation (based on Yip, G.). PWC and World Bank and WEF and other reports
6	Spreadsheet modelling – computer room	Replication of company P&L and Balance Sheets in spreadsheets. Revision and use of spreadsheet formulae.
7	Spreadsheet modelling – computer room	Development of student’s own spreadsheet model
8	Student presentations (2)formative not assessed – progress check	Short (3 Powerpoint slides) presentations on the main issues uncovered in focus company and two comparators.	Identifying key problems / issues, identifying industry-specific KPIs.
9	Case studye.g. Marks & Spencer Case study:- e.g. Low cost airlines	Application of academic frameworks; modelling & spread-sheeting figuresSelecting the appropriate measurables.	Identify industry-specific KPIs, integrating  soft (qualitative) and hard (quantitative) data.Industry-specific KPIs, example of airlines, Doganis,R.
10	Investment appraisal frameworks, NPV, IRR,Decision tree analysis	Applications and implications	Will be advised in lecture
11	ReviewStudent presentations updated (not assessed, formative)	Workshop	Realistic strategy options. Testing options with a spreadsheet, integrating the analysis into a Powerpoint presentation
12	Review	Workshop – question and answer session	Realistic strategy options. Testing options with a spreadsheet, integrating the analysis into a PowerPoint presentation

4. Assessment

4.1. How this Module is Assessed: What You Need to Do and When
The assessment for this module consists of one element.

Element	Type of assessment	Word or time limit	% of Total Mark	Submission method	Final Submission Date
10	INDIVIDUAL ASSIGNMENT 3000 WORDS		100%	in hard copy	2pm10th August 2019

Individual Assignment 3000 words (100%)
You are required to prepare a 3,000 words report on an enterprise of your own choosing. This will be a critical appraisal of the competitive position of the enterprise and you will benchmark with two similar organisations.
This module simulates the problems (issues) that real life senior managers deal with and requires you to test some of your proposed solutions. The focus is on some aspect of competitive advantage and how this is reported in published information and also in financial reports and statistics.
The module is integrative, it requires you to look at competitive strategy from different angles (e.g. organisational, operational, market, financial etc).  You must pull together these strands in order to form a coherent picture of the issues (i.e. the problems and opportunities) inside and around your chosen organisation.
Part of your analysis will be qualitative – “soft” – and part of your analysis will be quantitative – “hard”. You must pull together “soft” analysis and “hard” (financial and market data) in order to perform a complete analysis.
It is valuable to be aware of the key performance indicators that are employed in each market sector. The traditional financial ratios are useful here, but do not give the full picture. Some sectors have very specialised KPIs. How does your chosen organisation compare with your chosen benchmark organisations in these key areas?
The module also requires an awareness of values and judgements in financial and other reporting. You must interpret evidence from a number of different sources in order to give your judgement on numerical data represented in the accounts.
The module requires you to test the outcomes of your recommendations using spreadsheet scenario modelling. You should comment on the suitability, acceptability and feasibility of your recommendations and integrate the figures derived from your scenario modelling in this section.
Reassessment
As the assessment is scenario-based, the re-assessment is the same as the first attempt assessment.
Resit submission deadline is no later than 2pm Friday 9^th January 2020.
4.2. Submitting Your Work
OPTION A (SAM Trinidad)
All coursework assignments and other forms of assessment must be submitted by the published deadline which is detailed above.  It is your responsibility to know when work is due to be submitted.
All student work which contributes to the eventual outcome of the module (ie: if it determines whether you will pass or fail the module and counts towards the mark you achieve for the module) is submitted via GradeMark®.  You CANNOT submit work for this module via the iCentres.  Additionally, academic staff CANNOT accept this work directly from you
Work that is submitted late – defined as up to five working days after the published submission deadline – will be accepted and marked.  However, the element of the module’s assessment to which the work contributes will be capped with a maximum mark of 40%.
You are requested to keep a copy of your work.
OPTION B (All other international partners)
All coursework assignments and other forms of assessment must be submitted by the published deadline which is detailed above.  It is your responsibility to know when work is due to be submitted.
All student work which contributes to the eventual outcome of the module (ie: if it determines whether you will pass or fail the module and counts towards the mark you achieve for the module) is submitted via the iCentreusing the formal submission sheet. Academic staff CANNOT accept this work directly from you.
If you decide to submit your work to the iCentre by post, it must arrive by midday on the due date.  If you elect to post your work, you do so at your own risk and you must ensure that sufficient time is provided for your work to arrive at the iCentre.  Posting your work the day before a deadline, albeit by first class post, is extremely risky and not advised.
Work that is submitted late – defined as up to five working days after the published submission deadline – will be accepted and marked.  However, the element of the module’s assessment to which the work contributes will be capped with a maximum mark of 40%.
You are requested to keep a copy of your work.
4.3. Feedback
You are entitled to feedback on your performance for all your assessed work.  For all assessment tasks which are not examinations, this is accomplished by a member of academic staff providinga mark and associated comments which will relate to the achievement of the module’s intended learning outcomes and the assessment criteria you were given for the task when it was first issued.
Examination scripts are not returned to students.  However, you are entitled to feedback on your performance in an examination and may request a meeting with the Module Leader or Tutor to see your examination script and to discuss your performance.
Anglia Ruskin is committed to providing you with feedback on all assessed work within 20 working days of the submission deadline or the date of an examination.  This is extended to 30 days for feedback for a Major Project module (please note that working days excludes those days when Anglia Ruskin University is officially closed; eg: between Christmas and New Year).Personal tutors will offer to read feedback from several modules and help you to address any common themes that may be emerging.
For students studying at one of our Associate Colleges, local arrangements for the return of your assessed work will be published.
On occasion, you will receive feedback and marks for pieces of work that you completed in the earlier stages of the module.  We provide you with this feedback as part of the learning experience and to help you prepare for other assessment tasks that you have still to complete.  It is important to note that, in these cases, the marks for these pieces of work are unconfirmed.  This means that, potentially, marks can change, in either direction!
Marks for modules and individual pieces of work become confirmed on the Dates for the Official Publication of Results which can be checked at www.anglia.ac.uk/results.

5. Learning Resources

5.1. Library
Library Contacts:
Lord Ashcroft International Business School
libteam.aibs@anglia.ac.uk
5.2. Other Resources
n/a

6. How is Your Work Marked?

http://web.anglia.ac.uk/anet/academic/qad/module_guide/modguide_how_work_marked.php

7. Assessment Criteria and Marking Standards

http://web.anglia.ac.uk/anet/academic/public/modguide_level7_asst_crit.pdf
SID:				Focus company:	Benchmark 1	Benchmark 2
		LOs					Weight	Mark
	a	1 – 4	Research on industry sector and selected organisation,    referencingWide research and reading – good bibliography and referencing – every piece of information and all non-original work must be referenced to original author.Information is not free,  it is the intellectual property of the original author who must be acknowledged Do not describe analytical models.    Sources:  FT, Economist,   HBR,   quality newspapers & journals,   Mintel & Keynote market sector reports,    Dunn & Bradstreet ,   specialist journals.    Be careful with online sources – DO NOT download web-based material without referencing.				10%
	b	3	Detailed financial analysis,   including financial spreadsheet modelling of recommended strategy optionsExamine trends over 3 – 5 years:- e.g. sales,    market share,   profitability,   cash,    debt,    investment,   p/e  – and compare with key competitors.    Use specific Performance Indicators relevant to your chosen sector.  Use only relevant financial ratios (no need to examine all of them).  WHAT ARE THE INDUSTRY-SPECIFIC KPIs?  Each sector has its own special KPIs. Interpret and discuss your findings – IDENTIFY KEY ISSUES.				15%
	c	1 – 4	Analysis,    interpretation and discussion of strategic issuesEstablish the context and background – apply models to the case.    Examine the market and competitors, operations and organisation.    Interpret and discuss your findings – IDENTIFY KEY ISSUES APPLY theory & models to help you ANALYSE – do notDESCRIBE the theory It is advisable to select one or maximum two theoretical models e.g. PESTEL plus modifiedPorter 5 Forces works well. e.g. the Balanced Scorecard / Strategy Map, with industry-specific KPIs, works well DO NOT use SWOT				30%
	d	4	An appraisal of the limitations of financial models and conventional analysisRemember to include this part. MBA people should be capable of seeing the weaknesses as well as the strengths of conventional “textbook” wisdom and concepts. For example, the traditional “5-forces” model is out-of-date and we will critique and update it.				10%
	e	1 – 4	ConclusionsConclusions must link strongly with the earlier parts of the report and pull together your findings – do not introduce new evidence and thought here – no surprises.     Conclusions will restate the key issues that you have identified and your major findings.				10%
	f	1 – 4	Recommendations must address these key issues and major findings.   You are writing to the CEO and advising on your favoured options for the future in terms of costs, benefits (increased sales, profits etc),   timescale and resource implications for the organisation.    You must model your recommendations in the financial spreadsheet model in part (b); make some assumptions on costs,  sales etc and input these to the model;   discuss and interpret the financial and other outcomes of your recommendations in terms of acceptability, feasibility and suitability.				10%
	g	1 – 4	ModellingModel your recommendations from part (e) quantitatively using a spreadsheet. Your recommendations inform the inputs then you will comment on the outcomes.				15%
	TOTAL						100%
			Overall:

8. Attendance

Attending all your classes is very important and one of the best ways to help you succeed in this module. In accordance with the Student Charter, you are expected to arrive on time and take an active part in all your timetabled classes. If you are unable to attend a class for a valid reason (eg: illness), please contact your Course Leader and/or Module Tutor.

9. Assessment Offences

http://web.anglia.ac.uk/anet/academic/qad/module_guide/modguide_assessmentoffences.php

10. Module Evaluation

http://web.anglia.ac.uk/anet/academic/qad/module_guide/modguide_module_evaluation.php

11. Report on Last Delivery of Module

This form should be completed by module tutors (where there is more than one delivery) and forwarded to Module Leaders who compiles the results on to one form for use at the Courses Management Committee (CMC) and other methods of disseminating feedback to students.
Module Code and Title:
Anglia Ruskin Department:
Location(s) of Delivery:
Academic Year:                                             Semester/Trimester:           
Enrolment Numbers (at each location):
Module Leader:

 

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