案例资料(完整版).doc

Assessment task 3 Outcome(s) covered 3, 4 and 5 Assessment task instructions Read the case study and answer the questions that follow. Following the successful launch the cycling shorts, Elite plc has decided to embark on a major expansion and launch a complete range of cycle wear. This is due not only to the successful trial period but sales of running wear have fallen throughout the year. This is down to the popularity of cycling increasing with many runners changing their preferred sport. This expansion will double the number of products that the company produce and sell and will require major investment in buildings, plant and machinery, materials and workforce. The buildings will cost around £1,000,000 and have an expected life of 50 years; the plant and machinery will cost £100,000 and have an expected life of 10 years. In order to fund the expansion extra financing will be required by Elite plc, however the Finance Director is overseas on business and is unable to provide the Board with the financial information they require other than the profit and loss, balance sheet and cash flow statements for the years’ ended 31 July 2011 and 2012, which she has supplied to you (Appendix 1). At a recent Board meeting the situation was discussed in order to find suitable financing for this expansion, the Managing Director is keen to obtain the most suitable source of finance as he believes that it will have an impact on the accounts. The Sales Director suggested that they should consult shareholders on this matter because, other than the Board, they are the only other interested party and users of the accounts published by Elite plc. Due to the absence of the Finance Director the Board was unable to find out what sources of finance were currently being used by Elite plc. The Managing Director for the Board has asked for your advice addressing their concerns and some other questions he has. You are expected to examine the financial statements in detail and carry out three tasks to produce a report. Your report should be well structured, with an introduction, and three sections addressing each of the three tasks set out below. You should also include appropriate conclusions/recommendations and should refer to the financial information and your findings throughout. Task A Addressing the comments of the Sales Director, identify four relevant users of the financial information contained within the accounts, describe the information they will require, the purpose for which they require the information and identify which statement(s) contain the information they require. Task B In order to assist the Board in identifying the sources of finance currently used by Elite plc: 1 Examine the company’s balance sheet and identify the sources of finance currently used by Elite plc. 2 Categorise the sources of finance into short, medium and long term. Task C In order to assist in sourcing the finance, you should review the financial statements and provide relevant information that will be useful to the providers of finance so that the Board will have the correct information to hand. Your review should include: 1 An identification the major inflows and outflows of cash over the previous 12 months. 2 An analysis of the company’s recent financial performance and position. This analysis should include at least six key accounting ratios that will be useful to the providers of finance and should cover the areas of: profitability, liquidity, efficiency and capital structure. 3 Recommended actions that could be taken to improve the company’s performances and finances, based on your analysis. 4 Recommendations of suitable financing options for the required investments(s) to accommodate the expansion. 。