Roll-Up Data develops and sells quantum technology solutions for the measurement of underwater sea-life diversity. It has only one product and, last year, RUD sold 10,000 units. This year, RUD reported sales of 16,000 units but net profit was lower than expected.
Write a consultancy report that evaluate company’s performance and financial position for the company’s stakeholders. Prior to the meeting, you have received the following information for the past two years:
|Cost of goods sold||1,440||900|
|Net profit before interest and tax||360||700|
|Interest expense for the year||170||100|
|Debtor payment period||46||44|
|Creditor payment period||51||81|
|Times interest earned||2.1||7|
Your report should identify possible causes for the changes in profitability, liquidity, and financial position. You should also recommend a turnaround strategy to improve the company’s performance and financial position. It is generally accepted that the selling price per unit cannot be increased without a major loss of market share. In addition, reductions in the cost of materials and labour are not possible.
This practical case is designed to give students experience in accessing and finding relevant corporate performance data, and thinking about the objectives of companies. Students should be given leeway to explore performance and develop their ideas around the case study.
- Your assignment should be written in the style of a report to be read by a Board of Directors.
- It should therefore include title and contents pages (not included within the word limit).
- References should use the Harvard system.
- The word limit is 1,500 words, +/- 10%, excluding any appendices and contents pages.
- The deadline for submission is 24th November 2023
- Submission is via Turnitin.
- Penalties will apply for late submission and being more than 10% either side of the word limit.
- The assignment is worth 100% of your course mark.
|Marking Scheme for Report|
|Feature of report||% of total marks|
|Report structure(appropriate presentation, formatting, referencing)||10|
|The company’s financial performance||25|
|Recommendations on improvements||10|
Mapping to Learning Objectives
This coursework maps to learning objective
L1. Critically evaluate why companies place financial management at the core of their business and senior financial managers’ role in maximising firm value.
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