Acct11059 Accounting, Learning & Online Communication Assignment Stage 2

ACCT11059 ACCOUNTING, LEARNING & ONLINE COMMUNICATION ASSIGNMENT STAGE 2 (ASS#2): RESTATED FINANCIAL STATEMENTS & RATIOS DUE: 11.00am Monday (Week 13 – Review Week) Step 1: to be completed by 11.00am Monday (Week 6) Step 2: to be completed by 11.00am Monday (Week 8) Steps 3 & 4: to be completed by 11.00am Monday (Week 9) Step 5: to be completed by 11.00am Monday (Week 10) Step 6: to be completed by 11.00am Monday (Week 11) Steps 7, 8, 9 & 10: to be completed by 11.00am Monday (Week 13) Please submit your Step 1 in Moodle in the ASS#2 Step 1 section. Please submit your Step 2 in Moodle in the ASS#2 Step 2 section. Please submit your Steps 3 & 4 in Moodle in the ASS#2 Steps 3 & 4 section. Please submit your Step 5 in Moodle in the ASS#2 Step 5 section. Please submit your Step 6 in Moodle in the ASS#2 Step 6 section. Please submit your Steps 7, 8, 9 & 10 in Moodle in the ASS#2 Steps 7-10 section. Estimated (max.) time required: 37 – 43 hours This assignment is the second stage of your major assignment for this unit. It is made up of ten steps. Step 1: Due 11.00am Monday (Week 6) (5 marks) Step 1 involves you writing down some of your ideas, reflections and reactions to reading Chapter 4 ‘Analysing Financial Statements’ in the Study Guide. Read Chapter 4 (‘Analysing Financial Statements’) in the Study Guide. Read it like you would a novel or any book, actively seeking to engage with the author and to understand what you are reading. What is the author trying to say? Let the author take you on a journey: go with him and see what you think of some of the key ideas and concepts being discussed. And while you do this, note down key concepts that occur to you. That’s right; just write them down as you go along. Also, include any questions that occur to you as you are reading. What do you find confusing, difficult to understand or believe, boring, exciting or surprising? Include some of your key concepts and questions (KCQs) in a Word document. Your personal engagement with the reading is what I am interested in. I am interested in your reactions, developing understanding, and questions from the readings. Use the words “I” and “me”. Different people will have different reactions to the readings. Tell me what your reactions are. This is what I am interested in. Do not tell me what you think I might want to hear. Be genuine and honest in your reactions to the readings. Give me something of yourself in your Step 1. Please submit your Step 1 as a Word document. Please allow 2 – 2½ hours to complete Step 1 (if you have English as your second language, you may need to increase this time). Step 2: Due 11.00am Monday 1 May (Week 8) (5 marks) Step 2 involves you writing down some of your ideas, reflections and reactions to reading Chapter 6 ‘Understanding Key Cost Relationships’ in the Study Guide. Read Chapter 6 (‘Understanding Key Cost Relationships’) in the Study Guide. Read it like you would a novel or any book, actively seeking to engage with the author and to understand what you are reading. What is the author trying to say? Let the author take you on a journey: go with him and see what you think of some of the key ideas and concepts being discussed. And while you do this, note down key concepts that occur to you. That’s right; just write them down as you go along. Also, include any questions that occur to you as you are reading. What do you find confusing, difficult to understand or believe, boring, exciting or surprising? Include some of your key concepts and questions (KCQs) in a Word document. Your personal engagement with the reading is what I am interested in. Please submit your Step 2 as a Word document. Please allow 2 – 2½ hours to complete Step 2 (if you have English as your second language, you may need to increase this time). Step 3: Due 11.00am Monday (Week 9) (18 marks) Step 3 involves you restating your firm’s financial statements. Go to the ‘Restated Financial Statements’ tab in your firm’s spreadsheet. This is where you will input your firm’s restated financial statements, once you have prepared them. You will need to make sure you restate your firm’s financial statements for the most recent four (4) years. Restating your firm’s financial statements simply involves you reorganising the way your firm’s financial statements are set out. ‘Restating’ financial statements can sometimes refer to adjusting a firm’s financial statements after balance date to allow for changes that occur after balance date (such as a change in the way some items are accounted for). We are not talking about this type of ‘restating’ a firm’s financial statements. Our task of restating our firm’s financial statements involves moving around different items in a firm’s financial statements; and to do this we will need to understand what each item is. This is the purpose for us in doing this: to help us look carefully at each item in our firm’s financial statements and to develop some initial understanding about what each item means to us. Restate your firm’s financial statements based on material covered in Chapter 4 (Sections 4.2 & 4.3) in the Study Guide. You may see items in your firm’s financial statements such as non-controlling interests; investments in associates; futures, options, hedges or derivatives; deferred tax; or movements in foreign currency translation reserves. You may wonder what these are and whether they relate to your firm’s operating or financial activities. I encourage you to discuss with other students any issues you (and they) may face in restating your firm’s financial statements. Also, participate in the discussion forums with others in the course and comment on each other’s blogs. Post on your blog your comments and responses to restating your firm’s financial statements. How did you find this learning task? Did you find it frustrating, confusing or enlightening? And what exactly do you feel you have learnt, or not learnt, about your firm and its financial statements from restating its financial statements? Restating the financial statements of a firm can be quite time consuming and, at times, a little frustrating, especially when you do it for the first time. Indeed, you may feel this may be quite an understatement when you are in the middle of restating your firm’s financial statements. However, ‘all’ you will be doing when restating your firm’s financial statements will be moving around the various items in your firm’s financial statements, for example moving your firm’s assets from current assets and non-current assets to operating assets and financial assets. Still all the same items; just thoughtfully put under different headings. Restating your firm’s financial statements will support you to look at each item in your firm’s financial statements. Most people usually find it to be an interesting and challenging learning task. Remember that you can access the Exemplars of previous assessments. Please note: some aspects of the assessments have changed since previous terms, so do not copy the exemplars. You should also access the video lectures since these support completion of most aspects of the assessment. Include in your assignment (as a Word document) a brief commentary on any issues or concerns you had in restating your firm’s financial statements and the results of your discussions with other students. Also, submit your firm’s spreadsheet with your restated financial statements included. Please allow about 12 – 13 hours to complete Step 3. Step 4: Due 11.00am Monday (Week 9) (3 marks) Step 4 involves you providing (and receiving) feedback to three other students in our unit on their draft ASS#2 Step 3. If you wish, these can be the same students you provided feedback to in ASS#1. The main benefit of Step 4 is in giving quality and thoughtful feedback to others in our subject. The process of thinking about the feedback you give to others in will help you greatly with your own assignment as you think about what the assignment requires and how others have addressed these requirements for their own companies. Prior to 5.00pm Friday (Week 7), please: • post draft work of your ASS#2 Step 3 on your blog; and • provide a link to your blog on the Draft ASS#2 Step 4 Feedback forum and post in the Draft ASS#2 Feedback forum a comment that your draft ASS#2 Step 3 is ready for student feedback and, if you wish, specific areas where you would particularly value feedback. Prior to 5.00pm Thursday (Week 8), please ensure you have provided quality feedback to the three students you have been asked to give feedback to. Please use the Peer Review Feedback Sheet ASS#2 Step 4 (see below). Include the feedback you have given to the three students in the unit in your Step 4. Also, include and/or comment on feedback others may have given you on your draft work. Also, comment in your Step 4 whether you found feedback from other students useful and why this was, or was not, the case. You can include in your discussion both how useful (or not) you found feedback you received from other students through your interactions with them f2f, on discussion forums, on our blogs and through other means. Please submit your Step 4 as a Word document. Please allow 2 – 2½ hours to complete Step 4. Step 5: Due 11.00am Monday (Week 10) (5 marks) Step 5 involves you writing down some of your ideas, reflections and reactions to reading Chapter 7 ‘Budget for the Short Term’ in the Study Guide. Read Chapter 7 (‘Budget for the Short Term’) in the Study Guide. Read it like you would a novel or any book, actively seeking to engage with the author and to understand what you are reading. What is the author trying to say? Let the author take you on a journey: go with him and see what you think of some of the key ideas and concepts being discussed. And while you do this, note down key concepts that occur to you. That’s right; just write them down as you go along. Also, include any questions that occur to you as you are reading. What do you find confusing, difficult to understand or believe, boring, exciting or surprising? Then include some of your key concepts and questions (KCQs) in your Step 5. Please submit your Step 5 as a Word document. Please allow 2 – 2 ½ hours to complete Step 5 (if you have English as your second language, you may need to increase this time). Step 6: Due 11.00am Monday (Week 11) (5 marks) Step 6 involves you writing down some of your ideas, reflections and reactions to reading Chapter 8 ‘We Have Got to Make Some Decisions’ in the Study Guide. Read Chapter 8 (‘We Have Got to Make Some Decisions’) in the Study Guide. Read it like you would a novel or any book, actively seeking to engage with the author and to understand what you are reading. What is the author trying to say? Let the author take you on a journey: go with him and see what you think of some of the key ideas and concepts being discussed. And while you do this, note down key concepts that occur to you. That’s right; just write them down as you go along. Also, include any questions that occur to you as you are reading. What do you find confusing, difficult to understand or believe, boring, exciting or surprising? Then include some of your key concepts and questions (KCQs) in your Step 6. Please submit your Step 6 as a Word document. Please allow 2 – 2½ hours to complete Step 6 (if you have English as your second language, you may need to increase this time). Step 7: (4 marks) Step 7 involves you identifying three products or services of your firm and estimating/guessing their selling price and variable cost. You will also comment on the contribution margins you calculate as well as identify constraints and briefly comment on them. Remember, do not spend too long on Step 7 (it is worth just 4 marks). If you have trouble easily identifying three specific products or services of your firm, then quickly make some assumptions about what specific products/services your firm might have. You will also likely need to guess the selling price and variable cost of each product/service. Try to make your assumptions reasonably realistic. Identify three products or services of your firm. For each product or service of your firm, estimate (or guess) their selling price and variable cost and then calculate their contribution margin. See Section 6.4 in Chapter 6 of the Study Guide for guidance on what are variable costs and contribution margins. You might also like to see Section 8.2 in Chapter 8 of the Study Guide. Discuss why the contribution margins for each of your firm’s three products/services might differ or be similar. Why might your firm produce a range of products/services with different contribution margins? Why not only produce the product/service with the highest contribution margin? Many companies can face constraints on their capacity to produce products or services. For example, for Ryman Healthcare one constraint might include being able to find and purchase suitable sites for new retirement villages. As most people who go into retirement villages go into villages within 10 kilometres of their previous home, Ryman Healthcare needs to find large, level sites for retirement villages in suburban areas where there are a significant number of older people. Identify (or guess) one or more resource constraints your firm may face, and perhaps any market constraints you feel may impinge on your firm. In what ways might these constraints be relevant when deciding whether (and how much) of the three products or services of your firm that you have identified, your firm should produce and sell? Please submit your Step 7 as a Word document. Please allow 2 – 2½ hours to complete Step 7. Step 8: (17 marks) Step 8 involves you calculating some ratios for your firm (and its economic profit) and assessing its business performance. Ratio Analysis Go to the ‘Ratios’ tab in your firm’s spreadsheet. In this worksheet is a list of ratios. Please calculate these ratios for your firm. Calculate these ratios for the last four (4) years for your firm. Do this by linking back to the numbers in your firm’s financial statements (in your ‘Financial Statements’ worksheet) or to the numbers in your firm’s restated financial statements (in your ‘Restated Financial Statements’ worksheet). If you are unsure about how to link cells between worksheets in Excel, see this short video: Linking Data from Different Excel Sheets and Workbooks You can also discuss with others in the unit about how to do this; everyone will be facing the same issue. Once you have calculated these ratios for your firm sit back and have a look at them. What do these ratios tell you (or not tell you) about your firm? How do you make sense of them? Discuss your ratios with other students. How do your firm’s ratios differ to the ratios of firms of other students? What do your firm’s ratios tell you about how well your firm is performing? In your blog, include your reflections on your firm’s ratios: what they tell you (or do not tell you) about the performance of your firm, how they compare to the ratios of other firms and what new questions the ratios might raise in your mind about your firm. Economic profit Calculate economic profit for your firm for the past four (4) years. Use 10% as your firm’s cost of capital when calculating your firm’s economic profit (unless you have reasons to use a different number; if so, clearly state those reasons). The key drivers of your firm’s past economic profit are Return on Net Operating Assets (RNOA), cost of capital and Net Operating Assets (NOA). The two key accounting drivers of RNOA are Profit Margin (PM) and Asset Turnover (ATO). (See Study Guide Chap 4, Section 4.4). Comment on what is driving or causing your firm’s economic profit over the past four years to be at the levels it is. If your firm’s economic profit is negative (or positive), what is causing it to be negative (or positive)? If it is a large number, what is causing it to be so large? If it is a small number, what is causing it to be so small? If it changed a lot over the past three or four years, why did it? If it stayed much the same over the past three or four years, why was this? Discuss your thoughts on what is driving your firm’s economic profit with other students. What similarities or differences are there between the economic profit of your different firms? Why is this? What is causing these similarities or differences? What insights have you gained by ‘breaking into bits’ your firm’s financial statements? What insights have you not gained? In your blog, include your reflections about your firm’s economic profit. Include in your assignment your firm’s spreadsheet, including your firm’s ratios and economic profit that you have calculated, as well as a Word document setting out your commentary on your firm’s ratios and what is driving your firm’s economic profit. Please allow about 9 – 10 hours to complete Step 8. Step 9: (5 marks) Step 9 involves you developing a capital investment decision for your firm and completing a simple analysis of this decision using Payback Period, NPV and IRR. Develop a capital investment decision for your firm. This decision should involve a choice between two options and involve you discounting cash flows for between 5 and 10 years. Please use a required cost of capital of 10% (Tip: This is the discount rate to use). Calculate the payback period, net present value (NPV) and internal rate of return (IRR) for each of the two options for your firm that you developed and advise your company which option it should invest capital in. Please go to the ‘NPV & IRR’ worksheet and calculate the NPV and IRR for each of the two capital investment options for your firm in this worksheet, using the NPV and IRR functions in Excel. See this short video for guidance about how to calculate NPV and IRR using Excel (control + click on this link): Calculating IRR (Internal Rate of Return) and NPV (Net Present Value) using Excel Briefly discuss your thought processes in coming to your recommendation. Also, briefly discuss the strengths and weaknesses of your analysis. For example, Martin has developed a capital investment decision for Ryman Healthcare. This is shown in the Appendix to this assignment (on the Moodle page). This is by way of example only. Please do not use this example in your answer to Step 9. You need to develop your own capital investment decision for your firm. Please allow about 2 – 2½ hours to complete Step 9. Step 10: (3 marks) Step 10 involves you providing (and receiving) feedback to three other students in our unit on their draft ASS#2 Steps 7-10. If you wish, these can be the same students you provided feedback to previously. The main benefit of Step 10 is in giving quality and thoughtful feedback to others in our unit. The process of thinking about the feedback you give to others will help you greatly with your own assignment as you think about what the assignment requires and how others have addressed these requirements for their own companies. Prior to 5.00pm Friday (Week 11), please: • post draft work of your ASS#2 Steps 7-9 on your blog; and • provide a link to your blog on the Draft ASS#2 Steps 7-10 Feedback forum and post in the Draft ASS#2 Steps 7-10 Feedback forum a comment that your draft ASS#2 Steps 7-10 is ready for student feedback and, if you wish, specific areas where you would particularly value feedback. Prior to 5.00pm Thursday (Week 12), please ensure you have provided quality feedback to at least three other students, using the Peer Feedback Sheets for ASS#2 Steps 7-10 (see below). Include the feedback you have given to at least three other students in your Step 10. Also, include and/or comment on feedback others may have given you on your draft work. Comment in your Step 10 whether you found feedback from other students useful and why this was the case. You can include in your discussion both how useful (or not) you found feedback you received from the other three students asked to provide you with feedback and any feedback you may have received from other students in the subject through your interactions with them f2f, on discussion forums, on our blogs and through other means. Please allow about 2 – 2½ hours to complete Step 10. Please submit your Steps 7-10 as a Word document and as an Excel spreadsheet. Note: Late penalties for all steps in ASS#2 (including Steps 1-6) will be calculated based on the due date for ASS#2 of 11.00am Monday (Week 13).