An Introduction to Business

and Management - B100

SUCCEEDING IN YOUR ASSIGNMENT
Block 3: Accounting and Business
Finance

TMA 03 Preparation
TMA 03 - Background Study

• Block 3 Reading 21: Getting Started with Accounting

and Finance

• Block 3 Reading 22: Different Legal Forms of Business

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TMA 03 Core Study 1: Financial
Statements

• Block 3 Reading 23: Financial Statements - The Income

Statement

• Block 3 Reading 24: Financial Statements - The Balance

Sheet

• Block 3 Reading 25: Financial Statements - The Cash

Flow Statement

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TMA 03 Core Study 2: Analysing
Financial Performance
• Block 3 Reading 26: Analysing Financial Performance

 Financial Performance - Investment return and profit

 Financial Health - Working capital (net current assets)

management and risk

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Ratios to Analyse Financial
Performance
Case Study - Pipes & Installations Ltd

Income Statement (IS)

Answer Answer
Ratio and/or Balance Sheet Calculation
YE 2015 YE 2014
(BS)
[(Equity at end of the year –
Return on Equity/
Equity at the beginning of the
Return on Capital Balance Sheet 14.2% -
year) / Equity at the beginning
Employed
of the year] x 100%
Gross (Profit)
Income Statement (Gross Profit / Sales) x 100% 26.1% 28.4%
Margin
Return on
Sales/Operating Income Statement (Operating Profit / Sales) x 100% 12.8% 16.1%
Profit Margin

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Ratios to Analyse Financial
Health
Case Study - Pipes & Installations Ltd
Income Statement
Answer Answer
Ratio (IS) and/or Balance Calculation
YE 2015 YE 2014
Sheet (BS)
The ‘Quick Ratio’ (Current Assets – Inventory)/
Balance Sheet 0.7:1 0.74:1
(or ‘Acid Test’) Current Liabilities
Receivables Collection
IS and BS (Receivables / Sales) x 365 89 days 83 days
Period
Inventory Turnover [(Inventory / (Cost of Goods
IS and BS 81 days 66 days
Period Sold-Wages)] x 365 (*)
Gearing (Long-Term Liabilities /
Balance Sheet 41.5% 56.8%
(or ‘Leverage’) Equity) x 100%

(*) Generally, the Inventory Turnover Period is calculated as follows:

(Inventory /Cost of Goods Sold) x 365
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TMA 03 – Financial
planning
• Improving future Financial Performance & Financial
Health

• Block 3 Reading 27: Financial Planning

 Actions needed to improve profit

 Actions needed to improve financial health

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Main Features of TMA 03
• Must be submitted by 12 noon (UK time) on the deadline date
• Worth 15% of final assessment mark
• Marked out of 100
• Word limit: 1,000 words (excluding numbers and calculations)
• Part 1 (90 marks): Case study analysis
• Part 2 (10 marks): Contribution to two Activity forum discussions
during Block 3 and your responses to two other students’
contributions in each of these discussions.

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Good TMA Preparation Practice
• Start early
• Read the entire TMA requirements
• Make sure you read and understand the tasks and/or
questions
• Make sure you know which module concepts to use
• Make sure you read the case thoroughly before writing down
your answers
• Make a plan and/or write an outline before writing the full
answers
• Stick to the word limit
• Make sure you reference ideas and concepts taken from
module materials, the case study, or other sources
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 TMA 03 - Learning Outcomes
Your tutor will assess how far you meet the learning
outcomes, so do check your finished work against them
• Your knowledge and understanding of key concepts and ideas covered in Block 3
of B100
• Your ability to select information from a case study, and develop arguments
based on that selection
• Your ability to apply theoretical models and concepts to a practical situation as
presented in a case study
• Your ability to develop skills such as interpreting quantitative and qualitative
information
• Your ability to use academic and business and management language
appropriately and effectively to communicate your ideas
• Good academic practice in citing sources of information appropriately
• Your ability to communicate and discuss business and management ideas with
other students through your participation in the TGF (Tutor Group Forum)
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 TMA 03 Part 1 - Detailed
Approach
• Read the case study carefully all the way through in
order to:
– get a feel for the whole case
– make notes that might be applicable to the questions

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TMA 03 Part 1 - Question 1
Briefly explain the general purpose of each of the three financial
statements (the income statement, the balance sheet, and the cash
flow statement) and the usefulness of each of them for the business
case study. (20 marks)

• The three financial statements were introduced in Readings 23-25.

• Use your own words to describe:
The essential characteristics of the statements
The uses of the statements
The usefulness of the statements for the specific business case

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TMA 03 Part 1 – Question 2 (I)
• Analyse the financial statements that have been prepared by
Improve Ltd. In particular, comment on the following aspects of
the company: (55 marks in total)

i. Areas of concern in financial performance, focussing mainly on

information from the income statement. (22 marks)

ii. Areas of concern in financial health, focussing mainly on ratios

dependent on the income statement and the balance sheet.
(23 marks)

iii. Areas of concern in cash flow management, focussing mainly

on information available from the cash flow statement. (10
marks) 13
TMA 03 Part 1 - Question 2 (II)
• Focus only on the financial statements – refer to Readings 23 to 25
• Identify areas of concern in individual figures for each statement
when compared to those of the previous year
• Use Reading 26 and identify relevant ratios for each of the three
statements
• Carry out the relevant calculations and state why the answers you
reach might be of concern to the business case study
• Note the most obvious matters – they are not hidden or very
complex
• Recommended layout is to use a separate heading for:
Income Statement and issues for business case study
Balance Sheet and issues for business case study
Cash Flow Statement and issues for business case study
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 TMA03 Part 1 – Question 3
• Assess the validity of the concerns raised by Uncle Dave in
relation to the business. What practical steps should Susan
and Chris now undertake in order to improve the financial
performance and financial health of the business? (15
marks)
 Respond to the particular issues you have identified in your
analysis in Question 2
 Make some practical suggestions of what should be done
immediately to respond to concerns, and also to improve the
longer term performance of the business
 Use Reading 27 to help address the forward planning aspect of
this answer

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TMA 03 Part 2

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TMA 03 Part 2
• This part of the assignment will be marked out of 10 marks
(the entire TMA is marked out of 100)
• These 10 marks are based on your tutor’s monitoring of your
contributions to the Activity discussions associated with B100
Block 3
• Your tutor will introduce these at the appropriate time. We expect
you to participate in all discussions for Block 3
• The first 5 marks are for making a contribution to two Activity
discussions started by your tutor during Block 3
• The second 5 marks are for making at least one response to a
fellow student’s contribution in each of those two discussions
• If your tutor does not feel you have participated in these
discussions, the 10 marks will be lost
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Next Steps

• For your TMA 03 submission date please see the study

planner

• Please ensure you use the Tutorial Booking system to

arrange your next Face-to-Face event or Online Tutorial

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THANK YOU
&
GOOD LUCK!