FIN4001 Introduction to Finance

Assignment Brief

As part of the formal assessment for the programme you are required to submit an Introduction to Finance assignment. Please refer to your Student Handbook for full details of the programme assessment scheme and general information on preparing and submitting assignments.

Learning Outcomes:

After completing the module, you should be able to:

1. Contrast the appropriateness of the different sources of finance to a business.
2. Explain the implications of finance as a resource within a business.
3. Produce simple financial statements in accordance with accepted principles.
4. Use financial information for decision making purposes.
5. Demonstrate    a    confident    use    of    the    financial    terminology    and    conventions    in communicating results.

Guidance

Your assignment should include: a title page containing your student number, the module name, the submission deadline and the exact word count of your submitted document; the appendices if relevant; and a reference list in AU Harvard system(s). You should address all the elements of the assignment task listed below. Please note that tutors will use the assessment criteria set out below in assessing your work.

You must not include your name in your submission because Arden University operates anonymous marking, which means that markers should not be aware of the identity of the student. However, please do not forget to include your STU number.

Maximum word count: 3,000 words

Please refer to the full word count policy which can be found in the Student Policies section here: Arden University | Regulatory Framework

Please note the following:

Students are required to indicate the exact word count on the title page of the assessment.

The word count includes everything in the main body of the assessment (including in text citations and references). The word count excludes numerical data in tables, figures, diagrams, footnotes, reference list and appendices. ALL other printed words ARE included in the word count.

Please note that exceeding the word count by over 10% will result in a 10-percentage point deduction.

Question 1

Liverton Co.’s income statement for the year ended 31 March 2019 and statements of financial position at 31 March 2019 and 2018 were as follows:

Liverton Co.: Income Statement for the year ended 31 March 2019
		£’000
Sales		3 495
Cost of Sales		(2 182)
Gross profit		1 313
Other income: interest received		33
Distribution costs		(187)
Administrative expenses		(309)
Interest costs		(75)
Profit before tax		775
Income tax expense		(157)
Profit for the year		618
Liverton Co: Statements of Financial Position as at 31 March 2019 and 2018
	2019	2018
	£’000	£’000
Non-current assets
Property, plant and equipment (PPE)	1 700	1 615
Intangible assets	425	375
Investments	0	95
Current assets
Inventory	150	102
Trade receivables	1 010	315
Short-term investments	75	0
Cash at Bank	452	1
Total Assets	3 812	2503
Current liabilities
Trade payables	289	119
Bank overdraft	143	98
Taxation	312	285
	744	502
Non-current liabilities
Long-term loans	170	50
Total Net Assets	2898	1951
Equity
Share capital (£1 ordinary shares)	1950	1550

Share premium account	260	150
Revaluation surplus	70	51
Retained earnings	618	200
Total Equity	2 898	1 951