Chat with us, powered by LiveChat

Using the financial statements of SKANSKA PLC calculate the ratios required and comment on the company’s performance from an Investor with £1 million perspective.

Description

SKANSKA PLC is a Construction Company based in UK. SKANSKA PLC started back in 1984. The company is planning to expand its operations to other countries in Europe in the next ten (10) years. The financial statements of SKANSKA PLC. are attached for your consideration and attention.

You are advised to incorporate the suggested amendments/feedback you received from the module leader during assignment briefing.

Required

TASK 1(1500 WORDS)

You are part of the Accounting and Finance team at SKANSKA PLC. Write a report to the Management of SKANSKA PLC, critically evaluating the importance of Accounting and Finance functions, duties and roles within SKANSKA PLC. Your evaluation must include some examples within the Company where appropriate.

(50 marks)

TASK 2(1500 WORDS)

Using the financial statements of SKANSKA PLC calculate the ratios required and comment on the company’s performance from an Investor with £1 million perspective.

(40 marks)

Marks will be awarded for Structure and Presentation skills. Structure includes the orderly presentation of relevant material. In addition, the extent of research evidenced by the appropriateness and adequacy of in-text referencing. There must be a Cover Page and Contents Page, paragraphs of Introduction, Conclusion and pages must be numbered.

(10 marks)

Assessment Criteria

You will obtain marks for the following:

Presentation of your work (report format, clarity of expression, referencing etc.)10%

The functions/roles/duties of accounting and finance team within SKANSKA PLC with appropriate examples. 40%

Ratio calculation10%

Interpretation and analysis of the Ratios in relation to SKANSKA PLC performance40%

TOTAL MARKS 100%

The summarised financial statements of SKANSKA PLC, a Public company engaged in Construction, are shown below:

Statement of profit and loss:

For the year ended 31 Dec. 2018 For the year ended 31 Dec. 2019

£000 £000 £000 £000

Sales revenue 4,800 6,000

Cost of sales

Opening inventory 1,200 450

Purchases 2,700 4,800

3,900 5,250

Less: Closing inventory (450) (3,450) (900) (4,350)

Gross profit 1,350 1,650

Operating expenses (600) (675)

Finance cost (150) (300)

Net profit 600 675

Statement of financial position As at year to 31 Dec. 2018 As at year to 31 Dec. 2019

£000 £000 £000 £000

Non-current assets 2,955 6,000

Current assets

Inventory 450 750

Receivables – trade 900 1200

Prepayments 90 105

Cash 75 1,515 15 2,070

4,470 8,070

Issued share capital 900 900

Share premium account 300 300

Retained earnings 1,125 1,650

2,325 2,850

Non-current liabilities

10% loan notes 1,500 3,000

Current liabilities

Payables – trade 570 2,100

Accruals 75 645 120 2,220

4,470 8,070