State with reasons which of the two companies faces lower risk for their long-term funding policy

Cash Flows in Business Organizations
Project description
Task 1 (Total 14 marks)

Using your text book, other books, journals and/or internet resources explain to a concerned business owner why the Net Profit generated from operations by the business may not be equal to the Cash Generated by Operations over the same period. Use a hypothetical example (in a Cash Flow Statement format) to support your explanation. In your example you may assume any figures for the entries required. (14 marks)

Task 2 (Total 6 marks)

IAS (International Accounting Standard) 7 Statement of Cash Flows recommends the œdirect and œindirect methods of presenting the Operating Cash Flow section of Cash Flows Statement. Explain, with examples, the difference between the two methods, including the layout of each. (Note: Numerical data is not required) (6 marks) Task 3 (Total 60 marks)

You are required to choose two Public Limited Companies in the same sector or industry and carry out the following tasks based on their recent Cash Flow Statements published in their Annual Reports:

a. Compare and contrast, over two consecutive operating periods, the respective net cash flows from Operating Activities of the two companies. (16 marks)

b. Explain how each company has managed its working capital over the two accounting periods? (18 marks)

c. Analyse and explain the Financing Activities of each company in the two consecutive operating periods. State with reasons which of the two companies faces lower risk for their long-term funding policy in the most recent year. (14 marks)

d. Review the Investment Activities of the two companies in two consecutive operating periods and state with reasons which of the two you consider having a more prudent investment policy in the most recent financial year?

(12 marks)

Task 4 (Total 10 marks)

Comment on the overall strategy being observed by the two companies based on their cash inflows and outflows over the two consecutive periods you have analysed in previous tasks. As part of your answer, consider which of the two companies is able to manage its cash flow better. Give reasons in support of your views.

(10 marks)


Referencing (Harvard Style) and: (5 marks)

* References (Harvard System) and Bibliography: 5 marks

* Language, Scholarship, and Presentation: 5 marks

You can find companies Annual Reports from several sources such as libraries and Companys House. An online source where Annual Reports can be downloaded quickly is (search under Annual Reports and look on the right hand side of the screen for œAnnual Report Service), or from the companies own websites, usually found under Investors relation.


* The assignment is a report, and should be written in a report format that includes all the tasks.

* The assignment should be between 900 and 1,300 words (Excess writing will be disregarded).

* Assignment must be typed in Arial, font size 12 with double line spacing.

* Pages should be stapled together (top left hand corner).

* All workings, extract of the annual report (statement of cash flow etc.) must be included in the appendix.

* The report contributes 20% of your final grade.

* The FINAL version of the report MUST be handed in at INTO reception and a signature obtained for its submission by 15.00 on Thursday 27th February 2014.

* The coursework must also be submitted through Turnitin. The Turnitin Originality Report must be attached to the submitted hardcopy

* Any student who fails to hand in the work by this time will lose marks. (See below).

* You will also need to KEEP an electronic copy of your essay.

What to include:

The report should include a cover page with your English and/or native name, the title of the essay and the date that you hand it in.

The Report Structure Must Include:

* Table of Contents with page numbers

* Introduction “ a short introduction to give a brief overview of your report

* Main Body of Report “ Includes analysis and evaluation of each of the tasks. So you could structure your report into sections which will contain an analysis and evaluation (with relevant examples) of each of the tasks.

* Conclusion (your final evaluation that flows from your work)

* References and Bibliography “ The report must be fully referenced using the Harvard System of Referencing taught in your English classes. Students who failed to adequately reference their reports will have their work referred to our plagiarism officers. Severe penalties will be imposed for any incidence of academic misconduct with dire consequences for your ability to pass this module and progress to university. (Please see below)

* Appendix “ Excerpts of Annual reports and other financial statements must be included in the appendix to your report. We will not mark any reports without the cash flow statements you have used as we will have no way of verifying the figures used for your calculations and analysis.

Details for late submission of assignment:

Assignment handed in before 15.00 hours on Thursday 27th February 2014 “ NO Penalty.

Time report submitted Mark Deducted

On The Due Date After 1500 Hours But Before 1700 Hours


On The Day Following The Due Date Up To 1700 Hours 10%

On Either The 2nd Or 3rd Day After The Due Date Up To 1700 Hours


On The 4th Day After The Due Date Or Later All marks deducted

Drop Box Submissions

Coursework should be submitted at the Drop Box near the Welcome Desk. You will need to fill in the relevant coursework coversheet at the Drop Box, where it will be time and date stamped. Students will be penalised if they pre-date submission sheets and will be asked to attend a disciplinary meeting with the Programme Management Team

All coursework should be printed on A4 paper, on one side of the page only, page-numbered, and double-spaced with wide margins to allow for marking and comments unless instructed otherwise by the tutor. Students are encouraged to submit coursework in advance when possible.


Approximately 250 words