GSB003_Assessment 1_Guide PAGE 1 MANAGING FINANCIAL RESOURCES Assessment Task 1: Additional Guidance This document is provides additional guidance to assist students as they undertake MFR Assessment...

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GSB003_Assessment 1_Guide PAGE 1 MANAGING FINANCIAL RESOURCES Assessment Task 1: Additional Guidance This document is provides additional guidance to assist students as they undertake MFR Assessment Task 1. Note that the requirements for Assessment Task 1 are set out in the Unit Guide, and the information in this document is only intended to be supplementary to that. Assessment Purpose The underlying learning objective that we are seeking students to demonstrate is that you can read, understand, interpret and analyse the information contained in the General Purpose Financial Statements (GPFS) and in the associated notes of a chosen organisation, in order to make informed conclusions about its financial position and financial performance. Students are expected to be able to demonstrate proficiency in interpreting the key items on the Balance Sheet, Income Statement and Cash Flow Statement. You should be able to relate the financial information on these statement (and in any supporting notes) to the actual operational dynamics of the organisation. Thus, show application and interpretation. Draw meaning from the financial statements by providing a discussion and evaluation of the financial performance and position of the chosen organisation. Financial analysis You will notice that the name of the Task is Financial Statement Analysis. Thus, analysis is essential. Students are expected to use the financial analysis techniques referred to in Topics 3 and 4, and specifically must include some ratio analysis. You may choose to use the other analysis methods, such as vertical, horizontal or trend. Your choice should be driven by what will be useful in the analysis and in conveying your arguments. Analysis involves drawing meaning from the results and goes beyond stating what the results are or how they have changed. Some further tips in relation to analysis: • In your assessment, we would expect coverage of the main financial dimensions (per topic 3 and topic 4), but focus on those most relevant to the organisation. Your informed consideration of what you consider to be most relevant is also important as it demonstrates understanding of the financial dynamics of the organisation. • Provide ratios (and possibly also trend, vertical or horizontal analysis) as evidence of the organisation’s performance in the financial dimensions. • Provide theory/concept explanation to show that you know what information the financial ratios provide and what financial issues they illustrate. GSB003_Assessment 1_Guide PAGE 2 • Provide discussion of what the calculated ratio indicates (ie what it tells us about this specific organisation). You may choose to do a comparison to peers, benchmarks, previous results, competitors. • It is suggested that you would most likely need a comparitive analysis to the previous year, although some students may choose to do a trend analysis going back several years on specific figures. Again this will be driven by the points that you are making and issues you are examining. • Consider implications, linkages and what the ratio conveys about the organisation financially. Thus, think about what financial story the financial reports tell about operations and decisions, and how that picture relates to the context, strategy and operational dynamics of the organisation. As you investigate, consider aspects such as why the results are as they are, ie. what factors have driven the results or what are the implications associated with the results. Background research Note that in order to make sense of the financial results, it is helpful to have an understanding of the organisation and its context, including the industry and market dynamics, major activities, decisions and operational and strategic issues. Thus, research these to provide the background/ context for the analysis. Note that this research is background and is intended to help explain and inform the analysis. However, on its own it does not constitute analysis. Its relevance applies only insofar as it helps explain the results. This may mean that quite a lot of your background research may not end up in your final submission – only include the content that helps position, justify or explain the results. Developing academic argument Arguments are essentially the key points that you wish to make. They reflect key themes identified in the research and associated analysis. We expect that your paper is structured / organised along these key themes. Themes usually only emerge after you have done some initial research. Thus, after doing research and some of the ratio calculations, stop and reflect on what you have found. Identify the important financial themes/issues that are apparent. These become your arguments. Build your paper around these arguments. This may then require further research as you dig deeper to provide information and analysis to support these arguments. Arguments lead to and support conclusions and or recommendations. Arguments must be supported by evidence (theory plus findings). Thus, for each argument, identify the related theory content and also identify how this is reflected in the financial figures/ results/ ratios. Examples: • It could be that you have identified a strategy of expansion. This is evidenced in the increase in liabilities (funding), an increase in non current asset aquisitions (capex), but also in reduced Return on asset ratio (due to the expanded asset base). In this case you could describe how all these different financial aspects have resulted from an expansion strategy. • Another example could be an industry downturn – reflected in decreasing revenues and falling profits. This is evidenced in a freeze on Capex (no asset purchases), and increase in liabilities if a loan has been taken out (reflected in a higher Debt ratio). Conclusions GSB003_Assessment 1_Guide PAGE 3 Conclusions are not a summary of the paper. They are judgements, decisions or insights reached by reasoning and supported by evidence. Conclusions must be drawn from the key arguments and analysis. Every conclusion must be clearly traceable to the supporting arguments and its associated evidence. Conclusions must be specific - not generic ‘motherhood ‘ type statements. Presentation, format and style This assessment is required to be submitted in a Report format. Please ensure you are confident on what a Report entails - and its major sections. Refer to the Communication Skills Handbook and Academic skills materials for information. Note that a Report format is not just a case of inserting report headings. The content under each heading must provide the content required of that section. As examples, the Executive Summary is NOT an introduction, nor a methodology section. Similarly, the Introduction section should provide an introduction to the report – not an overview, nor analysis or findings. The style in a report is objective and neutral. Avoid emotive language and bias and write in third person language. A report is not a learning journal – it is focused on what you have found and explains those results – it does not explain the process you followed or your ‘learning journey’. It must lead to conclusions. Cover sheets are not required. For further information, please speak with your facilitator.