Discuss a possible position for the company’s accounting system within one of the major classifications that you have examined, giving your reasons.

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Select a non-UK, non US company and obtain its latest annual financial reporting documents (2019 or 2018).

(a) (i) Discuss a possible position for the company’s accounting system within one of the major classifications that you have examined, giving your reasons. (30 marks)
(ii) Discuss the nature of your findings and their implications for impression management. (10 marks)

(b) Discuss the external influences on the company’s financial reporting
(30 marks)

(c) Discuss a possible position for the company’s accounting system within one of the major classifications that you have examined, giving your reasons. (30 marks)

Refer to relevant regulation and research.

Describe the circumstances of the following case study and recommend a course of action. Explain your approach to the problem, perform relevant calculations and analysis, and formulate a recommendation.

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Unit #5 – Reading

  1. Heisinger, K., & Hoyle, J. B. (n.d.). Accounting for Managers. Retrieved from https://2012books.lardbucket.org/books/accounting-for-managers/index.html
  • Chapter 9 – How Are Operational Budgets Created?
  • Chapter 10 – How Do Managers Evaluate Performance Using Cost Variance Analysis?

This text explains the budgeting process and how managers use budgets to evaluate performance. It describes flexible budgets and introduces standard costs, which are used to calculate budget variances. Illustrations using applied examples are also provided.

Optional Video

  1. Chegg. (2016, April 5). Static and Flexible Budgets[Video File].

Assignment – Case Study Unit #5

Submit a paper which is 2 pages in length (no more than 3-pages), exclusive of the reference page. Paper should be double spaced in Times New Roman (or its equivalent) font which is no greater than 12 points in size. The paper should cite at least three sources in APA format.  One source can be your textbook.

Describe the circumstances of the following case study and recommend a course of action. Explain your approach to the problem, perform relevant calculations and analysis, and formulate a recommendation. Ensure your work and recommendation are thoroughly supported.

Case Study:

Papaya Partners is a distributor of papayas. They purchase papayas from individual growers and package them in 10-pound cartons for delivery to their various customers, generally supermarkets. Last month, they budgeted to sell $500,000 worth of cartons at a price of $25 each. Actual sales met a budget of $500,000 at $25 per carton.

Management has received cost information based on actual performance and needs to understand the drivers of the overall variance from the budget. They have asked you, as an analyst in their management accounting department, to calculate and explain the variances. The following data has been provided:

Budget
Cost of fruit @ 10 pounds per carton    $      200,000
Cost of packaging @ 1 pound per carton    $        10,000
Labor costs @ .5 hours per carton    $        90,000
Total Cost    $      300,000
   
Actual 
Cost of fruit @ 10 pounds per carton    $      244,200
Cost of packaging @ .55 pound per carton    $        11,000
Labor costs @ .75 hours per carton    $      150,000
Total Cost    $      405,200
   
Unfavorable variance    $105,200.00

 

Specifically, management needs to know the:

  • Standard cost per unit (carton)
  • Actual cost per unit
  • Direct materials price variances
  • Direct materials usage variances
  • Direct labor rate variance
  • Direct labor efficiency variance

In addition, they would like to understand how the variances are calculated and what caused them. They would also like a recommendation on what might be done to improve the variances.

For this assignment, compute all required amounts and explain how the computations were performed. Describe whom you would work with to determine the causes of the variances and hypothesize on what caused the variances. Based on your analysis, recommend actions that management could take to improve the variances.

Superior papers will:

  • Perform all calculations correctly.
  • Articulate how the calculations were performed.
  • Assess the variances computed and evaluate the operational results (i.e., is performance better or worse than budgeted?).
  • Explain with whom you would work to identify the root causes of the variances.
  • Propose well-thought-out causes for each variance.
  • Conclude on which variances require management’s attention and recommend courses of action.

Assignment will be grade on each of the following:

  • Provides correct values for computations. 30%
  • Articulates the approach to solving the problem and how the calculations were performed. All formulas are correct for the 6 variances. 20%
  • Assesses the variances computed and evaluates the operational results as having favorable or unfavorable variances. Explains with whom one would work to identify the root causes of the variances. 15%
  • Proposes well- thought-out causes for each variance. Concludes on which variances require management’s attention and recommend courses of action. 15%
  • Writing Clarity and Quality 10%
  • APA Formatting 10%

 

Compute the projected sales, cost of products sold, gross profit, and gross margin (gross profit as a percentage of sales) of each firm for Year +1 through Year +5.

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For this practice activity, we will use the End of Chapter exercise from pp. 703–704: “10.11 Identifying the Cost Structure and Projecting Gross Margins for Capital-Intensive, Cyclical Businesses.” This includes the AK Steel case study. After reading the case study, answer questions A–D below. Refer to the textbook and other course materials to support your responses.

  1. Cost Structure: Compute the cost structure for each firm. You will need to calculate three variables for both companies:
  2. Variable Cost per Dollar of Sales = Change in Cost of Products Sold / Change in Sales:
  3. Total Variable Cost = Variable Cost per Dollar of Sales * Sales:
  4. Total Fixed Cost = Total Cost of Product Sold – Total Variable Cost:
  5. Structure of Manufacturing Cost: In one paragraph, compare the structure of manufacturing costs for each firm:
  6. Projected Financial Information: Compute the projected sales, cost of products sold, gross profit, and gross margin (gross profit as a percentage of sales) of each firm for Year +1 through Year +5. Using the table below or a similar spreadsheet is recommended.
AK Steel Year +1 Year +2 Year +3 Year +4 Year +5
Sales          
Less Cost of Product Sold: Variable Cost (0.568 of Sales)          
Fixed Costs          
Total Costs of Products Sold          
Gross Profit          
Gross Margin %          
 
Nucor Year +1 Year +2 Year +3 Year +4 Year +5
Sales          
Less Cost of Product Sold: Variable Cost (0.613 of Sales)          
Fixed Costs          
Total Costs of Products Sold          
Gross Profit          
Gross Margin %          

 

  1. Gross Margin Comparison: In one to two paragraphs, explain why the levels and variability of the gross margin percentages differ for these two firms for Year +1 through Year +5. Provide an example comparing the effect of the change in gross margin. (For example, if gross margin changed from 25% to 35%, what would it mean for each company?)

How much would Green Apparel save if, instead, the company adopted the operational dress code for all their staff?

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QUA301 Foundations: Quantitative Literacy – Introduction to Data Analysis
Assignment 1
Answer all questions showing all your calculations
Question 1
Green Apparel, a large clothes retailer with high street shops and an online shopping site, has a different
dress code policy for its admin and operational staff. The dress code for admin staff is suit and shoes and for operational staff is top, trousers, and shoes, all provided by the company. Green Apparel employs 330 staff as shown in the left side of Table 1. The right side of the table shows the cost of each clothes item by purchase quantity (which is not affected by clothing size). Although different types of shoes are available, their cost is assumed to be the same, as given in Table 1.

a. Calculate the total cost for Green Apparel to purchase the appropriate items for all their staff. [5 marks]
b. How much would Green Apparel save if, instead, the company adopted the operational dress code for all their staff? [2 marks]
c. What is the total cost of clothing the staff of one of the company’s warehouses, where 2 senior, 20
office employees plus 2/3 of the delivery and half of the warehouse employees are based, in a new
specific colour (same cost per item applies)? [3 marks]
d. If shoes of the operational staff need changing twice a year and of admin staff only once a year, how
much does Green Apparel spend on shoes per year? [2 marks]
e. Green Apparel is considering updating its logo and has budgeted £10,000 for uniform changes. The
logo is embroidered only on the jacket (2/3 of the cost of the suit) and top. Has the company budgeted
enough to pay for the cost of replacing these two items for all their staff? Justify your answer carefully.
[3 marks]
f. The delivery staff have suggested the introduction of a (sun) cap. Green Apparel has found two
suppliers: supplier “Best caps” offers a fixed £2 price per cap, and supplier “Caps for you” offers a
£2.50 price on the first 50 caps ordered and a discount of 50% on the rest of the order. Which supplier
would you recommend and why? [3 marks]
g. If Green Apparel hires 5 admin and 25 operational new staff, how much is the (separate) uniform bill?
[2 marks]
Question 2
“Pretty Sunglasses” sells three ranges of own brand sunglasses, basic, classic and designer, which are
priced at £99, £150 and £220, respectively. Last Spring, it sold 650 basic, 910 classic and 585 designer
sunglasses and, in the Summer, sales went up to 1040, 1430 and 1170, respectively.
a. Produce a table summarising the above information on the sales of each range of sunglasses in Spring
and Summer. Include the price information as a separate row/column. [6 marks]
b. What is the percentage increase of sales of all three ranges sunglasses from Spring to Summer? And
what is the percentage increase in total sales? [4 marks]
c. A new basic range will be introduced in the Autumn by Pretty Sunglasses, so it was decided to offer a
25% discount on the price of the current basic range. What is the new retail price? If 35% of the basic
range were sold at this price and the rest at the original price in the Summer, what was the total value
of the sales of this range in the Summer? [4 marks]
d. VAT is charged at 20%. What is the pre-VAT price (price excluding VAT) of designer sunglasses? What
was the total VAT revenue collected by Pretty Sunglasses on designer sunglasses sales in the Spring?
[3 marks]
e. Use a chart(s) of your choice to analyse the sales of Pretty Sunglasses over the two seasons. [3
marks]
Question 3
Renoir plc is considering investing in a new machine for its packaging plant.
a. The company is considering two machines that meet its needs. They both have an expected life of 5
years. Machine A costs £5,500 and is expected to have a scrap value of £600. Machine B costs £5,000
and is expected to have a scrap value of £1,000. Their expected cashflows are given in Table 2.
Calculate and compare the Accounting Rate of Return (ARR) and Payback Period (PP) for both
machines. [10 marks]
Table 2: Expected cashflows (before depreciation) of machines A and B
Year Machine A Machine B
0 (£5,500) (£5,000)
1 £2,000 £1,400
2 £2,000 £1,600
3 £2,000 £2,000
4 £2,000 £2,000
5 £2,000 £1,800
5 £600 £1,000
b. Is there a case for investing in any of these machines? Using a discount rate of 10% and the
appropriate calculations, can you help the management of Renoir plc to make a decision about this
new machine they want to invest in? [10 marks]
c. The company is also considering machine C which has an expected life of 5 years and is expected to
generate annual cashflows of £2,500. Using a discount rate of 10%, what is the maximum amount the
company should pay for the machine if it is not to suffer a net loss as a result of the investment? [5
marks]
Question 4
Monet plc has an opportunity to invest in a plant for the manufacture of reusable water bottles, the demand
for which is estimated to be 500,000 bottles a year for five years. The following data relates to the decision.
ګ The machine is estimated to cost £2,800,000 (payable immediately) and to have no residual value
ګ The selling price per bottle is planned to be £4.50
ګ The variable cost per bottle is estimated to be £2.90
ګ Overhead costs are not expected to be affected by the decision.
ګ The cost of capital for such a project is estimated to be 10% p.a.
ګ The project is not expected to require any additional working capital.
ګ In the interest of simplicity, taxation will be ignored.
ګ Assume, also in the interest of simplicity, that all cash flows occur at year ends
Required:
You are asked to undertake a sensitivity analysis of the above project for the following factors:
1. Initial investment [5 marks]
2. Sales price per bottle [5 marks]
3. Variable cost per bottle [5 marks]
4. Sales volume [5 marks]
5. Project discount rate [5 marks]
Summarise your results in a sensitivity analysis table advising the company on the most sensitive factor. [10
marks]

Critically examine the impact of the Qatar Diplomatic Crisis on the reputation / image of Qatar Airways in order to propose recommendations on how the airline can recover its position / market share.

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Aim – Critically examine the impact of the Qatar Diplomatic Crisis on the reputation / image of Qatar Airways in order to propose recommendations on how the airline can recover its position / market share.

^ need to finalise aim however leaning most toward the following;

Critically examine the impact of the Qatar Diplomatic Crisis on the reputation of Qatar Airways in order to propose recommendations on how the airline can recover its position within the market.

Objectives –

  1. Define and explain the concept of international diplomatic relations between different states (Lit review)
  • From a general broad perspective
  • Use of textbooks etc
  • Mention of Economic free trade deals
  1. Identify the key criteria that constitute effective diplomatic crisis relations within the context of the aviation industry (Lit review)
  • Narrow down into the aviation industry
  1. Conduct a timeline of the Qatar diplomatic crisis and examine the impact on the reputation of Qatar Airways (Findings and Analysis)
  • Started around 2016/17
  • Include government body websites such as, ICAO, IATA, FAA, EASA
  1. Complete a SWOT Analysis on the current reputation of Qatar Airways
  • Summarise key findings within a SWOT analysis
  1. Propose recommendations and strategies on how Qatar can rebuild its reputation
  • Give my strategies on how Qatar Airways can restore its reputation looking at Best Practise)

Evaluate experiential learning related to each professional competency by connecting theories and concepts with practical experiences.

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Requirements:
1. In an 8-page research paper, report experiential learning of the course outcomes and professional competencies by answering the following questions:
2. Evaluate experiential learning related to each course outcome by connecting theories and concepts with practical experiences.
3. Evaluate experiential learning related to each professional competency by connecting theories and concepts with practical experiences.
4. Discuss two valuable experiences in detail and how they apply to certain course outcomes.
5. Discuss how experiential learning opportunity helps with growth.
6. What challenges can be faced and why?
7. What can be done to eliminate these challenges? Requirements:

Explain the concept of financial statements fraud, and the auditors’ legal and professional responsibility.

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Assessment task details and instructions

(a) Introduction

According to the international and the UK auditing standards, auditors are accountable for obtaining reasonable assurance that financial statements should be free from material misstatements (MM). However, it is not possible to detect some

MM even if properly planned in accordance with ISAs as fraud is likely to be concealed (ISA 240,5).

Over the last decades, many fraud and audit failures took place internationally. As for example, the 2001 Enron scandal, eventually led to the liquidation of the Enron Corporation, an American energy company, and the de-facto dissolution of Arthur Andersen, which was one of the Big Five largest international audit and accountancy firms. Based on the current context of UK, Smith, S. (Senior Manager, KPMG/UK, 2017), stated that: ‘‘Fraud is on the up and dominated by low- value cases, suggesting individuals are stealing less significant amounts of money in an attempt to avoid detection. The fact employee fraud has more than doubled in comparison to previous years is also concerning. It’s a stark warning that business leaders need to be observant when it comes to keeping an eye on potential fraudulent activity in their organisations, and highlights the importance of implementing appropriate fraud prevention measures. Only by doing so will management teams be able to effectively mitigate risk and protect their business.”

(b) Requirements:

By referencing to auditing literature and professional standards, you are required to:

  1. 1)  Explain the concept of financial statements fraud, and the auditors’ legal and professional responsibility; (25%) 500 words
  2. 2)  Discuss –
  1. the ways auditors can recognize symptoms of fraud existence,(12.5%) 250 words
  2. the situations they may have difficulty in detecting existing fraud activities (12.5%). 250 words
  1. 3)  Discuss the actions by auditors when they detect fraud;(25%) 500 words
  2. 4)  Critically analyse the impact of fraud on audited financial statements. (25%) 500 words

It is essential to talk about a recent fraud event such as Thomas Cook and Enron and Lehman Brothers throughout the assignment but mainly in part 4 to critically analyse

Assessed intended learning outcomes

On successful completion of this assessment, you will be able to:

Knowledge and Understanding

180

  1. Evaluation of the auditing profession
    2. Appraisal of the professional auditing environment
    3. Select, present and synthesize relevant auditing information
  2. Understand the UK and International Corporate Governance regulatory framework.

Transferable Skills and other Attributes

  1. Effective use of written communications
    2. Location of information
    3. Construction of references/ bibliography using Harvard referencing

4.Development of presentational skills

Module Aims

To evaluate and appraise the role of the Professional Auditor in the UK 2. To consider and evaluate professional audit processes

  1. To reflect on the impact of the global business environment on the work of the Professional Auditor

Word count/ duration (if applicable)

The length of the assignment should not be more than 2000 words +/- 10% excluding bibliography and references. You should bear in mind that it is the quality of analysis that matters, not the number of words in the assignment.

Explain what kind of start-up costs will be incurred by the business. What will the business capital structure be? (the combination of debt and equity).

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Assignment Details:
This assignment makes up 50% of your overall final grade for the IY418 module.
It is a portfolio of work that you will complete with a final submission date in week 5.
You are required to submit a draft copy from week two.
You will receive feedback on your work from your tutor so that you can improve.
Scenario:
You have decided to start a new business, but the problem is that you don’t have enough funds to do so. This means that you only have very limited savings and your family and friends cannot provide you with the necessary funds either. You decided to consider external funding for your business idea as you think it is a very good business idea. You must write a Proposal Report about your business idea, your forecasted costs and budgets and how you intend to secure funding.
Report Structure
• Cover page with the name of your group
• Table of contents
• Executive Summary
Section 1
Business Idea (15%):
This section will introduce your business idea and should include a summary of the following key points.
• What is your business idea?
• What are the unique selling points of your product?
• What type of business (legal type) are you looking to start, and what are the reasons for your option?
• What is the estimated general start-up cost? Provide a summary break-down of the key components.
• Explain what kind of start-up costs will be incurred by the business.
• What will the business capital structure be? (the combination of debt and equity).
• If your business requires external funding, provide a summary of how much this funding requirement is.
• Summarise the outline structure of your reports. E.g. this report is divided into 7 sections. Section 2 discusses the budgeted financial statements. Section 3 discusses the cash flow forecasts etc.
Section 2
Financial Statements (30%)
• What is ‘budgeting’?
• Explain the purpose and importance of budgeting.
• Define Budgeted Income Statement and Budgeted Balance Sheet.
• Explain the purpose and importance of Budgeted Income Statement and Budgeted Balance Sheet.
• Explain what your estimates are based on.
• Prepare very simple Budgeted Income Statement and Balance Sheet.
Section 3
Cash-flow Forecast (40%)
• What is a ‘cash flow forecast’
• What are the benefits and disadvantages of a cash flow forecast?
• Identify cash inflows (money in) and cash outflows (money out) per year.
• Prepare a cash flow forecast for 5 years and identify what your estimates are based on.
• Explain any changes in cash inflows and cash outflows over the period of 5 years.
• Analyse the closing cash balances per year.
• Consider whether additional funding might be required in any of the years.
• If yes, what funding would you consider and why? Alternatively, you may consider how the surplus of cash should be managed.
Section 4
Cost – Volume Profit Analysis (40%)
• Explain ‘break-even analysis’
• What are the benefits and disadvantages of creating a break-even analysis?
• Create a break-even analysis for your business – what can your business learn from the break-even analysis based on your estimated costs?
• Estimate the target profit for Year 1 (or Year 2) and calculate how many units must be sold to achieve this target profit.
• What should be the sales revenue in order to achieve this target profit.
• Explain ‘margin of safety’ Calculate the margin of safety for your business based on your target profit.
• Discuss how changes in costs, volume and selling price may affect the profitability. Support the discussion with the relevant calculations
Section 5
Investment Appraisal (40%)
• Define investment appraisal and discuss its purpose and importance for the business.
• Explain four investment appraisal techniques (Accounting Rate of Return, Payback Period, Net Present Value and Internal Rate of Return).
• Consider the pros and cons of each technique.
• Conduct the investment appraisal using the following techniques: Accounting Rate of Return, Payback Period and Net Present Value.
• Identify and discuss the risks associated with the above investments.
Section 6
Sources of Finance (40%)
• List and explain various internal and external sources of finance that are available to the business in general.
• Choose 4 possible sources of finance that you might consider to fund your business idea.
• Evaluate the pros and cons of each of these sources of finance.
• Indicate what is your preferred source of finance from the range of possible funders and why.
• You must indicate and explain the costs associated with this choice and justify why it is acceptable and the most advantageous for your plan.
• Explain why the other sources of finance were not selected specifically to this proposal.
• Explain what the impact on your business idea would be if you don’t get the necessary funding or if you have selected an inappropriate form of finance.
Section 7
Conclusion (15%):
• You must end the proposal with a conclusion in which you briefly summarise everything that you have said in your proposal.
• Emphasize the potential of your idea and express the hope that you will be given the funding.
• You must convince your potential financier of the success of your idea.
• Group Reflection: a reflective discussion of the project work as a group (including the challenges faced and how you tried to overcome them) and what you learnt from the group project.
Section 8
• The list of References (part of individual mark) List all the references you have used in-text throughout the report in alphabetical order.
• Remember to use the Harvard referencing style

Interpret financial information in relation to a company’s mission and vision for aligning recommendations to attain strategic goals.

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Prompt: For this assignment, you will place yourself in the role of a controller as you review the Starbucks case study and apply your knowledge and understanding of accounting principles to resolve issues and formulate recommendations. You will present this milestone in the form of a report. You will receive feedback on each milestone, with the expectation that you will make any necessary revisions and then compile the milestones together for your final project submission.
For Milestone One you will analyze financial statements for Starbucks Corporation for fiscal 2010 through 2012 for financial analysis calculation and interpretation. You will then address linkages between financial results and operating strategy. As part of Critical Element I: Financial Indicators and Trend Analysis, you will begin by reviewing the financial statements and footnotes that are part of Starbucks’ annual report. Once you complete your review of the financial statements, you will focus on the gross profit ratio and return on assets and address the tasks in parts B and C of Critical Element I. Finally, you will perform a horizontal trend analysis to create a pro-forma financial statement. This assessment addresses the following course outcomes:
 Analyze financial accounting information from transactions through financial statement preparation for reporting results to internal and external users of information.

 Interpret financial information in relation to a company’s mission and vision for aligning recommendations to attain strategic goals.
Specifically, the following critical elements must be addressed in your milestone submission:
I. Financial Indicators and Trend Analysis

A. Analyze various ratio analyses and compare them to the financial statements and footnotes. Note any similarities or differences.

B. In reviewing the gross profit ratio, 2010 and 2011 were consistent versus a slight decrease in 2012. If management is looking to increase the gross profit ratio by 4%, what changes would need to be made in the components of gross profit (i.e., how much would sales increase if prices remained the same?)? Defend your response.

C. Analyze the return on assets (ROA) and discuss the advantages or disadvantages if Starbucks should expand assets by 5% but remain stable with sales.

D. Perform a horizontal trend analysis on the revenue components of Starbucks’s consolidated statements of earning and develop a pro forma financial statement for the next year, noting that coffee inventory will increase by 20% and same-store sales will remain flat. Ensure all information is entered accurately.
III. Interpret Financial Information Based on the case and researching Starbucks corporate philosophy:

a. Summarize how Starbucks meets its mission of “creating a reservoir of trust with their customers, partners, and communities that is deeper than at any time in their history.”
b. What considerations would need to be identified in the financial statements if Starbucks carries out its commitment to hiring veterans and military spouses? Why?

c. As controller, what are three challenges related to meeting this goal?

d. Starbucks is planning to open 1,500 new stores within the next 10 years. Evaluate the feasibility of opening stores in China, Brazil, and the Czech Republic. e. Rate each of the three locations with regard to prior sales history.
Guidelines for Submission: Your paper must be submitted as a 2- to 4-page Microsoft Word document with double spacing, 12-point Times New Roman font, one-inch margins, and at least three sources cited in APA format.
Critical Element Exemplary Proficient Needs Improvement Not Evident Value Case Study 1: Financial Indicators and Trend Analysis: Compare Meets “Proficient” criteria and is well qualified with concrete examples (100%) Analyzes various ratio analyses and compares them to the financial statements and footnotes, supporting the comparison with similarities and differences (90%) Analyzes various ratio analyses and compares them to the financial statements and footnotes but does not support the comparison with similarities and differences (70%) Does not analyze various ratio analyses (0%) 10 Case Study 1: Financial Indicators and Trend Analysis: Gross Profit Ratio Meets “Proficient” criteria and defense is well supported and contextualized (100%) Identifies changes that would need to be made in the components of the gross profit to increase the gross profit ratio and defends response (90%) Identifies changes that would need to be made in the components of the gross profit to increase the gross profit ratio but does not defend response (70%) Does not identify changes that would need to be made in the components of gross profit to increase the gross profit ratio (0%) 5 Case Study 1: Financial Indicators and Trend Analysis: Expand Assets Meets “Proficient” criteria and shows keen insight into the relationship between expansion of assets and sales (100%) Analyzes the ROA and discusses the advantages or disadvantages of expanding assets by 5% while remaining stable with sales (90%) Analyzes the ROA and discusses the advantages or disadvantages of expanding assets by 5% while remaining stable with sales but discussion lacks depth or detail (70%) Does not analyze the ROA (0%) 15 Case Study 1: Financial Indicators and Trend Analysis: Horizontal Trend Analysis Performs a horizontal trend analysis and develops a pro forma financial statement for the next year (100%) Performs a horizontal trend analysis and develops a pro forma financial statement for the next year but contains inaccuracies (70%) Does not perform a horizontal trend analysis (0%) 15 Case Study 1: Interpret Financial Information: Mission Meets “Proficient” criteria and summary is exceptionally clear and contextualized (100%) Summarizes how Starbucks meets its mission (90%) Summarizes how Starbucks meets its mission but summary lacks depth or detail (70%) Does not summarize how Starbucks meets its mission (0%) 5 Case Study 1: Interpret Financial Meets “Proficient” criteria and justification is well supported with concrete examples (100%) Identifies considerations that would need to be addressed and justifies response (90%) Identifies considerations that would need to be addressed but does not justify response (70%) Does not identify considerations (0%) 10

Information: Considerations Case Study 1: Interpret Financial Information: Challenges
Meets “Proficient” criteria and shows keen insight into potential challenges a controller may face (100%)
Identifies three challenges related to meeting the goal (90%)
Identifies three challenges but they are not related to meeting the goal (70%)
Does not identify challenges (0%)
Case Study 1: Interpret Financial Information: Feasibility
Meets “Proficient” criteria and cites scholarly research to illustrate claims (100%)
Evaluates the feasibility of opening stores in China, Brazil, and the Czech Republic (90%)
Evaluates the feasibility of opening stores in China, Brazil, and the Czech Republic but evaluation is cursory or lacks detail (70%)
Does not evaluate the feasibility of opening stores in China, Brazil, and the Czech Republic (0%)
Case Study 1: Interpret Financial Information: Rate
Meets “Proficient” criteria and rankings are well supported and logical (100%)
Rates each of the three locations with regard to the prior sales history (90%)
Rates each of the three locations but does not take prior sales history into consideration (70%)
Does not rate the three locations (0%)
Articulation of Response
Submission is free of errors related to citations, grammar, spelling, syntax, and organization and is presented in a professional and easy-to-read format (100%)
Submission has no major errors related to citations, grammar, spelling, syntax, or organization (90%)
Submission has major errors related to citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas (70%)
Submission has critical errors related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas (0%)

Describe and explain the corporate finance environment encompassing: the financial markets (market efficiency)

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The aim of the assessment is to: Help you develop an understanding and a critical appreciation of capital markets theory and its impact on corporation, investors and all other stakeholders

The report will help you understand why market efficiency is important in order to provide market confidence.

Make reference to  Market efficiency and the Efficient Markets Hypothesis reading chapter CH 2 p38-54 and many more sources  .

Describe and explain the corporate finance environment encompassing: the financial markets (market efficiency)

Assignment Title: Market Efficiency CW2

Description of the assignment: You are required to write a report critically exploring the efficient market hypothesis.

The efficient market hypothesis is concerned with establishing the prices of capital market securities and states that the prices of securities fully and fairly reflect all relevant available information
(Fama 1970).

It has been widely argued that efficiency in the capital markets is important as it performs a significant role in providing confidence to investors that they are getting access to complete and accurate information and market prices displayed are true and fair (Malkiel (2003), Timmermann & Granger (2004), Watson & Head (2016).

You are required to write a report critically exploring the efficient market hypothesis. Your report should consider the different forms of market efficiency and use empirical evidence to provide a critique of the hypothesis.

Using 4 news briefings on any 2 listed companies of your choice (2 each), illustrate the efficiency or lack of efficiency in the capital markets. Using one of the companies you have identified above, prepare and present chart(s) of the total shareholder return (TSR) from the share price movement over the past five years. Calculate the average and standard deviation of monthly total shareholder return (TSR) over the five years. Stock market shareholder return graphs should be produced for comparison. Credit is given for correctly incorporating dividend payments into your company’s shareholder returns calculations. In the appendices include the actual tabulated data, correctly sourced and referenced and show your workings. Provide a brief commentary comparing the market returns to your chosen firm.

Report Guidance.

Your word-processed report should be no longer than 1,500 words (excluding references, appendices and tables) (+/-) 10 %.

All information must be appropriately sourced and referenced using the Harvard referencing system, both in‐text and in the references list. Inappropriate sources of information, such as Wikipedia, tutor2you, Investopedia, descriptive websites etc., will result in a loss of marks.

Recommended reading.

Malkiel, B,G.(2003). The Efficient Market Hypothesis and Its Critics .The Journal of Economic Perspectives, 03/2003, Volume 17, Issue 1.

Fama,E (1998) Market efficiency, long-term returns, and behavioural finance. Journal of Financial Economics 49 (1998) 283–306

Timmermann, A & Granger, C.(2004). Efficient market hypothesis and forecasting W.J International Journal of Forecasting, 2004, Volume 20, Issue 1.

Kauffman, Robert J; Spaulding, Trent J; Wood, Charles A.(2009) .Are online auction markets efficient? An empirical study of market liquidity and abnormal returns. Decision Support Systems, 2009, Volume 48, Issue 1.

Spyridon ,R (2016).Abnormal stock returns in Greece during the Cypriot banking crisis Journal of Money Laundering Control, 05/2016, Volume 19, Issue 2.

Frisch,T , Kolaric,S & Schiereck,D.(2014). Returns On Large Stock Price Declines And Increases In The South African Stock Market: A Note On Market.International Business & Economics Research Journal, 04/2014, Volume 13, Issue 3.

Watson,D & Head,A. (2016).Corporate Finance: Principles and Practice 7th Edition .Prentice Hall.

Introduction – 10 marks

  • Clearly outline the objectives of the report & provide a brief introduction on the significance of market efficiency.
  • Include theorists.

Efficient Market Hypothesis explored – 20 marks

  • Efficient Market Hypothesis definition, (explained and explored in financial markets)
  • Use theorists.
  • Explore the different forms of market efficiency (weak, semi strong and strong form) (use some of the required reading to provide a critic of the theory.

Testing efficient market efficiency (EMH) – 30 marks

  • You are required to select two companies and use 2 news /events on each of these companies to test market efficiency.
  • Selection of 2 companies for examining evidence for and Against the EMH. Reasons should be provided for selection of the company and events and how these help to demonstrate efficiency or lack of market efficiency (semi strong market).You select a news(event) and see what the market/share price was before and after the event. Observe to see if the movement indicates that the market reacted timely and accurately to the news (no under or over reaction).You can also use theory /( academic references including required reading) to explain how shares should react in a semi strong market.(then explain if the market was efficient or inefficient using that news/event.
  • List each theorist 4 minimum and explain and how the theory is linked to the business. Using the recommended and new theorists. Also include the charts and data e.g. Timmermans theory supports forecasting so give graph and explain.
  • Use figures from yahoo finance – e.g. search (Aston martin historical yahoo finance) on google – click on first link, then click on historical data, change time period to 5 years, then change the frequency to monthly, click on apply, then download the data. Then put the data in a chart.

Company shareholder returns – 20 marks

  • Using one of the companies above prepare 60 months returns (must be monthly). Draw a cumulative chart/graph and Briefly comment on the returns over the years possible in comparison to overall FTSE market returns over the same period.(use company beta to allow you to compare company returns with market returns)
  • Selection of one of listed firms above. Correct data sourced, referenced in the report and presented. The Chart should be correctly presented with clear titling and labelling .Correct calculations of monthly returns in the appendix
  • In appendix provide a table (calculation of monthly returns, averages and standard deviations)