Vocational Scenario or Context Task 2 You have been researching the financial sector and the many career opportunities available, as you are interested in working in the financial sector. You have discovered that all companies, across every industry, will need someone who is good with numbers, and you are interested in working in finance. You are working to improve your finance skills and are currently on work experience at an accountancy firm as a trainee accounts assistant. You have been given a case study with data on two public limited companies in the same industry to work with. For Company A this includes the information required to prepare financial statements and shareholder ratios for this year. For Company B you have the information required to calculate shareholder ratios for this year. You will need to demonstrate to your work experience employer your current skills and knowledge. This involves carrying out independent research, and, using the given data on the two companies, creating a number of financial documents and reports. You have now been asked to explore cash flow statements. You have been given last year's statement for Company A, and the information to complete this year's statement. Using independent research and information from Company A, you must write a report that evaluates the financial position of Company A for current stakeholders. This will include: o an analysis of the changes in the financial position of the company from one period to another. o an explanation of the purpose of a cash flow statement and complete a cash flow statement for the company in accordance with the format in IAS7, using the data provided. INFORMATION FOR COMPANY A TO CONSTRUCT CONSOLIDATED INCOME STATEMENT AND STATEMENT OF FINANCIAL POSITION 52 weeks to 31 December..... £m Revenue Cost of sales Distribution costs Administrative expenses Unrealised foreign exchange gains/(losses) (5.6) Share of results of associate Finance Income 4,176.9 (2,724.2) (351.6) (229.3) 1.0 0.5 Finance costs (31.6) Taxation (169.3) Plant, property and equipment 536.4 Intangible assets 43.7 Interests in associate and other investments 2.1 Defined benefit pension assets 46.0 Other financial assets 57.0 Deferred tax assets 2.7 Inventories 486.5 Customer and other receivables 1,050.5 Other financial assets 38.9 Cash and short term deposits 66.3 Bank loans and overdrafts (128.6) Corporate bonds (current liabilities) (213.8) Trade payables and other liabilities (673.5) Dividends payable (88.3) Other financial liabilities (1.3) Current tax liabilities (65.1) Corporate bonds (non current liabilities) (615.0) Provisions Other financial liabilities Other liabilities Deferred tax liabilities (7.3) (13.9) (211.5) Company A Number of ordinary shares issued: 500 million Price per share: 5802 pence

Vocational Scenario or Context Task 2 You have been researching the financial sector and the many career opportunities available, as you are interested in working in the financial sector. You have discovered that all companies, across every industry, will need someone who is good with numbers, and you are interested in working in finance. You are working to improve your finance skills and are currently on work experience at an accountancy firm as a trainee accounts assistant. You have been given a case study with data on two public limited companies in the same industry to work with. For Company A this includes the information required to prepare financial statements and shareholder ratios for this year. For Company B you have the information required to calculate shareholder ratios for this year. You will need to demonstrate to your work experience employer your current skills and knowledge. This involves carrying out independent research, and, using the given data on the two companies, creating a number of financial documents and reports. You have now been asked to explore cash flow statements. You have been given last year's statement for Company A, and the information to complete this year's statement. Using independent research and information from Company A, you must write a report that evaluates the financial position of Company A for current stakeholders. This will include: o an analysis of the changes in the financial position of the company from one period to another. o an explanation of the purpose of a cash flow statement and complete a cash flow statement for the company in accordance with the format in IAS7, using the data provided. INFORMATION FOR COMPANY A TO CONSTRUCT CONSOLIDATED INCOME STATEMENT AND STATEMENT OF FINANCIAL POSITION 52 weeks to 31 December..... £m Revenue Cost of sales Distribution costs Administrative expenses Unrealised foreign exchange gains/(losses) (5.6) Share of results of associate Finance Income 4,176.9 (2,724.2) (351.6) (229.3) 1.0 0.5 Finance costs (31.6) Taxation (169.3) Plant, property and equipment 536.4 Intangible assets 43.7 Interests in associate and other investments 2.1 Defined benefit pension assets 46.0 Other financial assets 57.0 Deferred tax assets 2.7 Inventories 486.5 Customer and other receivables 1,050.5 Other financial assets 38.9 Cash and short term deposits 66.3 Bank loans and overdrafts (128.6) Corporate bonds (current liabilities) (213.8) Trade payables and other liabilities (673.5) Dividends payable (88.3) Other financial liabilities (1.3) Current tax liabilities (65.1) Corporate bonds (non current liabilities) (615.0) Provisions Other financial liabilities Other liabilities Deferred tax liabilities (7.3) (13.9) (211.5) Company A Number of ordinary shares issued: 500 million Price per share: 5802 pence

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter13: Agency Conflicts And Corporate Governance

Section: Chapter Questions

Problem 1jM

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