INTRODUCTION TO FINANCE Unit Title Introduction to Finance Unit Reference Number M/616/2722Unit Level Level 4AssessorDate issuedHand in DateUnit Grading Structure Pass Assessment Guidance To achieve this unit, learners must achieve the learning outcomes and meet the standards specified by all assessment criteria for the unit.
LO LO Description AC AC Description1 Understand sources of
finance available to a
business.1.1 Assess the benefits and limitations of the different sources of finance.1.2 Evaluate appropriate sources of finance for a business project.2 Understand finance as a resource within a business.2.1 Determine the costs of different sources of finance.2.2 Explain the importance of financial planning.2.3 Assess the information needs of different decision makers in a business.2.4 Explain the impact of sources of finance on the financial statement.3 Be able to make financial decisions based on financial information.3.1 Analyse budgets and recommend appropriate decisions.3.2 Explain the calculation of unit costs.3.3 Make pricing decisions using relevant information.3.4 Assess the viability of a project using investment appraisal techniques.4 Be able to assess the
financial performance of a business.4.1 Compare formats of financial statements appropriate for different types of business.4.2 Interpret financial statements using appropriate ratios and comparisons, both internal and external.
Scenario
Each task has its own scenario for this assignment
Task 1 of 3 – Financial Advice Report (ACs 1.1, 1.2, 2.1, 2.2, 2.3 & 2.4)
Scenario
You are a Financial Advisor; a client has approached you for advice about opening a flower shop business. The client has saved £10,000 but knows that a minimum of £30,000 is needed to start the business.
Instructions
You are to give advice regarding possible financial sources to raise the remaining £20,000.00 and need to:
Assess the benefits and limitations of different sources of finance.
Evaluate appropriate sources of finance for this business project.
Determine the costs of different sources of finance.
Explain the importance of financial planning.
Assess the information needs of different decision makers in a business. • Explain the impact of sources of finance on the financial statement.
Write your findings in a report to be given to be given to the client
Delivery and Submission
1x Financial Advice Report – 750 words
Task 2 of 3 – Financial Decisions Report (ACs 3.1, 3.2, 3.3, 3.4, 4.1) Instructions
Scenario
Mr May is a sole trader and owns WoodyTrain, a toy store specialising in handcrafted wooden train toys. Mr May wants to raise £20,000 by getting a new partner.
Instructions
You are required answer the following points and produce a report of your findings: • Analyse the types of business budgets that Mr May have prepared for this business organisation. Recommend how these budgets would allow a new partner to make an informed decision about investment.
Explain the different methods Mr May could use to calculate the unit cost of the handcrafted wooden train toys.
Compare the format of the financial statements that Mr May will currently prepare for his sole trader business with those prepared for a partnership and limited company. • WoodyTrain has been asked to supply a large number of toys to a large retailer at a
discounted price of 50%. Advise Mr May on what he needs to consider before replying to the retailer.
WoodyTrain is considering expanding and purchasing a new toy store. Two new stores are being considered – Toy Store A and Toy Store B.
The following are the estimated cash flows for each building. Year Toy Store A Toy Store B£ £0 -375 000 -425 0001 200 000 200 0002 110 000 150 0003 220 000 300 0004 130 000 250 000
The toy store’s cost of capital is 12%. The extract from present value tables of £1 @ 12%: Year 1 0.893Year 2 0.797Year 3 0.712Year 4 0.636
Calculate for each building:
o Payback
o Net Present Value
Recommend and justify, based on your financial analysis, which Toy Store, Mr May should purchase.
Delivery and Submission
1x Financial Decisions Report – 1000 words
Task 3 of 3 – Financial Analysis Report (AC 4.2)
For this task, you are employed as an adviser to a team of Toy Store Owners. For research, you should review the published accounts of Hamleys Group Limited (Toy Store), which can be downloaded from
https://beta.companieshouse.gov.uk/company/02352435/filing-history
You are required to prepare a financial analysis report that includes the following: • An evaluation of the financial statements of Hamleys Group Limited. You should evaluate the structure, format and requirements of their published accounts. • A description of how the following ratios could be used by organisations, such as Hamleys Group Limited and their stakeholders.
You should consider the following ratio groups:
o Profitability
o Liquidity
o Efficiency
o Capital
o Investor
Delivery and Submission
1x Financial Analysis Report – 750 words
Referencing:
Each section must reflect any supporting Harvard style citations.
A comprehensive Harvard style reference list must be included at the end of the work.
Evidence to be submitted:
Financial Advice Report – 750 words
Financial Decisions Report – 1000 words
Financial Analysis Report – 750 words
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