Accounting assignment REQUIRED:

a) Prepare financial ratios for Rolls Royce plc and Costain plc for 2010 & 2011 which will enable the financial position and performance of the companies in 2011 to be measured. You are required to calculate the rations listed below. Use the attached abridged accounts for 2010 & 2011 as the basis for your calculations. Show your calculations. Design your typeface font size and layout so that the ratios and the calculations can be set out on NO MORE than 3 pages of A4 for each company. The calculations should be shown in the appendix of your report.

b) This section of the report is to analyse and interpret the financial data. Use the ratios from section a) to analyse and make a judgment on the companies financial performance for the financial year 2011. I recommend that you subdivide this section into the five main groups of ratios. You should comment on why the ratios are what they are and how events in the year have influenced the financial outcomes. You should include graphs and charts showing trends. Compare performance on key ratios against industry averages or the performance of a key competitor. If you merely state that one ratio is bigger than another or that it has gone up or down from the previous year this will not secure you a pass at master’s level. Your report for this section should not be longer than 2,000 words, excluding diagrams, tables, Appendices and your bibliography.

c) Prepare a summary of the key future prospects for one of the organisations for the year following these accounts. You should read the plans outlined in the annual reports and come to a judgment on whether you think they are realistic in the current economic climate and achievable in the context of their recent performance that you have analysed in sections a) and b). This should be prepared as a power point presentation of no more than12 slides, to be prepared and printed in note format with concise notes of what you will say to accompany each slide.

Ratios required.

Gearing: Gearing Liquidity: Current, Acid Test Profitability: Return on Capital Employed, Gross Profit Margin, Net Profit Margin Efficiency: Inventory Turnover, Receivables (Debtor) days, Payables (Creditors) days,

Asset Turnover Investment: Dividend yield, Price/earnings (P/E)

Use the Borrowings only in the Non-Current Liabilities sections of the accounts to calculate Capital Employed. You will need to research the market price per share.

Assignment style contents and presentation

Your assignment should be word processed and presented in the form of a business report, to include a contents page and complete with appendices, notes and a full set of references to any materials and sources that you use, set out in the Harvard style. Any and all references to materials used must be acknowledged preferably by using footnotes to source facts.

The writing style should be incisive, factually based and focused on the performance of Rolls Royce plc and Costain plc. The accounts for both companies will be a key point of reference and are available in the Investor sections of the companies’ websites. You must take into account the knowledge of your reader and completely avoid tutorial type explanations or general unfocused commentary.

The Appendix should contain all calculations of the ratios. Calculations must show each formula in words and then the formula shown again with the individual figures and then the result of the calculation. The way the figures are displayed in the Appendix must be such that there is an adequate “audit trail” back to the financial statements. The final result of the ratio calculation is found in the relevant table in the main section of the report.

The ratios for section a) should be set out on NO MORE than 3 pages of A4 for each company. The calculations should be shown in the appendix of your report and not in the main body of the report

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The report for section b) should not be longer than 2,000 words, excluding diagrams, tables, Appendices and your bibliography.

The powerpoint presentation for task C should be no more than 12 slides long.

The following are the criteria for a distinction level report

Criteria Excellent (70 +)Quality of Writing

The writing style follows academic conventions; it is precise, concise, rigorous, clear and cogent. Near perfect grammar, spelling and syntax.

Structure and Organisation of Content

The report follows a logical structure that is clear to the reader from the outset. The introduction/background sets out relevant details of the organisational structure, market or sector position, features of the segment in which it operates and any other information relevant to the organisations’ performance. The main part of the report has a clear focus on the interpretation of the ratios in relation to events during the year and conveys the ‘story’ in a clear and logical manner. The report ends with a concise conclusion that reflects on the main outcomes from the previous sections of the report.

Presentation Presentation is clean and simple and avoids unnecessary elaboration (changes of colours, fonts, and the use of contrived layouts). Use is made of diagrams and tables when appropriate and these are referred to but not repeated in words in the text and add to the readers understanding. The report references sources in an appropriate way – according to the Harvard referencing format. Appendices show ratio and other calculations in a clear and logical format and provide a clear “ audit trail” back to the financial statements. Ratios are appropriate and accurate.

Analysis The report has extensive analytical content, which makes use of analytical techniques such as sensitivity analysis, comparisons, contrasts, differences, similarities, arguments and possibly counterarguments in order to advance the analysis. Use of evidence and references to back assertions. Evidence of higher analytical skills such as evaluation and judgement. Arguments conveyed throughout the paper are presented in a logical fashion and avoid contradiction, unsubstantiated opinion and tutorial type narrative. Arguments set out are in keeping with events during the year and information in future prospects.

Knowledge and understanding

The report demonstrates an extensive knowledge of concepts, principles and empirical evidence, and an ability to apply the material in an appropriate way.

Research and Background Reading

The report demonstrates a broad range of reading beyond the confines of the textbook material; uses materials from the financial press to good effect in supporting arguments, propositions, conclusions. Demonstrates a thorough investigation or examination of data sources.

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End of Assessment

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