Assignment Brief BTEC Level 5 Higher National Diploma in Business Unit Aim The unit aim is to provide learners with an understanding of where and how to access sources of finance for a business, and the skills to use financial information for decision making. Unit introduction This unit is designed to give learners a broad understanding of the sources and availability of finance for a business organisation. Learners will learn how to evaluate these different sources and compare how they are used. They will learn how financial information is recorded and how to use this information to make decisions for example in planning and budgeting. Decisions relating to pricing and investment appraisal are also considered within the unit. Finally, learners will learn and apply techniques used to evaluate financial performance. Learning outcomes and assessment criteria In order to pass this unit, the assignment that you present for assessment needs to demonstrate that you can meet all the learning outcomes listed below. Learning Outcomes ( LO) Assessment Criteria ( AC)

1. Understand the sources of finance available to a business.

1 1.1 identify the sources of finance available to business 1.2 assess the implications of the different sources a

1.3 evaluate appropriate sources of finance for business project a

2. Understand the implications of finance as a resource within a business 2 2.1 analyse 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 2.4 explain the impact of finance on the financial statements

3. Be able to make financial decisions based on financial information 3 3.1 analyse budgets and make appropriate decisions 3.2 explain the calculation of unit costs and make pricin decisions using relevant information 3.3 assess the viability of a project using investment appraisal techniques g

4. Be able to evaluate the financial performance of a business 4 4.1 discuss the main financial statements 4.2 compare appropriate formats of financial statements for different types of business 4.3 interpret financial statements using appropriate ratios and comparisons, both internal and external.

Before you get started please read the following information very carefully. Assignment Format/Style Produce an informal report/paper that addresses all the tasks in the assignment brief. You are encouraged to use diagrams or tables to illustrate and reinforce your findings. Any references to academic theory should be correctly cited and referenced in a bibliography at the end of the report. (please do not copy and paste information) Fully completed assignment cover page Title page Table of contents Introduction Main body of the report clearly identifying the separate outcomes and assessment criteria Conclusion and recommendations ( if relevant) References and bibliography Appendices only if relevant and necessary Assignment Content The assignment brief includes headings relevant to the unit outcomes, read and follow the tasks listed under each heading and this will make certain that you cover all the outcomes and assessment criteria to achieve the unit. Assessment and Grading Read the assessment grading criteria before attempting the assignment tasks, as it contains important information about how you should approach your assignment and how grading is applied in order for you to achieve a pass, merit or distinction. Assignment Submission All assignments must be submitted by the agreed date, via MOODLE. Assignments submitted late, but with permission, will be marked as a pass only. Assignments submitted late, without permission, will not be marked until the end of the year, or the next time the unit is scheduled. Please ensure that your assignment is attached to the assignment submission receipt and that you read and sign the statement confirming authenticity. Check that all relevant fields are completed fully before submission. Assignment Feedback Once the assessor has marked your assignment, you will receive written feedback, either confirming that you have met the required standard and grade awarded, or that you have not yet met the standard and what you need to do to make the necessary improvements. Please note that achieved and confirmation of grades is provisional until signed off by the Internal Verifier. Student Guide to Writing an Assignment This is an assignment guide to help support you while completing your BTEC Assignments. It includes: Assignment writing guidance Referencing guidance Recommended Reading A reading list will be given to you at the first session unit session. You should also read a good quality newspaper and/or use relevant internet sites regularly and identify key influences and recent and relevant research with regard to your subject area. You should read topical case studies and read about national campaigns and government initiatives in your area of interest. Good Luck!

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Assessment and Grading The grading of Edexcel BTEC Higher National Qualifications is at the unit and the qualification level. Each successfully completed unit will be graded as a pass, merit or distinction. Learners will be awarded a merit or distinction grade by the aggregation of points gained through the successful achievement of individual units. The points will be calculated based on the unit credit size, the points available for each credit is: pass = 0 merit =1 distinction= 2. To achieve a merit grade overall you will need to accumulate a minimum of 75 points and for a distinction a minimum of 150 points. To achieve a Pass A pass grade is achievable by meeting all the requirements defined in the assessment criteria for pass for each unit. To achieve a Merit a The learners evidence shows, for example: learner must: Identify and apply Effective judgments have been made strategies to find Complex problems with more than one variable have been explored appropriate solutions An effective approach to study and research has been applied Relevant theories and techniques have been applied Select/design and apply A range of methods and techniques have been applied appropriate methods and A range of sources of information has been used techniques The selection of methods and techniques/sources has been justified The design of methods/techniques has been justified Complex information/data has been synthesized and processed. Appropriate learning methods/techniques have been applied. The appropriate structure and approach has been used Present and Coherent, logical development of principles/concepts for the intended communicate appropriate audience findings A range of methods of presentation have been used and technical language has been accurately used. Communication has taken place in familiar and unfamiliar contexts The communication is appropriate for familiar and unfamiliar audiences and appropriate media have been used. To achieve a distinction a The learners evidence shows, for example: leaner must: Use critical reflection to Conclusions have been arrived at through synthesis of ideas and have evaluate own work and been justified. justify valid conclusions The validity of results has been evaluated using defined criteria. Self-criticism of approach has taken place Realistic improvements have been proposed against defined characteristics for success. Take responsibility for Autonomy/independence has been demonstrated managing and organising Substantial activities, projects or investigations have been planned, activities. managed and organized. Activities have been managed The unforeseen has been accommodated The importance of interdependence has been recognised and achieved. Demonstrate Ideas have been generated and decisions taken convergent/lateral/creati Self-evaluation has taken place ve thinking Convergent and lateral thinking have been applied Receptiveness to new ideas is evident Effective thinking has taken place in unfamiliar contexts Overview Please use the headings shown below when writing up your report Assessment Criteria coverage

Assignment Title

Evaluate the financial performance of a business Title is provided

Context Briefly describe your organisation and what it does. Context of assignment is provided

Understand the sources of finance available to a business (learning outcome 1) Task 1a

Right from the moment someone thinks of a business idea, there needs to be cash. Depending on the type of the business, it will need to finance the purchase of assets, materials, employing people and financing the day to day running of the business. Choosing the right source of finance will depend on the needs of the business. You are required to identify the sources of finance available to your business which considers options for short-term and long-term finance. Task 1b You have now identified the sources of finance available to your business. Before you make the final decision about the finance option for your business, you must assess the implications of the different finance sources you identified in 1a. Task 3 Your Organisation seeks to expand and sell their services/products into a new geographical area. You are part of the innovation project team and your role is to evaluate a range of appropriate finance sources and provide clear information to the decision makers. You are to produce a report that evaluates 3 different finance sources appropriate to the project brief. AC 1.1 AC 1.2 AC 1.3

Understand the implications of finance as a resource within a business (learning outcome 2)

Task 1 You have already identified the different sources of finance. You are to take the next step and analyse the costs of the different sources of finance. Consider the list below or include your own if relevant: 1. tangible costs; such as, interest and dividends; 2. opportunity costs; such as loss of alternative projects when using AC 2.1

You will learn about and gain an understanding of a broad range of financial sources, availability and implications for a business. You will learn how to make financial decisions and evaluate the financial performance of a business. The organisation that you choose can be one that you are familiar with or by choosing a case study provided by GCMS

retained earnings; 3. tax Task 2

Financial planning determines how a business affords and finances its strategic goals and objectives. You are to consider the implications to a business of failing to finance adequately and explain the overall importance of financial planning. Task 3 Within your organisation there are various functions, departments and individuals who need financial information to support business and operational decisions. You are to identify three main decision makers and assess their financial information needs. Task 4 You are to explain the impact of finance on the financial statements produced by your Organisation. Include the two points listed below: 1. How different types of finance and their costs appear in the financial statements. 2. The interaction of assets and liabilities on the balance sheet and on international equivalents under the International Accounting Standards (IAS) AC 2.2 AC2.3 AC2.4

Be able to make financial decisions based on financial information (learning outcome 3) Task 1

Finance uses the analytic process to develop recommendations on budget proposals and issues that may financially impact the business. To demonstrate that you are able to make sound financial decisions, you are to select and analyse 3 different budgets from the list below: 1. Cash Budget 2. Human Resource Budget 3. Marketing Budget 4. Advertising Budget 5. Capital Expenditure Budget 6. Operating Budget Task 2 By using one of the budgets analysed in task one and other relevant financial information gathered in the other tasks. Explain the calculation of the unit costs and make your own judgements to the pricing decisions. Task 3 AC3.1 AC3.2

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You are required to assess the viability of a project by using investment appraisal techniques. Select 3 of the following techniques to carry out your assessment. Payback period; Accounting rate of return; Discounted cash flow techniques Internal rate of return AC3.3

Be able to evaluate the financial performance of a business (learning outcome 4) Management of any business requires a flow of information to make informed, intelligent decisions affecting the success or failure of its business. Management, Investors and Stakeholder need financial statements to analyse, to ascertain the investment potential and to identify any risks involved in doing business with the Organisation. On successful completion of the following tasks you will show that you know, understand and can demonstrate that you are able to evaluate the financial performance of a business.

Task 1 Provide a report that discusses the main financial statements in your Orgainisation. You may select the 3 financial statements listed below, or choose alternatives that are specific to your Organisation. 1. balance sheet 2. profit and loss account 3. cash flow statement. Task 2 Compare the format of the 3 financial statements against the industry standard for 2 different types of businesses. Select 2 from the list below: 1. limited company 2. Partnerships 3. sole trader Task 3 Financial ratios are one of the most common tools of managerial decision making. Financial ratios involve the comparison of various figures from the financial statements in order to gain information about the business performance. Task 3a Using the three financial statements discussed in task one, you are to interpret the financial statements of your Organisation, using the three ratios listed below. AC4.1 AC4.2 AC4.3

Profitability Ratio Liquidity Ratio Asset Utilization Ratio Task 3b Make comparative judgements both internally ( previous periods, budgets and forecasts) and externally ( Competitors and Industry standards)

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Reading Materials Textbooks Denzil Watson & Antony Head, Corporate Finance, Fifth Edition, ISBN 9780273725251 Business study guide, Level 4 & 5, Edexcel (2011, Pearson Education Limited), ISBN 978085776003 tBroadben J - Managing Financial Resources sChartered Management Institute serie (Elsevier, 2003 ISBN )0750657553, 9780750657556 Hayre, A. (2015). Managing Financial Resources and Decisions Seitz, N., & Ellison, M. (1995) Capital budgeting and long-term financing decisions. Harcourt Brace College Publishers Journals Huselid, M. A., Jackson, S. E., & Schuler, R. S. (1997). Technical and strategic human resources management effectiveness as determinants of firm performance. Academy of Management journal, 171, 40(1)-188. Gross, D. B. (1995). The constrained firmsinvestment and financing decisions of liquidity dissertation, Doctoral (Massachusetts Institute of Technology). Howlett, E., Kees, J., & Kemp, E. (2008). The role of selfregulation, future orientation, and financial knowledge in longterm financial decisions. Journal of Consumer Affairs, 42(2), 223-242. Surroca, J., Trib, J. A., & Waddock, S. (2010). Corporate responsibility and financial performance: The role of intangible resources. Strategic Management Journal, 31(5), 463-490. Websites http://www.cbd.int/ http://www.dailyfinance.com/ financialfountains.com www.digitallibrary.edu.pk www. fsb.org

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