MasterofBusinessAdministration(MBA)

ASSESSMENT COVER SHEET Program Module Number Assessment Assignment Title Lecturer Student Name Date Handed Over Date Submitted Assessors Feedback 10th November, 2010 Due Date Pass/ ReSubmission Student Number 24th November, 2010 Master of Business Administration MBA 401 UWIC MBA BATCH - 04 Semester - 01

Module Title Accounting for Decision Makers

Assignment 01 Use of financial information for effective decision making

Final Grade Assessors Name Assessors Signature

A 70+

B 60-69

C 50-59

D 40-49

E 35-39

F -35%

Date Assessed :

Student Signature & Comments

InternationalCollegeofBusinessandTechnology

MasterofBusinessAdministration(MBA)

Assignment Brief

(10 Marks)

Aim of the assignment To understand different types of ratios and their meaning by interpreting them

Learning outcomes How these ratios could be used to make managerial decisions Brief/ Topics The assignment consists of two parts A) You are required to produce a 20 minutes power point presentation on one of the two topics below. B) You are required to prepare a 1000 word written report on the chosen topic.

All groups are expected to prepare for the required topics but two groups will be randomly selected to present. All groups should submit the Hard/Soft copies for marking purposes. Refer annex 1 & 2 for the details

Marking criteria The following criteria will be used when marking your Presentation: Structure of the Presentation and timing 15% Clarity, Relevance and Discussion 35% Conclusion and Recommendation - 25% Individual Skills 25 % ( Presentation style, timing, Audience attention) The following criteria will be taken into consideration in marking your Report Structure of the report 25% Clarity, Relevance and Discussion 45% Conclusion and Recommendation - 30%

InternationalCollegeofBusinessandTechnology

MasterofBusinessAdministration(MBA)

REPORT STRUCTURE Paper Size Word Count Printing Margins Binding Margin Header and Footer Printing Basic Font Size Line Spacing Font Style Presentation : A4 : 1000 words : LHS; RHS: 1 Inch 25 mm : Inch 12 mm : 1 Inch : Single Sided : 12 : 1.5 : Arial/Times New Roman : Bound Document

Important Information for Students The assignment should be submitted as a SOFT COPY in a word format ONLY (CD ONLY) as well as HARD COPY on or before the due date. Please note that plagiarism is treated as a serious offence and therefore the work you produce must be individual and original although may work in groups in some instances (Please refer to Student Handbook on Plagiarism & Cheating). All sources of information must be referenced using Harvard referencing where a reference listing should be included at the end of the assignment. Please note that the submission date given for this assignment is the final date that you can hand over the assignment. No late submissions are allowed. (Please refer to the Student Handbook on Assessments - Late Submissions). Please refer to Student Handbook on Assignments Re-submission.

InternationalCollegeofBusinessandTechnology

MasterofBusinessAdministration(MBA)

Annexure 01 Group (1), (2) and (3) 1. RDB PLC has been in the business of running a Tourist Hotel in Galle. Commercial operations of the 2nd hotel of the Company in trincomalee was started on 2nd April 2009. The Company (RDB PLC) has requested a long term loan from your Bank to meet working capital requirements of the Company and settle some of the loans for which interest is paid at relatively higher rates. You are required to write a report detailing, (a) Ratios you would compute to assess the credit worthiness of RDB PLC, (b) Why you have selected the ratios referred in (a) above

(c) Critically analyze the financial performance and financial position of the Company from the following information given.

Gross profit ratio Net profit ratio Return on shareholders funds Return on capital employed Current ratio Quick ratio Gearing ratio Interest cover Earnings per share Debt collection period

2009/2010 57% 22% 23% 18% 1.2 0.6 48% 4 times Rs.6.30 60 Days

2008/2009 52% 28% 27% 21% 2 0.8 54% 6 times Rs.14.50 90 Days

(d) Your recommendation as to whether banking facility (loan) could be granted. (based on your analysis) You may include other factors to be considered in granting the loan, in addition to the outcome in the financial analysis.

InternationalCollegeofBusinessandTechnology

MasterofBusinessAdministration(MBA)

Annexure 02 Group (4), (5) and (6) 2. Mr. Alex has already invested in 500,000 shares of Goodluck PLC. He purchased these shares at a price of Rs.100/- a share in 2009. The Directors of Goodluck PLC have initiated a private placement of shares of the Company at a price of Rs.120/- a share. The Directors of the Company have invited Mr. Alex to subscribe for 250,000 new shares of Goodluck PLC at a price of Rs.120/- a share. You are required to write a report detailing. (a) Relevant ratios you would compute to understand financial position and financial performance of the Company. (b) Why you have selected the ratios referred in (a) above. (c) Critically evaluate the financial position and financial performance of the Company from the information given below. 2009/2010 35% 21% 4.67% 21% 16% 28% 1.8 32% 2008/2009 52% 28% 27% 21% 29% 26% 1.9 37%

Gross profit ratio Net profit ratio Earnings per share (Rs.) Price Earnings ratio Dividend yield ROCE Current ratio Gearing ratio

(d) Your recommendation as to whether Mr. Alex should accept the private placement of shares.

InternationalCollegeofBusinessandTechnology