Westminster Business School

7FNCE048W Commercial Lending

Individual Coursework

Assessment weighting: 25%

Submission date: Monday 18th March 2024 by 13:00 UK time (via Blackboard)
Provisional marks and feedback: Monday 8th April 2024 (via Blackboard)

Case study – a consumer goods corporation: ABC PLC

ABC PLC had a turnover from continuing operations for the year ended 31 March 2024 of £5.5
million with a profit before tax of £0.3 million. For the ensuing year, the forecast is to achieve a
turnover of £6.4 million and probably a further, modest, profit. The balance sheet for this
lending exercise is as follows:

ABC PLC Balance sheet Forecast on 31 March 2025 (£ million)

Intangible (goodwill etc.) 0.8
Tangible 4
Fixed assets 4.8
Trade debtors 2.6
Less trade creditors -1.3
1.3
Stocks 2.2
Cash on deposit 1.4
Borrowings: short term -0.2
Other balances (net) -1.4
Net current assets 3.3
Provisions & liabilities -0.4
Shareholders’ funds 7.7

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Required:
ABC PLC has been granted the opportunity to acquire the rights to a number of brand names
and increase its coverage in the sector. The purchase comprises a division of the vendor’s
operations and, as such, no separate profit and loss account and balance sheet are available, but
it is estimated that for the first year the division may attain a break-even point on trading,
excluding any acquisition costs.
The deal will therefore be the purchase of the relevant assets relating to the brands being sold. The
agreed purchase price is £4.6 million, made up as goodwill £1.4 million, brand names £2 million,
tangible fixed assets £0.4 million and stock £0.8 million. Deferred payment terms apply to £0.8
million of the purchase price, but cash of £3.8 million is required now to complete the deal.

As a banker to the ABC PLC, you are asked to provide finance. Do you comply with this
request, for what amount, and on what terms? This is the first opportunity to offer a sizeable
loan to the company.

General instructions to students:

• Your coursework should be produced in Word or PDF format.
• Word limited is 1,000 words (+/- 10%)

To submit your assignment:

• Log on to Blackboard at http://learning.westminster.ac.uk
• Go to the relevant module Blackboard site
• Click on the “Assessments” folder, and then submit coursework link
• Follow the instructions

Remember:
• Your work will automatically be scanned through a text matching system (designed to
check for possible plagiarism)

• If you submit your coursework late but within 24 hours or one working day of the
specified deadline, 10% of the overall marks available for that element of assessment
will be deducted, as a penalty for late submission, except for work which is marked in
the range 50 – 59%, in which case the mark will be capped at the pass mark (50%)

• If you submit your coursework more than 24 hours or more than one working day
after the specified deadline you will be given a mark of zero for the work in question

• The University’s mitigating circumstances procedures relating to the non-submission

or late submission of coursework apply to all coursework

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