FINANCE AND PERFORMANCE MANAGEMENT

A recurring theme of this module has been the value of data to analysis and decision-making. You have utilised various types of data while

conducting several analyses in the Individual Assignments Submission submitted in Units 2-5.

In this final unit, you will synthesise what you have learned about financial and performance management throughout the module. Recall the words

from Anthony’s Orchard CEO Bob Frost in Unit 2:

We are excited about our future, and have aggressive plans for it. Among these plans is expansion into a new product line. We hope to be

producing and distributing Anthony’s Orchard apple juice within the next 3 to 5 years.
As your Final Project for this module, you will create a consultancy report that will provide guidance and insight to company management

regarding this decision. Relying on the work done in previous Individual Assignments Submission, you will make a recommendation to the company

regarding the plan to expand the product line and make a significant investment in an apple press required for that expansion.

To prepare for this Individual Assignment:

Reflect on the work you submitted in the Individual Assignments Submission of Units 2-5. Review the feedback you received from your Faculty

Member.
Review the Final Project guidelines by clicking on Final Project on the Module Menu.
To complete this Individual Assignment:

Develop the ‘Executive Summary’ and Section 5, ‘Summary, Recommendations and Conclusion’, which includes your formal recommendation to the

company. Refine Sections 1-4 (based on the Individual Assignments Submission in Units 2-5).
Compile the final consultancy report, and submit to your Faculty Member based on the Final Project Guidelines.
Submit in one Word document the Executive Summary, Sections 1-5, and Appendices and Resources to the Final

As your Final Project for Financial and Performance Management, you will prepare and submit a consultancy report to the management of Anthony’s

Orchard, the company studied throughout this module. The company is considering expanding its product line to include apple juice. This

expansion would require a significant investment in a piece of equipment known as an apple press. Your Final Project submission analyses this

decision, and provides to company management a recommendation based on your analysis.

The consultancy report should contain five distinct sections, plus an executive summary, that in total equate to 5,000 words (+/- 10%) in

length. Necessary Appendices and a References section should also be included. Throughout this module, you will develop various sections of this

report through your work on Individual Assignments (IAs). During Unit 6, you will compile these sections and make any refinements based on

feedback received from your Faculty Member. You will also develop the additional sections required to complete and submit the Final Project.

Contents:

Your consultancy report should include the following sections:

Executive summary
Section 1: Financial Analysis
Section 2: Analysis of the Investment
Section 3: Developing a Balanced Scorecard
Section 4: Assessing Benchmarking Efforts
Section 5: Summary, Recommendations and Conclusion
Executive Summary (New)

In this section, you introduce the nature and purpose of your study. Summarise your study and its objectives, and briefly state your

recommendations.

Section 1: Financial Analysis (Overview of the given case study organisation and its current financial situation) (Unit 2)

In this section, refine the assignment you completed in Unit 2, an analysis of the current financial health of the company. Using data provided,

assess materials and labor costs, the income statement, the cash flow statement and each of the business units in Anthony’s Orchard.

Additionally, conduct a cost-volume-profit (C-V-P) analysis of the current year’s financials.

Section 2: Analysis of the Investment (Future capital investment opportunities and strategic financial plan) (Unit 3)

In this section, refine the assignment you completed in Unit 3, an analysis of the proposed investment in an apple press. Consider the impact

this investment has on the company’s stated revenue objectives, and draft projected financial statements that provide a realistic assessment of

expected revenues and costs.

Section 3: Developing a Balanced Scorecard (Balanced Scorecard and performance indicators) (Unit 4)

In this section, refine the assignment you completed in Unit 4, an analysis and projection of various performance measures for Anthony’s

Orchard. Develop a Balanced Scorecard (BSC) for the company to measure financial, customer, internal process and learning/growth performance.

Add to this your opinion of any effects on organisational performance that may emerge as a result of expanding the product line.

Section 4: Assessing Benchmarking Efforts (Gap analysis and benchmarking, including quality assurance techniques (Unit 5)
In this section, refine the assignment you completed in Unit 5, an analysis of various quality measures for Anthony’s Orchard. Conduct a gap

analysis and provide recommendations for the development of benchmarking efforts.

Section 5: Summary, Recommendations and Conclusion (New)

In this section, present your recommendations in more detail than you did in Section 1. Include your final recommendation to the management of

Anthony’s Orchard regarding the expansion of the product line to include apple juice and the requisite purchase of the apple press. Present your

reasoning for your position, and include any subsidiary recommendations you may wish to make (such as additional performance or quality efforts

suggested) in support of your primary recommendation. Reiterate any assumptions you made.

Appendices (New)

Include any supporting documentation you feel is required in this section. This may include organisational data, historical information,

additional information on tools or any other information that would be pertinent in support of your proposed solution.

References (Units 2-5)

In the Individual Assignments submitted in Units 2-5, you submit references to any sources of information or readings that you refer to in your

analyses. In this section of your report, include these references. Be sure to make appropriate use of the Harvard Referencing Style.

Additional Guidance:

A recurring theme of this module is the value of data to decision-making. Be mindful that your audience for this consultancy report is the

management of Anthony’s Orchard. The work you submit here should a useful tool to the organisation while it considers the idea proposed by

company CEO Bob Frost in the media piece presented in Unit 2—the production and distribution of Anthony’s Orchard apple juice within the next 3

to 5 years. Your consultancy report should be well thought-out, and developed in a manner that provides insight and guidance.

Project Part 1 submission link in the Final Project area of the Module Menu.
Submit the PPDP update to the Final Project Part 2 submission link in the Final Project area of the Module Menu.

A recurring theme of this module has been the value of data to analysis and decision-making. You have utilised various types of data while

conducting several analyses in the Individual Assignments Submission submitted in Units 2-5.

In this final unit, you will synthesise what you have learned about financial and performance management throughout the module. Recall the words

from Anthony’s Orchard CEO Bob Frost in Unit 2:

We are excited about our future, and have aggressive plans for it. Among these plans is expansion into a new product line. We hope to be

producing and distributing Anthony’s Orchard apple juice within the next 3 to 5 years.
As your Final Project for this module, you will create a consultancy report that will provide guidance and insight to company management

regarding this decision. Relying on the work done in previous Individual Assignments Submission, you will make a recommendation to the company

regarding the plan to expand the product line and make a significant investment in an apple press required for that expansion.

To prepare for this Individual Assignment:

Reflect on the work you submitted in the Individual Assignments Submission of Units 2-5. Review the feedback you received from your Faculty

Member.
Review the Final Project guidelines by clicking on Final Project on the Module Menu.
To complete this Individual Assignment:

Develop the ‘Executive Summary’ and Section 5, ‘Summary, Recommendations and Conclusion’, which includes your formal recommendation to the

company. Refine Sections 1-4 (based on the Individual Assignments Submission in Units 2-5).
Compile the final consultancy report, and submit to your Faculty Member based on the Final Project Guidelines.
Submit in one Word document the Executive Summary, Sections 1-5, and Appendices and Resources to the Final Project Part 1 submission link in the

Final Project area of the Module Menu.
Submit the PPDP update to the Final Project Part 2 submission link in the Final Project area of the Module Menu.

Topic: Financial and Performance Management

Complete the following: Jayantha commenced business on 1 January 2010 with equity of £100,000. During the year ending 31 December 2010, he paid

£92,400 for purchasing goods for sale (all of which was sold) and £31,450 for various expenses. He received £139,250 by sale of goods. Jayantha

has drawn £12,000 in cash and introduced a motor car to the business valued at £10,000. What is Jayantha’s equity at 31 December 2010?
Solution: £115,400
The following information relates to Simonson Engineering as at 30 September 2010: £
Plant and machinery 25,000
Trade payables 18,000
Short-term borrowings 26,000
Inventories 45,000
Property 72,000
Long-term borrowings 51,000
Trade receivables 48,000
Equity at 1 October 2009 117,500
Cash in hand 1,500
Motor vehicles 15,000
Fixtures and fittings 9,000
Profit for the year to 30 September 2010 18,000
Drawings for the year to 30 September 2010 15,000
Using this information, prepare a statement of financial position for the business using the standard layout illustrated in Example 2.5 on p.48

of Atrill, P., & E. McLaney, (2011) Accounting and Finance for Non-Specialists, 7th edition, Harlow: FT/Prentice Hall.
STATEMENT OF FINANCIAL POSITION

An accountant prepared a statement of financial position for a business. In this statement, the equity of the owner was shown next to the

liabilities. This confused the owner, who argued: ‘My equity is my major asset and so should be shown as an asset on the statement of financial

position’. How would you explain this misunderstanding to the owner?
Assets are the not equity, liabilities are the outsiders or third party’s claim into the business, and below it is equity, representing the

owner’s claim into the enterprise.
The statement of financial position shows how much a business is worth. Do you agree with this statement? Explain the reasons for your response.
I agree, it shows the business worth as at the specified dates. Total assets represents the total business financial position.
Compute the missing amount in the accounting equation for each business. Name of business Assets Liabilities Equity
Hudson Gift and Cards 37,000 35,000
2000
New Street Garage 85,000 39,000
46000
Hair Styles 92,000 53,000
39000
At the year end, the total assets of a business were £189,000 and the total liabilities were £126,000. During the year, the owner withdrew

£10,000 and introduced a further £18,000 in equity. The business began the year with total assets £180,000 and total liabilities of £112,000.

What is the profit (loss) for the year? £8,000 (profit) £13,000 (loss) £8,000 (loss) £13,000 (profit)

A company that produces a single product provides the following information: budgeted sales of 40,000 units, margin of safety 25% of budgeted

sales, total fixed costs £240,000. What is the contribution per unit of the company’s product?
x_be=75% of 40000=30000 units=(fixed cost)/(contribution margin)=240000/CM,CM=$8
A business makes 2,000 units of a particular product. It spent £24,000 on material and it paid its operatives £40,000. Fixed costs of running

the factory were £50,000. The salesforce were also paid £18,000 and the head office costs were £100,000. In order to break even the selling

price per unit will have to be:
total variable cost=total direct labour+total direct material
=24000+40000
=$64000
variable unit cost= (total variable cost)/(units produced)=$64000/(2000 units)=$32 per unit
Variable cost per unit= 12+20= $32
2000(sp-32)=168000
2000sp-64000=168000
2000sp=232000
sp=$116

WE ACCEPT