School of Accountancy

115.112 Accounting

Assignment 2

Business Financial Evaluation

Semester One 2020

Please note that this assignment is due before Friday 25 May 2020,

11 p.m. New Zealand Time

Assignment 2 will be marked out of 100 and will contribute 20% to your final grade.

Assignment 2 Instructions

This assignment is in two parts. Part A relates to the use of a computer application, Power BI for ratio analysis and visualization and Part B relates to Accounting for Maori Business. Both parts have the common theme of analyzing and communicating financial information to interested parties.

How to Approach this Assignment

• Download Power BI (Office 365) and watch the presentation “Power BI.Training”.
• Study the relevant material in the text and make sure you understand the concepts covered.

Submitting the Assignment files

• The assignment will result in 2 separate files; one Power BI file and one Word file.
• There are separate submission points for each of the files, one for the Word file and one for the Power BI file. Ensure you submit the files in the correct submission points.
• The marks and feedback files will be available in the submission point of the Word file.

Naming Convention and backups

1. Use the following naming convention for the files that you create: use your Last Name and Student ID number as the name of the file [Do not change the file extension or you (and the marker) will not be able to use the file]. For example, if your Last Name is Smith and your Student ID number is 88888888; your files will be Smith88888888.pbix and Smith88888888.docx.
2. Once you have started working on an assignment you should make backups. It pays to rename different versions of your work. A simple way to do this is to use the Save as file instruction and add a number or letter to the end of the file name. (This allows you to go back to an earlier version.)

PART A: POWER BI

Part of this assignment requires you to complete tasks using Power BI Desktop. Please follow this link to download the program. It is a free to use program:

Power BI Download

Download the ‘Microsoft Power BI Desktop’ version or the ‘Microsoft Power BI Mobile’ version, depending on what device you will be working on.

BEFORE ATTEMPTING THE ASSIGNMENT

1. Download Power BI as discussed above.
2. Download the following file from Stream under the Assignment 2 files folder and save it on your device:

Data 115-112 assignment (S1 2020).xlsx

3. Watch the MP4 presentation “POWER BI training”.
4. You can attempt requirements (i) and (ii) on your own without the Adobe Connect session.

Assignment brief

You have been hired by an investment firm, Happy Returns as a financial analyst and your manager has asked you to analyse the financial statements of the top seven U.S. technology companies. Your support person has downloaded the financial statements of the companies and extracted and summarised the data in a spreadsheet. In the spreadsheet there are the following sheets:

1. 2018 financial data (all seven companies)
2. 2019 financial data (all seven companies)
3. Apple (detailed income statements and balance sheets)
4. Alphabet (detailed income statements and balance sheets)
5. IBM (detailed income statements and balance sheets)
6. Intel (detailed income statements and balance sheets)
7. Microsoft (detailed income statements and balance sheets)
8. Texas Instruments (detailed income statements and balance sheets)
9. Amazon (detailed income statements and balance sheets)

In the 2018 and 2019 financial data sheets, there are columns for the relevant Income Statement and Balance Sheet items required for calculating the ratios.

Required:

Power BI:

1. Load the ‘2018 financial data’ sheet and ‘2019 financial data’ sheet into Power BI. Use the information in the data sheets in Power BI to calculate the following ratios for the seven companies for 2019 (See Appendix A for the formulas):

1. Profit Margin
2. Gross Profit Percentage
3. Return on Total Assets
4. Return on Equity
5. Inventory Turnover
6. Number of Days in Selling Period
7. Accounts Receivable Turnover
8. Number of Days in Collection Period
9. Current Ratio
10. Quick Ratio
11. Debt Ratio
12. Interest Coverage
13. Sales % Increase

Use the ‘New Column’ function in the ‘Data view’ in Power BI to create a new calculated column for each of the ratios.

(18 marks)

2. Present the 2019 ratios in relevant tables in your Power BI file to compare the seven technology complanies. (16 marks)

3. Create appropriate visualisations (graphs) in your Power BI file for the 2019 ratios to compare the seven technology companies. (16 marks)

Part B: ACCOUNTING INFORMATION IN MAORI BUSINESS

A member of the Tuhoe iwi, Hemi Orupe has been reading a copy of the latest TDB Report (2018) and asks for your help by providing the following:

1. An explanation of what the concept of kaitiakitanga is and how it informs the investment decisions of iwi leadership. (20 marks)

2. An explanation of what the return on assets and the return on equity reveal about the investment performance of Tuhoe in 2018. (10 marks)

3. An evaluation of what has happened to the asset base and net worth of Tuhoe over the years 2014 to 2018. Also makea comparison of this with two iwithat have a different approach.. (10 marks)

Presentation:

• The discussions needs to be presented in the form af a report (Refer Appendix C).
• Answers should be well reasoned, comprehensive and include data from the financial data of the relevant iwi.
• Your answers for (i) to (iii) should range from 800 to 1,000 words, in total.
• Do not copy the tables and graphs from the TDB report into the Word document as part of you dicussions.
• References are not required.
• Do not include the question or marking template in your Word file.

(10 marks)

APPENDIX A: ANALYSIS RATIOS FOR USE WITH CUNNINGHAM

	TYPE OF RATIO	REFERENCE
	PROFITABILITY	Chapter/ Page
1	Profit Margin	Ch. 7 p.294 (293)	Net Income x 100 Net Sales
2	Gross Profit Percentage	Ch. 7 p.294 (293)	Gross Profit x 100 Net Sales
3	Return on Total Assets	Ch.8 p.344 (343)	(Net Income + Interest Expense) x 100 Average Total Assets
4	Return on Owner’s Equity	Ch.8 p.345 (344)	Net Income x 100 Average Owner’s Equity
	EFFICIENCY
5	Inventory Turnover	Ch. 8 p.346 (345)	Cost of Goods Sold Average Inventory
6	Number of Days in Selling Period	Ch. 8 p.347 (346)	365 Inventory Turnover
7	Accounts Receivable Turnover ‘assume all sales are credit sales’	Ch. 8 p.348 (347)	Net Credit Sales Average Accounts Receivable
8	Number of Days in Collection Period	Ch.8 p.349 (347)	365 Accounts Receivable Turnover
	LIQUIDITY
9	Current Ratio	Ch. 8 p.338 (337)	Current Assets Current Liabilities
10	Quick Ratio	Ch.8 p.339 (338)	Quick Assets Current Liabilities Where Quick Assets = Cash + Accounts Receivable + Short Term Marketable Securities + Short Term Notes Receivable
	FINANCIAL GEARING
11	Debt Ratio	Ch. 8 p.341 (339)	Total Liabilities x 100 Total Assets
12	Interest Coverage	Not in text	Net Income + Interest Expense Interest Expense
	OTHER
13	Sales % Increase	Not in text	(Sales Year 2 – Sales Year 1) x 100 Sales Year 1

(2 edition in brackets)

Appendix B: Marking Grid

Part A					Max Mark
Calculation of ratios (i)	Marks allocated to ratios calculated in Power BI. If a substantial part of workings are correct, part marks may be awarded.	18
Table(s) of the ratios in (ii)	Marks allocated for the tables prepared in Power BI. The tables have to appropriately express profitability, efficiency, liquidity and financial gearing. The presentation of tables will also be evaluated.	16
Visualations of the ratios in (iii)	Marks allocated for the visualisations prepared in Power BI. The visualisations have to appropriately express profitability, efficiency, liquidity and financial gearing. The presentation of visualisations will also be evaluated	16
Total					50

Part B Qualities	Fail	C Pass	B Pass	A Pass	Max Mark
Presentation and Report format- including Introduction and Conclusion	Does not present ideas clearly. No structure 0-3	Presents ideas in a clear manner. Report has structure 4-5	Presentation of ideas is achieved clearly in a coherent, fluent manner. Report is well structured 6-7	Presentation of ideas has impact. Report is well structured8-10	10
Addressing requirement (i) Kaitiaitanga	Work does not address the assignment brief or the focus is very inadequate. 0-9	Work makes some relevant points but is not adequately focused on the assignment brief 10-12	Work displays an understanding of the brief and provides a range of relevant evidence in answering it. 13-15	Work which engages closely with the assignment brief and addresses its implications as well as its “surface sense” 16-20	20
Addressing requirement (ii) ROA and ROE	Work does not address the assignment brief or the focus is very inadequate. 0-3	Work makes some relevant points but is not adequately focused on the assignment brief 4-5	Work displays an understanding of the brief and provides a range of relevant evidence in answering it. 6-7	Work which engages closely with the assignment brief and addresses its implications as well as its “surface sense” 8-10	10
Addressing requirement (iii) Asset Base and Net worth	Work does not address the assignment brief or the focus is very inadequate. 0-3	Work makes some relevant points but is not adequately focused on the assignment brief 4-5	Work displays an understanding of the brief and provides a range of relevant evidence in answering it. 6-7	Work which engages closely with the assignment brief and addresses its implications as well as its “surface sense” 8-10	10
Total					50

Appendix C: REPORT FORMAT

Note that the report must include:

• Heading (To, From, Date, Re)

The following is an example of a basic report structure(to follow the heading):

Introduction

1. identify subject, context and specific problem.
2. define specific objectives.

Discussion/Analysis

1. sub-divide into logical units.

2. use headings and arrange into logical sequence.
3. present evidence to support conclusions.
4. focus on objectives (the specific problem).

Conclusions/Recommendations

1. relate to objectives.
2. follow from facts.

(Extract from Emerson, L. (1998) Report Writing, p. 2. Student Learning Centre, Massey University.)

Assignment Queries

Please feel free to keep in touch with the 115.112 team regarding this assignment, preferably through the Assignment 2 forum. That way all students benefit and often we have found that the best way of learning is through discussion with your peers as well as teaching staff.

Please note that this assignment is at individual, not group level. Discussion is fine but do not post your answers to the assignment on STREAM through discussion forums, as that will lead to penalties. If you are uncertain, please contact the teaching staff.

There are a large number of students in this paper, but that does not mean that you are not each individually very important to us. We value each student and will try to provide appropriate guidance to the best of our ability.

Assignment submission

On the Assessments page on Stream there is a submission point for Part A and another for Part B. Follow the prompts. STREAM records the submission date and time. See the Course Guide for policies re extensions and late submissions. Penalties will be applied to late submissions for which an extension has not been granted, but note below the cut off time of a week after the due date.

Return of marked assignments

You will be informed when your marks are available. A break-down of the mark will be given on a marking sheet will be available at the same point as where you uploaded your assignment. Note that the normal turnaround of assignments is three working weeks. However we will be working to return the assignment sooner than that.

There will be feedback in the form of suggested solutions and overall comments by the marker.

All the best with your assignment!

The 115.112 Teaching Team

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