International Accounting and Finance Issues Accounting, Finance Essay (Other (Not Listed) Sample)
ACFI3424 International Accounting and Finance Issues Coursework 1 – 2017/18 Individual Assignment in report format
The assignment must be submitted via Blackboard using the Turnitin button by Week 23 (Deadline: Wednesday 7 March 2018 by 23.59) (Please note that Turnitin can only accept one document as your submission)
This assignment is designed to give you an opportunity to develop written communication skills whilst working with international accounting and finance issues.
The total length of the assignment should not exceed 3,000 words (excluding appendices and list of references). This word limit is the maximum and you will be penalised if you exceed it. You should state the word count on the front page of your report.
The report should be word-processed in Arial Font size 12 at 1.5 spacing and double sided. Required: You should write answers to each of a), b), c) as three parts of a single report to the non-financial directors of Petrochina, using the 2016 Annual Report (English version) as a resource: a)Analyse the 2016 Petrochina financial statements in terms of profitability, performance, liquidity, working capital and long term solvency, comparing the results with 2015. You should use the attached Petrochina group financial statements. (Indicative 1,000 words maximum) (30% weighting). b)“Independent audit (also known as external audit) of companies is an important part of confidence and assurance”. Explain and discuss this statement using academic references and evidence from Petrochina as appropriate. (Indicative 1,000 words maximum) (30%). c)To what extent did the financial crisis in 2007/2008 affect businesses globally? What lessons can be learned from this crisis for global companies such as Petrochina? (Indicative 1,000 words maximum) (30%). 10% weighting for presentation, report format and referencing using the Harvard system.
For basic report structure at DMU see: http://www.library.dmu.ac.uk/Support/Heat/index.php?page=483
For part a) please use the ratio calculation methods per the lectures and Scott – Accounting for Business. The ratios should be included in the text with the calculations in an appendix. Indicative Feedback Form Coursework 1 Individual Assignment Student number P Requirement % Fail 3rd 2:2 2:1 First Analysis of Petrochina profitability, performance, liquidity, working capital and long term solvency. (Ratios and discussion). 30 Explanation and discussion of independent audit. 30 Discussion of effects of the 2007/08 global financial crisis and lessons to be learned. 30 Presentation including correct format, list of references and in-text references. 10 Comments Areas of strength Areas needing improvement Actions to improve academic performance Penalties for late submission or exceeding the word count Overall Grade Plagiarism score checked (please tick and give score if more than 30%) The allocation of marks is based on: 90-100% Judged to be outstanding in a
Assignment Guidance for ACFI3424 Posted on: Monday, 5 February 2018 17:30:00 o'clock GMT Dear Students, I have seen several students about the assignment and here is a summary of the main points raised so far: It is a REPORT to the non-financial directors of Petrochina. These directors are, for example, the Marketing Director and the HR Director. They do not understand finance very well. So you have to avoid being over-technical and try to explain things simply in your own words. Use REPORT FORMAT: 1. A title page - Individual Assignment. Report to the Non-Financial Directors of Petrochina. Your student number. The word count. 2. An executive summary of the whole report (200 words approx) 3. A contents page 4. Part A 5. Part B 6. Part C 7. List of references 8. Appendices Points raised on part A: No need to cover EFFICIENCY as not asked for. Suggest two ratios for each area of analysis. Suggest identifying how much the ratio has changed since 2015 (more than a 5% change is MATERIAL). If the ratio in 2015 was 5% and the ratio in 2016 is 4% the % change is 20%! Suggest looking at another company (see BP and Sinopec in the Tutorial materials for weeks 2-15) and doing one or two key ratios for comparison. Suggest at the beginning of Part A doing a general "how have things gone" before getting into too much detail. EPS given and no calculation is needed. For PE ratio you need to look up the latest share price. Try to suggest why each ratio has improved or got worst or stayed the same. See Scott or the lecture handouts and FOLLOW THE RATIO CALCULATIONS there. Do a table of ratios in the report (put the workings in an appendix) but it is the analysis that really gets the good marks. You cannot easily do GROSS PROFIT % so leave it out. Use purchases for payables and inventory days as COST OF SALES is not given. Points raised on Part B Define independent audit (see the Porter diagram from Week 5 Lecture and the lecture handout and text books). Do NOT do INTERNAL AUDIT. Explain what confidence and assurance are about. Discuss whether Independent audit gives confidence and assurance to users? Look at both sides as there is plenty of literature that suggests audit is not very useful - see AUDIT EXPECTATIONS GAP. Try to link your comments to the audit report of Petrochina. Points on Part C: Albert is the best person to advise on this section. We are always happy to answer questions in our surgery hours. Best wishes, Dr John
Assignment guidance Part 2 Posted on: Thursday, 8 February 2018 17:26:07 o'clock GMT Dear Students, Thanks to one student for pointing out that on pages 176 and 177 of the PETROCHINA annual report there is a detail of cost of sales that can be used to calculate Gross profit and Inventory days and Payables days. You may incorporate this into your analysis if you wish but students will not be penalized if they use my previous advice. Regards, Dr John
Assignment guidance Posted on: Monday, 19 February 2018 15:56:48 o'clock GMT 1. Word limit. The word count does not include the executive summary, contents page, appendices or the list of references. The executive summary should be no more than 300 words. 2. References. Work must be referenced using the guide to Harvard referencing from the earlier lecture. Turnitin will not be happy if you do not reference properly and this could lead to an academic offence. If you have any doubts please see Dr John. I recommend that you refer to all the course text books (Scott, Roberts and Buckley) and the reference on audit by Porter et al from the relevant lecture. I would suggest at least one other reference for both parts B and C. You must reference to the Petrochina annual report (and any other company used) - see their websites. If you refer to a website like Investopedia you must reference this too. 3. For the P/E ratio I recommend using the Shanghai Stock Exchange share price of Petrochina at 31 Dec 2015 and 31 Dec 2016. Use the EPS from the financial statements - no calculation needed. You can use PE ratios that you find online but you must reference to the source. Remember that you cannot compare the EPS of two companies but you can compare P/E and EPS growth. 4. Performance ratios generally are used by investors to decide whether to BUY - HOLD - SELL. 5. Presentation - remember that only one document in Word can be submitted on Turnitin. Please have a new page for parts A, B and C and make it very clear so that markers can locate the relevant part. 6. Credit sales - you can assume that all revenues are credit sales. 7. Cost of sales - if you are using the earlier announcement please use Group figures. 8. Long term borrowings in BP are called Finance Debt in non-current liabilities. 9. Do not forget to include page numbers!! Best wishes, Dr John
Assignment advice - Petrochina in the news Posted on: Thursday, 22 February 2018 15:10:48 o'clock GMThttps://m.economictimes.com/markets/stocks/news/biggest-stock-collapse-in-world-history-has-no-end-in-sight/articleshow/61331347.cmsGoogling this morning found this October 2017 article about Petrochina. I think that you should look at this as background on the company is always useful. It is also good on PE ratios. Dr John
Assignment Advice _Part C Posted on: Monday, 5 March 2018 10:10:52 o'clock GMT Dear students, Provide as introduction of the causes of the 2007/08 financial crisis. For instance, the causes include low interest rate, easy credit, lax regulation and many more (please refer to week 19 lecture notes and week 20 seminar materials for additional information on this). The next issues that must be discussed are the impacts of the financial crisis. These include difficulty in obtaining credit, investor losses, collapse of firms, low productivity by businesses, low demand for products from businesses, etc The next stage is to describe the lessons firms including Petrochina learnt from the financial crisis. These lessons include diversification of investments, proper regulation of the financial industry, etc. (This article in the financial times could be of help - https://www.ft.com/content/e49dce3c-8d97-11e7-9084-d0c17942ba93). You can also discuss how derivatives could be used to reduce credit risk (especially when you look at the gearing and borrowings of Petrochina) – See this article (https://m.economictimes.com/markets/stocks/news/biggest-stock-collapse-in-world-history-has-no-end-in-sight/articleshow/61331347.cms) Please note that all your discussions should be related to 2007/08 financial crisis. Also, note that these directors are not financial (rather marketing or HR for example) and so the report should be non-technical if possible. Thank you. Albert
Part A: Ratio Analysis
Financial analysts use a wide range of financial analytical tools, as well as techniques to determine the financial strength, as well as weakness of firms. The information derived from such financial analysis is critical for use in decision making within the firms. Financial ratio analysis provides a fundamental platform through which such information as the value, as well as financial performance of a firm can be assessed. For the purpose of this analysis, the financial ratios of PetroChina Company Limited for the years 2015 and 2016 will be analyzed with the aim of analyzing any changes that can be considered to have occurred, while coming up with the reasons behind some of the changes. Ratio analysis entails an evaluation of the financial ratios of the firm using the information that is presented in the company’s financial statements.
For PetroChina, the financial ratios that can be used for evaluation are as follows:
Note: All the calculations are in the attached Excel Spreadsheet and are consolidated into a single table depicted in Table 1 in the Appendix section of the review.
The profitability ratios used in this analysis are as follows:
* Net profit margin = Net income/Net revenue
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