Business Computing - Assignment 2

PGP 22 – 2018
Submit by , 4/8/2018, 10 PM Marks – 34 Marks

This assignment is an individual exercise and you are expected to complete this on your own
without any consultation

File submission instruction

Put your Roll Numbers in the space indicated in the workbook (top Left of the first sheet) Name the
solution file as RollNo_PGP22-BC_A2 (eg. 000_PGP22-BC_A2)

Note: Use the formulas and features covered in class so far (including the chapters covered in
the syllabus till session 8).

Download the workbook Data_BC22_Assignment2.xlsx for the following exercises from VC .

Create a copy of the original worksheet before starting with question 1 and name each worksheet you
create based on the corresponding question nos you are answering in each worksheet. For example, if
the worksheet has answer to questions 1 and 2 name the worksheet as Q.1_Q.2, if it has answers to
Q,3,4,5 then name it Q.3_Q.4_Q.5 and so on. You can use the worksheet you used for answering one
question to answer another question by making a duplicate copy of the worksheet. For example, you will
use the Q.1_Q.2 worksheet, make a copy of the worksheet, name it Q.3_Q.4 to answer Q.3 and Q.4 in the
same worksheet.

IMPORTANT: This assignment is to evaluate the topics addressed so far, use of other features and
functions to respond to the questions will be ignored.

Create a copy of the main data sheet1 and rename it as data sheet1 perform the following:

A. As an international sporting goods company, TheSappers maintains some of its own retail outlets.
However, the most significant part of the company’s sales comes from selling large quantities of sporting
goods equipment and apparel to other retailers and large organizations, such as school systems and
athletic teams. Most companies, like TheSappers, have processes in place to determine the
creditworthiness of potential customers before entering into business relationships with them. These
processes ensure that the company’s accounts receivable group is able to collect payments from
customers in a timely manner.

The account receivable group at TheSappers performs many vital tasks that affect the success of the
company. The data this group provides during the credit approval process has a direct impact on the cash
flow and financial stability of the company. This process includes obtaining financial data for new and
existing customers and determining the current credit status of each customer’s account. These tasks are
ongoing and can be challenging because of customers’ changing statuses and the variability of economic
conditions.

Shruti is an accountant working in the accounts receivable group at TheSappers. She has been asked to
develop a formal system to streamline and automate the credit approval process. Eventually, the
information compiled will be given to the finance group for final analysis and credit approval. The finance
group is responsible for making the ultimate decisions, factoring in the effects these decisions will have
on corporate profitability, customer relations, adherence to government regulations, and so on.

The internal data, such as a customer’s purchasing and payment history with TS, is available from TS’s
corporate accounting system. Shruti plans to use Dun & Bradstreet Inc’s services (a financial reporting
service) to obtain values on the net worth of companies requesting credit, a company’s credit rating and
a company’s payment record, as follows:

 The net worth of a company is based on the assets and liabilities listed on its balance sheet
 The credit rating consists of two parts. The first is a rating classification that ranges from 5A
(50,000,000 and over) to HH (Upto 4,999), indicating the net worth category of the company. The
second is the composite credit appraisal that uses a value from 1 to 4 where 1 is the best, and 4
is the worst. The value represents D&B’s determination of the company’s risk factors that affect
its ability to pay its bills.
 The PAYDEX® score is an indicator of the payment habits of the company (100-Payment received
prior to date of invoice -90-80-70-60-50-40-30-20-Payment received 120 days beyond terms,UN-
unavailable)
 The financial stress risk class indicates the potential of a company ending up in financial distress
using a rating from 1 to 5, where 1 represents businesses with the lowest probability of risk.

The Sappers’s credit determination rules are as follows:

Rule #1: Accept a customer that has a past due balance that is less than 10% of this year’s total sales. This
rule does not apply to new customers. The customer who has a past due balance of 10% or more of this
year’s sales, regardless of its financial stability, has failed to consistently pay its bills and, therefore, has
not demonstrated a satisfactory business relationship. A customer without such a past due balance
demonstrates creditworthiness.

Rule #2: Accept a customer that has either a composite credit appraisal value of 1 or a PAYDEX (Indicator
of payment habits of a company) score over 90. These values indicate a strong, financially stable
enterprise with an outstanding reputation for paying its bills on time.

Rule #3: Accept a customer that has all of the following: a net worth (to remove clutter net worth value
in the datasheet is in 1000’s) of at least $500,000; a composite credit appraisal value of 2 or lower; a
PAYDEX score over 70; and a stress risk class of 1. These values indicate that the customer has a good
overall financial position, a reasonable level of risk, and a reputation for paying its creditors.

1. For each of the three rules- Rule1, Rule2 and Rule3 listed above use conditional formatting to
highlight the rows with 6.25% Gray polka dot pattern (for Rule 1)(check under Format>Fill>Pattern
Style), Bold Italics (for Rule 2) and any shade of orange (for Rule 3). (3)
 2. However since there were some overlapping conditions some rows had at least two rules applied.
Find a way so that you see the specified format of the last rule (Rule 3) ignoring any other formats
that may be overlapping with this rule. (3)
3. a) You would also like to have two different cells (O10 and P10) where you can choose either of
the credit criteria (net worth, credit rating, credit appraisal or Paydex (columns F-J)) in cell O10
and the customer name in cell P10. Based on your selection the intersection of the two values
entered in O10 and P10 will be highlighted with a black background and white text. This will adjust
if you change your selection in O10 and P10. (3)
b) Ensure that O10 and P10 are validated so no other values can be entered and would give an
error message that does stop and restrict entry of any other value (choose appropriate error
option). Put the title as “Entry Error” and the message as “Enter Valid Data”. (3)

Work on the second data sheet (Main Data Sheet2) for the next set of exercises

B. Shruti wants to look at several schemes for applying penalties to those accounts with past due
balances. TheSappers is considering several alternatives in an effort to discourage late payments and cut
down on interest expenses. At the same time, any alternative selected must take into consideration how
it could affect sales and customer relations.

A penalty surcharge has been suggested under certain circumstances as follows:

 If the 90-days past due amount is greater than $200, then an additional surcharge will be imposed
of either $100 or 10% of the 90-days past due balance, whichever is higher

 If the 90 days past due amount is not greater than $200, then no additional surcharge will be
imposed, and a value of $0 should be displayed.

Another penalty scheme under consideration to discourage customers from being delinquent in paying
their bills is to charge a different monthly penalty depending on how late the payments are. This penalty
could be used instead of the previously calculated surcharge. This penalty would work as follows:

 Customers that have balances of 90-days past due would be charged a $100 flat fee

 Customers that have no 90-days past due balance but have a 60-days past due balance would be
charged $50 flat fee.

 Customers that have only a 30-days past due balance would be charged a $25 flat fee

 Customers that have no past due balance would not be charged a penalty fee.

Perform the following :

IMPORTANT: Take the values to be included in the formula(s) from cell references. You can move the
dataset few rows down to create space for the cells your formula will refer to. Label the cells that your
formula will refer to clearly to indicate what do they stand for.

4. Check for any duplicates in the dataset and remove those. (1)
5. Ensure that no duplicates are allowed to be entered in the column ‘Customer Name’. If any
duplicate are entered, then there will be a warning message (It may still allow the entry). Put the
message and title as “No duplicates allowed”. (2)
 6. In an additional column (column H) Penalty Surcharge-I write down a formula for charging as per
the first alternative mentioned above. (3)

7. Calculate in another column (column I) ‘Penalty surcharge-II’ as per ‘another penalty scheme’
mentioned above. (3)

You may use the following as a template for the cell references for Q.6 and 7:

8. You would like to add a field named ‘Credit Status’ in column J that would allow you to enter
either ‘Approved’ or ‘Denied’. Ensure that no other data can be entered in this column with the
message to be shown as “Only enter Approved/Denied” if any other, values are entered in the
column M. (2)
9. Finally you would like to have a visual way of assessing the past due balance of all customers with
databars. Apply data bars to the past due balances (Column G) where you would like the bars to
extend between the 20th and 60th percent. Since these are outstanding amounts you would like
to have the databars coloured in red. (2)

Create a copy of the main data sheet 1 before proceeding to the next section and name it as data sheet 3.
Create separate sheets for the following questions and name it as Q_10 , Q_11 etc.

10. Sort the data as per the following criteria:

a. customer name in ascending order;
b. past due balance, previous year’s sale, current year’s sale in descending order; and
c. D&B credit ratings in the order 5A,3A,1A,BB,BA,CB,4A,1A.
(3)
11. Create a report for customers that are in the top 5% credit limit. (1)
12. Create a report for customers that have above average Current Year Sales, Networth of between
2000-15000 and Paydex score that is not less than 90. (2)
13. Create a report for all customers that have current credit limit as greater than 9000, previous
year’s sales as greater than 50,000, past due balance is less than current year’s sales and stress
risk class is less than 3. The report should only include the Customer Name and Net Worth.
(3)