Module Learning Outcomes being assessed:

Knowledge and understanding

a) Demonstrate an understanding of financial reporting and management

accounting concepts, terms, and techniques

b) Analyse and interpret financial statements and managerial accounting reports

Skills, Qualities and Attributes

f) Read and understand the financial statements of different types of companies

g) Select and apply techniques of financial statement analysis within the decision-
making process

h) Evaluate and interpret the results of your analysis

Assessment weighting
Written assignment of 2000 words.
IMPORTANT GUIDANCE
 This assessment is designed to assess the learning outcomes and knowledge
of the module on Management In Organisations.
 The assessment is to be written in the form of a Business Report.
 Word Count: The absolute maximum word count for this report is 2,000
words. There is no safety margin of +10%
 Due Date: 7th April 2024
 Submission: To the Drop Box by 11 p.m. on the due date above.
 Read and familiarize yourself with the case study, critically evaluating it
based on the topics you have studied on the module.
 Note that the case is purely fictional and may appear exaggerated. The
matters raised within the case study are, however, similar to those you may
encounter somewhat in your work and work experience. As in real life,
anomalies and a level of ambiguity may be found in the information within
this case study. Please state any assumptions, where necessary, when
answering tasks.
 Honesty and Integrity: We expect you to act with integrity in undertaking
this assessment in line with the Student Code of Conduct and the Academic
Irregularities Policy. All submissions will be submitted to Turnitin for
originality checking which includes checking against all other students’
work.
 You should NOT therefore:
o Copy and paste text from any source without referencing it.

o Collaborate with others in completing the assessment.

o Share any aspect of your work (e.g. notes, calculations, answers,

sources) with other students by screenshare, social media, telephone,
or email.
 The copying of pre-prepared 'group' answers or notes including those written
by consultants/tutors, or by any third party, or even copying or
paraphrasing your own work if you have submitted it elsewhere (without
acknowledging the fact) is strictly forbidden. Undertake your work in line
with the expectations set out in the NTU Student Charter, NTU Student
Code of Behaviour and the NTU Academic Irregularities Policy. This can
lead to plagiarism, collusions, cheating and/or other academic offences set
out in Section 17c of the University Quality Handbook. Please use this link:
QUALITY HANDBOOK SECTION 17C: ACADEMIC IRREGULARITIES
 Familiarise yourself with the provisions of Section 17c of the Quality
Handbook on Academic Irregularities. Pleading ignorance of the NTU
 plagiarism rules will not be a defence against poor academic practice so
please read up!
 Use a range of appropriate tools for analysing and discussing the main
aspects of the case study and to demonstrate your understanding of the
case study and the issues faced by the organization and industry sector to
which they relate.

Submission Format - Guidance

 Should include the header sheet with module title, module code, student ID,
wordcount and declaration re academic practice [this is in the assessment
section of the learning room and should be inserted at the front of your
submission]. The header sheet is not included in word count.
 You must submit the assessment in Microsoft Word. Tables are permitted either
in Word or inserted from Excel. Please do not submit a separate Excel file.
 Your writing is expected to conform to Standard academic English in terms of
spelling, syntax and grammar.
 Set up your page for A4 paper in portrait style.
 The font size must be a minimum of point 10 Verdana (or equivalent e.g. point
12 Calibri) for the body of the assessment and can be 1 to 2 font sizes larger for
subheadings/headings and 2 points smaller for footnotes etc.
 Line spacing in the body of the assessment should be 1.5 lines.
 Number the pages consecutively.
 NTU Harvard referencing should be used for where appropriate.
 ALL workings should be shown. Credit can be given for workings even when the
final answer may be wrong. These can be included in the main report and/or
included in an appendix.
Business Report Style:
 Headings for each element of the brief and sub-headings for each sub element
 Include tables, calculations and graphs.
 Sometimes use bullet points – but make sure that the bullet contains sufficient
information to be informative (so avoid bullets with one/few words). Short
meaningful paragraphs with one point of interest rather than cramming in
several points.
 Offer conclusions/recommendations.
 NBS Feedback Form for Postgraduate Coursework
Module Management in Organisation Student Number and
Name
BUSI48901
Assessment Element (as Element 1 Element 3 Tutor name (s)
stated in the assessment
brief) Element 2 Element 4
Assessment submission Please refer to the Module Date Feedback Please refer to the Dropbox folder
date Learning Room Dropbox Uploaded for the date on which your
Folder for the date you were feedback was uploaded.
due to submit.

MODULE LEARNING OUTCOMES ASSESSED

Knowledge and understanding: Skills, qualities and attributes:
a) Demonstrate an understanding of financial f) Read and understand the financial statements of
reporting and management accounting different types of companies
concepts, terms and techniques g) Select and apply techniques of financial
b) Analyse and interpret financial statements statement analysis within the decision-making
and managerial accounting reports process
c) Demonstrate a conceptual and practical h) Evaluate and interpret the results of your
understanding of major approaches to analysis
operations Management in different business i) Employ operational concepts to support the
environments design, planning, control and improvement
d) Evaluate the role that managers play in processes within organisations
managing processes across core business
functions, with specific reference to operations
and accounting and finance
e) Understand the strategic role of operations in
enabling improvement within organisations.
Element Grade
The overall grade for the work is based on a holistic assessment and is determined by how well the criteria have been
met overall and not the sum of the individual aspects of the work.
In the matrix below, grades awarded against each criterion indicate that the relevant aspect of the work can be more
readily associated with that category than any other. Allocation of a grade does not indicate that work exactly matches
the associated description.
Exceptional
Distinction
High Commendation
High Pass High Distinction

Mid Fail Mid Pass Mid Commendation Mid Distinction

Low Fail Marginal Fail Pass Commendation Distinction

Zero If a zero grade, select the appropriate comment below:

NS - No work submitted or submitted > 5 working days after

NK - Work submitted and is in moderation
deadline

NE - Work is not yet submitted, and student has an Extension NN – Student did not attend for an exam

ASSESSMENT CRITERIA
Component, Fail Marginal Fail Pass Commendation Distinction
learning
outcomes and
weighting

Little or no Some relevant Demonstrates a Demonstrates a Demonstrates an

Content and relevant and/or required systematic and detailed, excellent
range of knowledge knowledge missing sound factual systematic, in- comprehensive,
knowledge included. or confused and/or depth, detailed and in-
displayed. and/or significant conceptual theoretically depth knowledge
misuse of knowledge base informed base, the
LO a,f,g terminology. and uses knowledge base, capacity to
appropriate with appreciation integrate
terminology. of the provisional theoretical and
nature of substantive
knowledge. knowledge, and a
developed
understanding of
the limits to
knowledge.

Fails to address Mostly fails to Generally, addres Addresses the Addresses the
the main address the main ses the main main main
Attention to purposes of the purpose/aims/obj purpose/aims/ob purpose/aims/ob purpose/aims/ob
purpose purpose/aims/ob ectives of the jectives of jectives of the jectives of the
jectives assessment brief. the assessment assignment assignment
LO b,h assessment brief. brief, but lacks effectively with effectively with
correct appropriate appropriate
emphasis. emphasis. emphasis.

Lacks any Attempts at Calculations Accurate Sound

Calculation and meaningful analysis and mostly accurate. calculations. calculations.
Analysis calculation and calculations Makes fair Makes effective Demonstrates a
analysis ineffective and/or and/or use of a range of command of
LO b,g,h uninformed by the conventional use relevant critical relevant critical
discipline. of established analytic analytic
techniques of techniques. techniques.
analysis, Shows well Shows an
relevant to the developed excellent
discipline ability to appreciation of
investigate the limits
alternative and/or
analytic appropriate uses
approaches, of particular
where relevant analytic
approaches.

Final outcome or Rationale behind Uses appropriate Uses a range of Comprehensively

Decision-making choice is unclear the final outcome information to appropriate evaluates
or absent. or choice is evaluate possible information, options, using a
LO b, f, g, h unclear or options. Final exercising range of
untenable. decision is clear autonomy and appropriate
and linked to the initiative when information, and
evaluation, with evaluating exercising
some recognition options. Makes autonomy and
of complexity clear decisions initiative. Makes
and uncertainty. that apply clear decisions
criteria for final that
decision, systematically
appropriate to apply criteria for
complex and final decision,
uncertain appropriate to
situations. complex and
uncertain
situations.

What you did well in this coursework.


What you can do to improve your future coursework.

Financial Performance and Position
As a manufacturer of sustainable packaging in the UK, WestRock have been enjoying a
growth in demand for its packaging solution. The company is a leader in sustainable, fibre-
based packaging solutions. With about 58,000 WestRock team members and billions of
packages in circulation, they have the responsibility and capability to make significant
progress toward a more circular, sustainable economy.

They are materials scientists, packaging designers, mechanical engineers and

manufacturing experts, using leading science and technology to drive innovation in
packaging. The growth in demand, although welcome, has resulted in some business
challenges. WestRock have experienced difficulties recruiting skilled workers, significant
price escalation, delivery delays from the supply-chain and price pressure as new
companies enter this market.
The company has invested in new production facilities during 2022 financed through long-
term loans. Shareholders had not been willing to increase their investment in the company
until they could see the upturn in revenues which the company had predicted.
The company has prepared the latest financial statements (Appendix 1) which will be
presented to shareholders at the AGM.
The Board of WestRock are due to review the performance in advance of the AGM and you
have been tasked with providing the Chief Executive with an appraisal of the
performance.
The Chief Executive has informed you that whilst she is pleased with the revenue growth,
she had expected a larger profit and is concerned by the increases in some elements of
working capital and the level of debt that the company is now carrying. She believes that
the working capital changes must be down to the volume increase but would like you to
check this.
In addition, the Chairman has been talking to other companies in the industry at a
luncheon and believes that the company is lagging the overall industry performance on a
variety of important measures.
The financial Statements of the company have been set out in the Appendix 1.

New Product Development

The Managing Directors of WestRock have been called upon to review the profit planning
for the company with a view of coming up with a strategy to bolster the profits. After
some deliberation the Managing Directors suggest that the company can increase its
profits by embarking on the production and sale of a new product, Paper Solutions. The
directors propose that the company could sell 200,000 [units] in the first year and are
confident that this will make a target profit of £100,000 for the company.
The Accounts Assistant of WestRock has gathered the following information on the likely
costs of the new product to be released under this new project:
 £

Selling price per unit 15.00

Direct material cost per unit 2.50

Direct labour cost per unit 5.00

Additional electricity charge per unit 0.10

Cost of new manager per year 35,000

Packaging cost per unit 0.40

Cost of additional factory overheads per year 450,000

Annual advertising cost 185,000

Sales commission paid to salesman per unit sold 2.50

Annual salary for Sales manager 50,000

The Production Manager of WestRock is of the opinion that an in-house production of the
Paper Solutions will end up being expensive venture. Consequently, an alternative
manufacturer, Multi Packaging Solutions UK Limited has been identified which could
produce the eco-friendly products. WestRock would then sell the finished eco-friendly
products using its sales and distribution network. The only costs left to WestRock would be
advertising, sales commission, and the Sales Manager’s annual salary.
Multi Packaging Solutions UK Limited would charge WestRock £10 per item manufactured.

New project investment proposals

Meanwhile the Finance Director is of the opinion that WestRock should consider taking a
long-term view of expanding the product lines. The Finance Director has identified the
following budgeted income and expenditure for two potential projects: VPS Containers
and EverGrow Collection.

Year 0 Year 1 Year 2 Year 3 Year 4

VPS Containers

Income 2,500,000 2,750,000 3,250,000 3,500,000

Expenditure – 1,750,000
plant and
equipment
(purchase)

Other expenses 1,250,000 1,350,000 1,500,000 1,750,000

 Year 1 Year 2 Year 3 Year 4

EverGrow Collection

Income 2,450,000 2,450,000 2,450,000 2,450,000

Expenditure – plant and 375,000 375,000 375,000 375,000

equipment (hire)

Other expenses 900,000 990,000 1,000,000 1,100,000

Additional information:
If the additional information does not indicate that it is project specific, you are to
assume that it is relevant to both potential projects.

 Taxation is charged at 20% a year in arrears; however, management decide not to

consider this in their analysis.

 Extracts from the company financial statements are as follows:

- Benchmarked gearing of 0.25:1.

- Cash position: cash at bank of £1 million.

 The company desires to reduce their carbon footprint in line with their core
strategic values of sustainable production. They have determined that renting the
equipment for EverGrow Collection would reduce their carbon emissions by 70% but
VPS Containers would have a nil effect on their carbon footprint.

 Embarking on the VPS Containers would require other projects to be delayed by

one year due to the initial capital investment required in Year 1. However, this
would not prevent these other projects from going ahead. There is no quantitative
financial data available for these other projects.

 The usual margin that the company achieves on its products is between 15-25% on a
cost-plus basis.

 The product that they are looking to introduce in both cases is a product that
already has an established market with both well-established brand competitors
and some substitutes.

 The market is reasonably mature having been in existence for about 5 years, there
are no patents or other protection rights for the existing competitors, but
competition is fierce.

 This is a new product for WestRock and would require entry into a new market of
which they have no experience or established reputation. However, they do sell a
complementary product for which they are the brand leader both on cost and
perceived quality.

 Products are priced on a cost-plus basis, but this is based upon the appropriateness
of the method for the product being priced.

 VPS CONTAINERS ONLY- the plant and equipment have no scrap value.
DETAILED REQUIREMENTS OF ASSESSMENT BRIEF

You are required to address the following tasks set out below and which are
based on the related sections discussed above:

1) Financial Performance
Write a business report for the Chief Executive and Chairman assessing the financial
performance of WestRock for the year to 31 st October 2022 (measured by the Statement of
Comprehensive Income) and the financial position as at 31 st October 2022 (measured by
the Statement of Financial position).
The report should analyse the profitability, liquidity, solvency and working capital
efficiency for the period under consideration (Refer to Appendix 1 & 3)
It is expected that the report will incorporate a mixture of financial measures and
commentary explaining the key changes in performance and address the concerns raised
by the Chief Executive and Chairman. Your report should highlight a number of areas
which you deem to be worthy of further investigation to fully understand performance.

Additional guidance
a) Mark allocation
Mark split between numbers and No of Max marks for the Max marks for the
comments measures measure comments

Profitability 6 6 9

Liquidity 2 2 3

Solvency 2 2 3
Efficiency 4 4 6

14 21

b) Ratios / metrics should be calculated using the standard definition sheet provided
in the workshop (on NOW).
c) The report will include tables supported by commentary.
d) Include sub-headings within the commentary for each key area being explained.
e) The commentary must not exceed 750 words (excludes tables and headings)
f) ALL workings should be shown.
(Total: 35 marks)
2) New Product Development

a) Calculate the break-even point in units and in annual sales value (£’s).
(4 marks)

b) Calculate the margin of safety of the product as a percentage, assuming the

200,000 units of expected sales. (4 marks)

c) If the Managing Director wants to make a target profit of £100,000 on this project,
how many items would he have to sell? (2 marks)

d) Based on the calculations above, advise the Managing director whether he should
proceed with the new product. (2 marks)

e) The Managing Director is considering the offer from Multi Packaging Solutions UK
Limited to manufacture the product. Assuming Multi Packaging Solutions UK
Limited could manufacture up to 200,000 items per year, should we accept their
offer? Support your answer with financial calculations. (8 marks)

f) Critically discuss what other non-financial considerations should the Managing

Director be aware of, before taking on the offer of Multi Packaging Solutions UK
Limited?
Academic references, business journal references (real-world business examples)
should be used to support your answer.
(12 marks)

(Total: 32 marks)

3) New project investment proposal

a) Calculate the CASH net present value of the two projects. The discount factor is
10% (Refer to Appendix 2 for Present Value Tables) and you should round your
answer to the nearest full pound (not pence). Please provide your
recommendation for which project based on the brief above and as part of NPV
exercise you think is best suited to the strategic aims of WestRock.

Use of excel and demonstration of excel skills will be expected for the
presentation of the financial elements. These should be embedded within the
report as required.
(18 marks)
b) Critically evaluate the usefulness of net present value and two other methods as
project appraisal tools using academic references to support your answer.
(15 marks)

(Total: 33 marks)
APPENDICES
APPENDIX 1 - WESTROCK FINANCIAL STATEMENTS & INFORMATION

Statement of Financial Position as at 31 October

2022 2021
£’000 £’000 £’000 £’000
Non-current assets
Property plant and equipment 11,260 9,700

Current assets
Inventories 720 350
Trade receivables 985 703
Cash at bank 80 200
1,785 1,253
Total assets 13,045 10,953

Equity
Ordinary share capital 5,000 5,000
Share premium account 200 200
Retained Earnings 4,483 3,021
9,683 8,221

Non-current liabilities
Long-term loans 2,300 1,600

Current liabilities
Short term loans 0 300
Trade payables 666 460
Taxation payable 343 324
Interest owing 53 48
1,062 1,132
Total equity and liabilities 13,045 10,953

Memo : Net Debt position above

Cash at bank 80 200
Short-term loans 0 300
Long-term loans 2,300 1,600
Net Debt 2,220 1,100
Statement of Comprehensive Income for the year to 31 October
2022 2021
£’000 £’000
Sales revenue 9,650 8,200
Cost of sales 6,200 4,910
Gross profit 3,450 3,290
Distribution costs 870 830
Administration costs 670 660
Operating profit 1,910 1,800
Interest payable 105 95
Profit before tax 1,805 1,705
Taxation 343 324
Profit after tax 1,462 1,381

Other relevant information:

Industry benchmarks (averages for 2022 and 2021)

Market growth – yr. on yr. 22%

Operating Margin 20%

Inventory holding period 30 days

Receivable’s collection period 30 days

Time to pay suppliers 45 days

Gearing 25%
APPENDIX 2 - PRESENT VALUE TABLES
APPENDIX 3 - RATIO SHEET
Expressed
Ratio as Formula
Profitability
Revenue Growth % Revenue Yr2 / Revenue Yr 1 as a % change

Gross Profit x100

Gross Profit Margin
% Revenue (Sales)

Operating Profit Margin % Profit before Interest and tax x 100

Revenue (Sales)

Net Profit Margin % Profit After Tax (sometimes called Profit attributable to Equity shareholders) x 100
Revenue (Sales)

% Profit before Interest and tax x 100

Return On Capital Employed
Equity + Long Term Debt
Return on Assets - ROA %
Profit After Tax (sometimes called Profit attributable to Equity shareholders) x 100
Total Assets

% Profit After Tax (sometimes called Profit attributable to Equity shareholders) x 100
Return On Equity
Equity

Liquidity
Ratio Current Assets (Cash, Inventory and Receivables)
Current Ratio
Current Liabilities (short-term debt and other payables)

Ratio Current Assets - Inventory

Quick Ratio (Acid Test)
Current Liabilities

Efficiency - and insight into working capital & liquidity

Revenue (Sales)
Net Asset Turnover
times Total assets - Current Liabilities

days Inventories x 365

Days Inventory Outstanding
Cost of Sales
Trade Receivables days - the
days
trade collection period Trade Receivables x 365
Revenue from Credit sales*

Trade Payable days - the trade days Trade Payables x 365

payable period Cost of sales**

Cash conversion cycle days Days Inventory + Days Receivables - Days Payables
(Operating cash cycle)

Note - strictly these efficiency ratios would use Average inventory, receivables and payables.
In practice, unless given averages use the amount shown in the SOFP as the CLOSING balance
*Credit sales may not be given in which case use Sales per the SOCI.
** Strictly this should be Purchases but often not available
Investment Ratios
pence Profit After Tax and Preference dividends
Earnings Per Share EPS
Weighted average Number Of Shares in issue

times Market Share Price

Price/Earnings Ratio (P/E)
Earnings Per Share

times Profit after tax and preference dividends

Dividend Cover
Ordinary dividends paid
% Dividends Per Share
Dividend Yield
Market Share Price
Capital Gearing ratio % Long-term (non-current debt)
Equity + Long-term (non-current debt)

% Long Term Debt x 100

Capital Gearing
Equity + Long Term Debt

times Profit efore Interest (Operating Profit)

Interest Cover
Interest payable