Course Title: Evaluate organisation's financial performance

Part B: Course Detail

Teaching Period: Term1 2009

Course Code: ACCT5264C

Course Title: Evaluate organisation's financial performance

School: 650T TAFE Business

Campus: City Campus

Program: C6072 - Advanced Diploma of Accounting

Course Contact : Angelo Sellan

Course Contact Phone: +61 3 9925 5460

Course Contact Email:angelo.sellan@rmit.edu.au


Name and Contact Details of All Other Relevant Staff

Nominal Hours: 60

Regardless of the mode of delivery, represent a guide to the relative teaching time and student effort required to successfully achieve a particular competency/module. This may include not only scheduled classes or workplace visits but also the amount of effort required to undertake, evaluate and complete all assessment requirements, including any non-classroom activities.

Pre-requisites and Co-requisites

Nil.

This course is co-delivered and co-assessed holistically along with  BSBITU402A (COSC-5946C)Develop and use Complex Spreadsheets and FNSACCT501B (ACCT5240C) Provide Business and Financial Performance Information.

Course Description

This unit covers the analysis and estimation process required to determine an organisation’s financial position and performance.  The course seeks to develop and employ skills related to financial analysis, estimation, and performance review of both the short and long term activities of a firm.

If you are undertaking this course in Melbourne from semester 2, 2012 onwards your teacher will advise you if you require access to a computer for the course. It is recommended that you have access to a mobile computing device to allow greater flexibility in terms of where you can work on campus outside class times.


National Codes, Titles, Elements and Performance Criteria

National Element Code & Title:

FNSACCT608B Evaluate organisation's financial performance

Element:

Determine long and short term needs

Performance Criteria:

2.1. Resources required by organisation to meet short and long term obligations are identified and costed using standard financial analysis techniques
2.2. Financial priorities are established and reviewed based on reported performance and identified trends, organisational objectives and expected returns to operations and investments
2.3. Financial options review and analyse a range of possible assets and liabilities to optimise the capital mix required to support operations and trading needs
2.4. Organisational policies and procedures for expenditures and investments are evaluated to ensure relevance to changing personnel profiles
2.5. Debt to equity targets are analysed in terms of organisations expected performance and established in line with organisational objectives using standard accounting techniques

Element:

Evaluate returns to operations

Performance Criteria:

1.1. Cash flow and profitability patterns are trended to identify current position and expected returns from investments and projected operations
1.2. Averaged returns are disaggregated to assess strengths and weaknesses in organisational performance
1.3. Investment returns are evaluated against risk, profit and capital budget requirements

Element:

Review performance

Performance Criteria:

3.1. Forecasts are justifiable given observed trends, information, events and assumptions
3.2. Standard errors are calculated to produce levels of accuracy suitable for planning purposes
3.3. Forecasts are reviewed regularly in line with actual performance and alternative sources of information
3.4. Risk strategies are assessed for long term viability and harmonised with short term goals and obligations


Learning Outcomes



Details of Learning Activities

Students will study financial evaluation and monitoring; skills and theory in laboratory sessions, tutorials, and practical sessions through prescribed exercises and assessment work. These techniques and concepts will also be explored through the investigation of appropriate real world simulated environments.


Teaching Schedule

Teaching weekWeek CommencingTopic, Relevant performance criteria, and assessment planned dates
1 09/02/09  Introduction –Financial management functions / Goal: Profit maximization v Maximise share holders wealth.
Leverage effects on profits, Operating v Financial leverage, capital structure and earnings per share. 1.1, 2.1, 2.2, 2.3, 2.4, 2.5
2 16/02/09  Long term planning. Pro forma statements
Financial analysis: Introduction to ratios, areas of performance, Trend analysis and benchmarks, Liquidity ratios.
Spread sheet revision 2.2, 2.4, 3.1,3.3
3 23/02/09  Long term planning. Pro forma statements use with Internal growth rate, Sustainable growth rate.
Financial analysis; Profitability, Gearing and Valuation ratios
Spread Sheet charts 2.2, 2.4, 3.1, 3.3
4 02/03/09  Short term planning - working capital requirements / management
Efficiency / utelisation ratios, operating and cash cycles.
Business Plan: Choosing a business idea / setting key business objectives.
Spread Sheet logical functions 2.1, 2.2, 2.3, 2.5
5 9/03/09  Short term planning – Accounts receivable management.
In class consultation for assignment one.
Business Plan: Evaluating the business idea 2.1, 2.2, 2.3, 2.5 1st meeting with clients (assignment two)
616/03/09

 Short term planning – Inventory management EOQ, reorder points.
In class consultation for assignment one.
Business Plan: Assessing Business Opportunities 2.1, 2.2, 2.3, 2.5 Assignment One due.

7 23/03/09  All of the above further exercises to consolidate and integrate topics.
Business Plan: Marketing
8 30/03/09  ASSESSMENT WEEK TEST 1
9 06/04/09  Weighted average cost of capital
Mid semester break Tuesday 9th to Wednesday 15th.
Business Plan: Financial Plan
10 20/04/09

 Weighted average cost of capital (WACC); components of WACC, calculation and application of WACC.
Business Plan: Balanced score card. 2.1

2nd meeting with clients (assignment two)

11 27/04/09  Long term planning. Financial math and net present value revisited. Cash flow construction for capital budgeting net present value applications 1.1, 1.2, 2.1, 3.1
12 04/05/09 Long term planning. Financial math and net present value revisited. Cash flow construction for capital budgeting net present value applications 1.1, 1.2, 2.1
13 11/05/09 Risk in capital budgeting
Risk adjusted discount rate, Systematic risk, Various approaches to evaluating risk. 3.1, 3.2, 3.3, 3.4 Presentations to clients (assignment two)
14 18/05/09  Accounting for leases. Operating Vs Financial Leases and differences in accounting treatment.
In class consultation assignment three 2.2
15 25/05/09  Evaluation of leases, Borrow and buy Vs Lease.
In class consultation assignment three 2.2
16 01/06/09  ASSESSMENT WEEK TEST TWO
17 08/06/09  Deferred assessments. In class consultation / completion assignment three Assignment Three
18 15/06/09  Feedback


Learning Resources

Prescribed Texts

Clive Wilson, Bruce Keers, Andrew Medlen, Brain Walters.
Financial Management Principles and Applications, 5th Edition.
Pearson / Prentice Hall.


References

Pierson, Brown, Easton, Howard, Pinder. Business Finance 9th Edition (2006) McGraw Hill Irwin.
Ian Birt, Roger Sleeman. Making small business work for you (1999) New York; Sydney; Prentice Hall.
Business Services Training Series. Develop and use complex spreadsheets 2004. Watsonia Publishing


Other Resources

Class exercises, solutions, notes, and other material will be made available on the DLS as required.


Overview of Assessment

Assessment may incorporate a variety of methods including technical requirements documentation, homework, assignments, group and/or individual projects, in class exercises, written and practical tests, problem solving exercises, presentations, direct observation of actual and simulated work practice, presentation of a portfolio of evidence which may comprise documents, and/or photographs and/or video and audio files, review of products produced through work-based or course activities.

Students are advised that they are likely to be asked to personally demonstrate their assessment work to their teacher to ensure that the relevant competency standards are being met. Students will be provided with feedback throughout the course to check their progress.

 


Assessment Tasks

Assessment for this course comprises 2 closed book tests and three assignments. The first assignment comprises a financial analysis of a publicly listed company with a view to reporting the analysis findings to a designated stakeholder for the purposes of facilitating decision making. The second assignment entails the development of a business plan, comprising a report and final presentation to a designated client. The third assignment involves the application of financial techniques to a given case study, with a view to identifying and solving areas of poor performance, and making recommendations for improvements.


Assessment Matrix

  Test 1 Test 2 Assignment 1 Assignment 2Assignment 3
FNBACC15B/01
Evaluate returns to operations
 y yy y y
FNBACC15B/02 Determine long and short term needs  y y y y y
FNBACC15B/03 Review performance  y y y y y

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