Company Background – Central Asia Metals (CAML) plc.
Central Asia
Metals (CAML) plc. is a base metals producer listed on the AIM market of the
London Stock Exchange with copper operations in Kazakhstan and a zinc and
lead mine in North Macedonia. The company is incorporated in the United
Kingdom (based in London) and raised approximately £48 million at IPO in
September 2010. This capital was used to build the Kounrad recovery plant in
central Kazakhstan. In November 2017, the company completed the acquisition
of the Sasa zinc and lead mine in North Macedonia for a total consideration
of approximately £315 million.
Assume that the company
is now planning to expand further and build another extraction plant in
Uzbekistan within the next five (5) years. The company estimates that
they would need to raise approximately £120 million for this project.
Required
TASK 1 (1,000 WORDS)
Suppose you are part of the Accounting and
Finance team at Central Asia Metals
(CAML) plc. You are required to write a report to the senior management
team of CAML plc., discussing
the importance of accounting and finance functions, roles and duties within CAML
plc with respect to both reporting and decision-making aspects. Your discussion
should include some examples within the company where appropriate.
(30
marks)
TASK 2 (1,500 WORDS)
Using the financial statements of Central
Asia Metals (CAML) plc. presented below, complete the following tasks:
a) Provide a brief explanation of the financial
statements and their main elements supporting it by the figures and trends from
the statements below.
b) Using the figures presented in these
financial statements, calculate the following ratios in each year:
–
Return
on capital employed
–
Net
profit margin
–
Current
ratio
–
Average
Receivable days/ Debtors collection period
–
Average
Payable days/ Creditors collection period
You should clearly show all the formulas
and calculations. The figures should be rounded to two decimal places.
Formulas and calculations are not part of the word count.
c) Using the results from your calculations,
comment on the company’s performance based on the results from and
position between the two (2) years from (a), mentioning possible causes,
reasons and effects for the changes in the ratios.
In this section, please incorporate the discussion
on the company’s performance from an investor perspective, assuming that the
company is planning to build another extraction plant in
Uzbekistan within the next five (5) years and would need to raise
approximately £120 million for this project.
(60 marks)
The summarised financial statements of Central
Asia Metals (CAML) plc.
Please
note that these are simplified statements and the figures used are not taken
from the real accounts
Income
Statement
For
the year ended 31 Dec 2021
For
the year ended 31 Dec 2022
£000
£000
£000
£000
Sales
revenue
190,600
190,200
Cost of sales
Opening
inventory
18,800
10,450
Purchases
62,150
76,700
80,950
87,150
Less: Closing inventory
(10,450)
(70,500)
(13,150)
(74,000)
Gross
profit
120,100
116,200
Operating
expenses
(45,400)
(64,700)
Finance
cost
(4,500)
(3,000)
Net
profit
70,200
48,500
Assume
that all sales are credit sales
Statement of financial position
As at 31 December 2021
As at 31 December 2022
£000
£000
£000
£000
Non-current assets
367,100
372,600
Current assets
Inventory
10,450
13,150
Receivables
– trade
12,200
13,700
Prepayments
3,550
1,550
Cash
49,200
75,400
25,200
53,600
442,500
426,200
Issued
share capital
1,800
1,800
Share
premium account
152,000
152,000
Retained
earnings
182,000
194,500
335,800
348,300
Non-current
liabilities
5% loan notes
90,000
60,000
Current
liabilities
Payables – trade
16,550
17,570
Accruals
150
16,700
330
17,900
442,500
426,200
Marks will also be awarded for Structure and Presentation skills. The
structure includes the orderly presentation of relevant material. In
addition, the extent of the research is evidenced by the appropriateness and
adequacy of in-text referencing. There must be a Cover Page and Contents
Page, executive summary, sections with Introduction, Conclusion, List of
References and pages must be numbered.
(10 marks)
Please note that the word count excludes the cover page,
the contents page, executive summary, Formulas and calculations in Task 2 (b), list of
references, and appendices (if there are any).
Total marks 100
Assessment
Criteria
From
your report, you will obtain marks for the following:
Level of discussion of the
functions/roles/duties of accounting and finance team within the company
with appropriate examples. (Task 1, LO1)
30%
Level of explanation of financial
statements and their main elements supporting with example figures and
trends from the company statements. (Task 2, LO2)
15%
Accuracy and correctness of ratio
calculation over the two-year period. (Task 2, LO3)
15%
Level of analysis and discussion of the results
from the calculation of the ratios in relation to company performance
between the two years, including the discussion on the company’s performance from an investor perspective.
(Task 2, LO4)
30%
Structure and presentation of the work
and referencing (report format, clarity of expression, referencing).
10%
This assignment has been designed to provide you with an
opportunity to demonstrate your achievement of the following module learning
outcomes:
LO 1: Demonstrate
knowledge of the role of finance and accounting within the organisation with
respect to both reporting and decision-making aspects.
LO 2: Explain the structure of and terms used
within the financial statements.
LO 3: Calculate the main accounting ratios and
explain their significance to users of financial statement.
LO 4: Apply
management accounting techniques for planning, control and decision making
within the organisation.
Referencing and presentational requirements
Please
reference your work according to the Harvard style as defined in Cite Them Right Online (http://www.citethemrightonline.com). This
information is also available in book form: Pears, R. and Shields, G. (2019) Cite them right: the essential reference
guide. 11th edition. Basingstoke: Palgrave Macmillan. Copies
are available via the University library.
There are
also documents on Harvard referencing on Blackboard which students can read.
Students
must use acceptable academic sources including peer-reviewed journal
articles, Books, Company websites etc.
·
Use Arial font size 11 or 12 with 1.5 line
spacing.
·
Insert page numbers at the bottom of each
page
·
You must have a cover sheet with your
student ID and word count
How your work will be assessed
Your work will
be assessed against the assessment criteria which have been provided at the
end of this brief.
These criteria
have been designed specifically for this assignment and are intended to
measure the extent to which you have demonstrated your achievement of its
associated learning outcomes (see above). They have been aligned with the
institutional grade descriptor appropriate for your level.
The assessment
criteria provide a basis for fair and consistent marking and indicate what is
expected of you in this assignment. It is strongly recommended that you
engage with them while you are working on the assignment and use them in
combination with any feedback you receive once your work has been marked to
help you plan for future learning and development.
Submission details
·
This
assignment should be submitted electronically. Please use the relevant
Turnitin submission point in the Submit your work area in your
Blackboard module shell.
·
Please
ensure that your work has been saved in an appropriate file format. Turnitin
will only accept the following file types: Microsoft Word, Excel or
PowerPoint, PostScript, PDF, HTML, RTF, OpenOffice (ODT), Hangul (HWP), Google
Docs, or plain text. Your file must also contain at least 20 words of text,
consist of fewer than 400 pages and be less than 40MB in size.
·
You
can submit your work as many times as you like before the submission date. If
you do submit your work more than once, your earlier submission will be
replaced by the most recent version.
·
Once
you have submitted your work, you will receive a digital receipt as proof of
submission, which will be sent to your forwarded e-mail address (provided you
have set this up). Please keep this receipt for future reference, along with
the original electronic copy of your assignment.
·
You
are reminded of the University’s regulations on academic misconduct, which
can be viewed on the University website: https://bucks.ac.uk/__data/assets/pdf_file/0024/9546/Academic-Misconduct-Policy.pdf.
In submitting your assignment, you are acknowledging that you have read and
understood these regulations
·
Please also note that work that is submitted
up to 10 working days beyond the submission date will be considered a late
submission. Late submissions will be marked, and the actual mark recorded
but will be capped at the pass mark (typically 40%), provided that the
work is of a passing standard. Work submitted after this period will not be
marked and will be treated as a non-submission.
