Your Homework Assignment

Main Report & Presentation

This presentation and report account for a total of 70% of the module. The remaining 30% of the module marks relates to the reflective writing submission.

Your submission will consist of the following:

• Presentation: A ten-minute video presentation (+/- 1 minute), which should be of a professional format suitable for a management meeting. Visual aids e.g., PowerPoint should be used, and the students may choose to be visible or not in the presentation. The presentation should not only make appropriate recommendations but provide a clear justification for the recommendations.
• Report: A 1,500-word report which is in a professional format, including an Executive Summary. The report is based around the same scenario as the presentation and should contain details and calculations which support the recommendations made in the presentation. The report should include:
  • An executive summary, clearly detailing your recommendations with a brief justification.
  • A short introduction detailing the issues facing the company.
  • Discussion of Parts A, B, and C.
  • Workings may be included in the body of the report or may be included in an Appendix.
  • Fully justified recommendations and a brief conclusion.

Remember the report is a supporting document to your presentation; the two should be consistent.

Parts A, B, and C

The scenario below is divided into sections to provide guidance on the contents of the presentation. You should read the scenario thoroughly and ensure that you consider the guidance and include all required elements in a single report and a single presentation.

Scenario

BGC Ltd is a rapidly growing company which provides cleaning services to retail companies and offices. Most of their work is in High Street shops, out-of-town shopping malls, and offices. The company also produces its own cleaning products which are organic and have a low carbon footprint. These cleaning products are used exclusively by the company on its own cleaning contracts.

The company was set up by three friends from college, Bev, Gio, and Cam several years ago. The company began to experience rapid growth five years ago, but the COVID-19 pandemic which began in 2020 caused the growth of the company to falter.

Part A (40% weighting of report mark)

Profit and Loss

for year ending 30 June	2021	2020	2019	2018
	£000	£000	£000	£000
Turnover	9,216	14,523	16,289	13,777
Cost of Sales	-8,853	-13,534	-15,010	-12,570
Gross Profit	363	989	1,279	1,207
Admin exp	-257	-478	-463	-473
Other Operating Expenses	-49	-56	45	23
Profit Before Interest and tax	57	455	861	757
Interest Payable and similar charges	-28	-20	-1	-16
Profit Before Taxation	29	435	860	741
Tax on profit	-108	-157	-166	-147
Profit for the financial year	-79	278	694	594

Statement of Financial Position

At 30 June 2021	2021	2020	2019	2018
	£000	£000	£000	£000
Non-Current Assets
Goodwill	31	31	31	34
Tangible Assets	2,465	2,090	1,494	1,446
Total Non-Current Assets	2,496	2,121	1,525	1,480
Current Assets
Inventory	298	564	542	760
Trade Receivables	932	1,532	1,755	1,274
Cash at bank and in hand	19	32	286	262
Total Current Assets	1,249	2,128	2,583	2,296
Current Liabilities
Trade payables	1,296	952	721	881
Net Current Assets	-47	1,176	1,862	1,415
Total Assets less Current Liabilities	2,449	3,297	3,387	2,895
Creditors falling due after one year	557	400	52	61
Net Assets	1,892	2,897	3,335	2,834
Capital and Reserves
Called up Share Capital	1	1	1	1
Profit and Loss Account	1,891	2,896	3,534	2,833
Total Capital and Reserves	1,892	2,897	3,535	2,834

Report Requirement

Prepare a report for the directors of BGC Ltd discussing the performance, liquidity, and solvency of the company over a minimum of the last two years of the financial information provided. Your report should include, but is not limited to, reference to your calculations of the following ratios:

• Gross Profit Margin
• Net Profit Margin
• Return on Capital Employed
• Current Ratio
• Working Capital Cycle
• Gearing
• Interest cover

Your workings should be included in the Appendix to the report. In the body of your report, you should include the ratios you have calculated along with an appraisal of the company’s performance in the last two years of the financial information provided.

Presentation Requirement

Provide a brief analysis of the current performance, liquidity, and solvency of BGC Ltd based on your ratio analysis, highlighting any areas of opportunity or concern. You are not required to include workings of ratios in your PowerPoint.

Part B (30% weighting of report mark)

Cash Budget

	July	August	September	October
	£000	£000	£000	£000
Income
Receipts from customers	960	1,040	1,100	1,205
Other income	4	5	4	6
Total Cash Inflow	964	1,045	1,104	1,211
Payments
Purchases	187	194	267	102
Wages	578	620	765	894
Tax			97
Office refurbishment			250
Dividends			400
Total Payments	765	1,214	1,379	996
Net Cash Inflow (Outflow)	199	-169	-275	215
Opening Cash Balance	19	218	49	-226
Closing Cash Balance	218	49	-226	-11

Report Requirements

Provide an analysis of the cash budget making recommendations for the directors to consider. Your recommendations should be fully justified. Your recommendations could relate to any opportunities or threats you have identified from your analysis of the cash budget and should include:

• An analysis of the opportunity/threat
• Implications for the company
• Alternative options for the organisation

Presentation Requirements

Within your presentation, you should provide a critical discussion of the cash budget and justified recommendations for the directors to consider and the implications for the company.

Part C (30% weighting of report mark)

BGC Ltd is looking to the future and is keen to move the company forward. However, there is some disagreement within the directors of the company. An extract of the minutes from a meeting highlights some of the conversation which took place:

• Gio: We need to recruit more cleaning staff and salespeople. Then we can take on more contracts and drive the business to be the market leader.
• Bev: But our competitors are undercutting us. In order to compete, we have to continually reduce our prices. I think we should be leaving the retail sector – the High Street is really suffering, and out-of-town malls are not as successful as they were. We should really consider moving into the domestic market. People hate cleaning and love coming home to a clean house. We could use our award-winning cleaning products in domestic settings and keep the office contracts as well.
• Cam: We need to do some analysis to find out which areas of our business are more profitable.
• Gio: If we moved to domestic cleaning, we could continue to use the vans and cleaning equipment we already have, and our customers would pay us there and them.
• Cam: We need to do some analysis to find out which areas of our business we want to focus on.Following this meeting the following information has been made available. This consists of an analysis of the sales and gross profit for the years 2018 to 2021 showing the sales and gross profit split between the retail sector and the office sector.

Analysis of Current Market

Sector	2021 (£000)	2020 (£000)	2019 (£000)	2018 (£000)
Retail Sales	2765	7988	9611	8955
Office Sales	6451	6535	6678	4822
Total Sales	9,216	14,523	16,289	13,777
Retail Gross Profit	89	357	504	489
Office Gross Profit	274	632	775	718
Total Gross Profit	363	989	1,279	1,207

Some analysis of the future markets for cleaning in the retail, office and domestic sector revealed the following:

Predicted Markets in 2022

Cash Inflow	Boom (£000)	Static (£000)	Recession (£000)
Office	800	375	250
Retail	500	50	-150
Domestic	1100	400	-200

Chances of Market Conditions

• Boom: 25%
• Static: 35%
• Recession: 40%

Report Requirements

Using calculations to support your reasoning, critically discuss the company’s plans for the future.

Provide recommendations based on whether BGC Ltd should:

1. Carry on in the retail and office sectors.
2. Shut down the retail element and move into the domestic market.

Your recommendations should be fully justified.

Presentation Requirements

Within your presentation, you should provide a critical discussion of the company’s plans, making justified recommendations for the directors.

Other Submission Information

You must support your submission with full calculations. You may include all detailed calculations in an Appendix to the report. The key figures or supporting information can be used in the main body of your report.

Note: Any information presented in figures, charts, graphs, or tables throughout the main body of the report is excluded from the word count.

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