Financial Reporting

1. Assessment Criteria and Marking Guidelines

ORIGINAL SUMMATIVE ASSESSMENTS:

Assessment for this module consists of

-       30% awarded for Individual Assignment: written report (maximum 5,000 words) with a formal presentation of the report,and

-       70%: a Closed Book Written Examination (marked out of 100), duration TWO hours.

Individual Assignment (30%)

Individual assignment of approximately 5,000 words is required.

Aim

You should imagine yourselves to have been recently appointed to the financial team of a substantial company. You have been asked by the Board to prepare an analytical review comparing the financial position and reporting of two companies in the food retailer & wholesalers sector: Tesco Plc and J Sainsbury Plc. Your report should be based on the most recently published financial statements (in annual report) (see below) and other information available, either in the public domain or from market circulars, websites etc. In particular, you can make use of information available from the FAME database, which enables the selection and extraction of company financial data (please note: you need to carry out your own calculations of ratios rather than simply downloading those from FAME). These data can then be independently analysed using spreadsheets or other techniques. You should use the Group or Consolidated statements and figures rather than those for the parent company alone.

Comparison with peer group company – WAL-MART & Grocery Retail Industry

 You should obtain, directly, a copy of the most recently published financial statements in the annual report from the companies themselves or from the companies’ websites

-Tesco Plc: http://www.tescoplc.com/index.asp?pageid=7

-J Sainsbury Plc: http://www.j-sainsbury.co.uk/investor-centre/

or alternatively, you can get copies free through an on-line order from Financial Times

‘Annual Reports’ service – see http://ft.ar.wilink.com/v5/index.asp.

Content

The report (excluding appendices and the one to two page summary requested - see

page 10) should not exceed 5,000 words, should be word processed and at least address

the following:

Part A:

Comment on the standard of financial reporting achieved by the companies - how clear, comprehensive and helpful are the reports to their users, bearing in mind the standard achieved by their peer group companies. In particular you should consider the extent to which the companies provide information over and above that included in the purely "financial" pages of the audited financial statements. Issues to consider here might be a helpful Operating and Financial Review and disclosures relating to wider issues of corporate governance and social responsibility (CSR). (20%)

Critical comment on financial reporting

-Usefulness of Tesco’s reporting practices

- Usefulness of Sainsbury’s reporting practices

- Comparison with peer group company – WAL-MART

- CSR

·         Corporate governance and where is your contribution?

·         Environmental reporting of Tesco, Sainsbury’s and Wal-mart

Part B:

·         Analysis of the financial strengths and weaknesses revealed by the financial statements. (65%)

·         Financial Ratio for each

·         Two-year Comparison

Part C:

·          Review of the market perception of the companies as evidenced by recent analysts’/press comments and the share price movements over the last year. (15%)

The report should include:

¨ A key point or executive summary of conclusions (preferably at the beginning of the report!);

¨ Graphical illustration, where appropriate (graphs and tables count a nominal one word for word-count purposes);

¨ A bibliography of sources of information and theoretical material used. It is essential to give acknowledgement of any external sources, making it clear whether the reference is being directly quoted or indirectly consulted. Not to do this may constitute plagiarism, which is considered a serious offence against academic integrity – and against which the official sanctions are severe!

A few points that need to be taken into consideration:

¨ Detailed tables, or extracts from financial information should be relegated to appendices, and should be appropriately referred to in the body of the report. Please note: materials included in the appendices but were not mentioned/referred to in the main body of the report could be considered as irrelevant information.

¨ You do NOT need to include a full copy of the financial statements of either company.

Penalties WILL be imposed on groups who exceed the allowed word-count.

¨ Please note that you are NOT being asked to produce a marketing or strategic analysis of the chosen companies – and you will not receive credit for doing so! Neither will credit be given for extensive sections of background material.

¨ The PRINCIPAL FOCUS of the report should be on the Operational Financial Analysis and the Strengths and Weaknesses It Reveals. Your work should focus on financial issues and be grounded in the published financial report.

¨ Creativity in content and presentation will be rewarded.

¨The report also needs to include a one to two page summary including details of attendance at meetings, and the contribution of each member of the group, and the reflective learning that has taken place. This summary should be attached to the end of the report after the appendices section, and will not count towards the overall word count of the report.