financial mangement

3)     All students are given 48 hours to complete and submit each assignment from the day, date and time the assignment is uploaded. Students are advised not to wait till the last moment of the deadline to submit the assignment.

4)     The students can check the assignment anytime and any number of times from the opening of the assignment. The answer to the assignment need to be uploaded in e-learning within 48 hours.

5)     The answer to the assignment can be uploaded only one time. No requests for resubmission of the assignment will be entertained.

6)     The students may contact the following mail Ids if they face any difficulties while related to final assignment.

​ 

7)     Students may contact their respective lecturer through college email (within the 48-hour period given) if they have any doubts and clarifications on the assignments.

8)     Students should be aware that this assignment is an independent assessment. Students are not allowed to get help from any other person during the assessment period.

9)     Students assignment will be checked for plagiarism through Turnitin software. This assignment will be assessed as per the College Assessment Policy. Student will be investigated in case of plagiarism as per the College policy and procedures. The maximum acceptable similarity index is 25%.

10)  In case the students face any technical issues regarding the submission of assignment, the answer to the assignment can be mailed to the concerned l ecturer within the 48-hour period using college email.

11) Any assignment submitted after the 48-hour period will not be considered for evaluation.

12) The assignment should be submitted only with the file in MS Word document. No other format is acceptable at all (e.g. pictures, JPEG, PDF, etc).

13) The students need to answer the assignment in the prescribed number of words as mentioned in the assignment.

14) The students need to follow the following format while preparing the assignment :

Font Style: Times New Roman

Font Size: 12 point for body and 14 point for Headings

Line Spacing: 1.5

Margin: 2.54cm (One inch) on all the sides

Page Number : At the bottom right hand corner of each page

Colour: All words should be in black colour

15) Students who will fail to submit their assignment as per the deadline given are required to make an online appeal along with the valid excuses as the guidelines which will be announced through the college website or e-learning portal within three days from the date of submission deadline.

Case Study 1:

Mr.Ahmed recently joined Muscat Investment Company as a finance manager. He is a highly talented and his future looked very bright in the company. To enhance his skills in financial management, he completed a series of exams related to financial management, earning the highest score in his training group and capturing the attention of the company’s officers. After several training program, Ahmed was assigned with responding to the queries sent by the shareholders in various matters of the company and monitoring daily cash receipts and payments. Later, Ahmed was asked to compare the financial information provided in the financial statements of Muscat investment Company and write a report on its impact on the future prospects of the company. In the first few months of his new assignment, Ahmed quickly grew to admire his new boss. In most cases, when he evaluated the creditworthiness of a new customer, his boss readily agreed with his analysis and praised his attention to detail. As the company is dealing with customers in different countries, Mr. Ahmed is also asked to advise the different strategies to be adopted to collect the amount in different currencies from the overseas customers.

In a recent meeting, Ahmed’s boss explained that Muscat Investment Company is considering a new investment and planning to acquire some machinery on lease basis. Looking at the past performance of Mr.Ahmed, the new task of evaluating the option of acquiring assets based on lease is assigned to him by his boss. The report submitted by Mr.Ahmed has attracted appreciation from the senior officers and he was promoted as senior finance manager of the company.

Task:

1) What are the primary functions performed by Mr. Ahmed as a finance manager?

( 1 Mark)

2) What are the emerging roles assigned to Mr. Ahmed by his boss? Explain with reasons (2 Marks)

3) Explain the additional skills Mr.Ahmed can acquire to play more emerging roles in his company. ( 2 Marks)

Case Study 2:

Dhofar Dairy LLC is one of the leading manufacturers and marketers of dairy-based branded products in Oman. In the initial years, its operations were restricted only to production and distribution of milk. In recent years company has gained a reasonable market share by offering quality products with reasonable price. Hence, company is planning to expand and diversify its manufacturing facilities to add a range of dairy based products including yogurt, ice creams, butter milk, cheese, ghee, milk powders and bakery items. Company asked its Finance Manager to prepare a detailed report to follow different strategies to acquire necessary fund. In order to raise capital, Finance Manager suggested to issue OMR 10 Million worth shares to public and raise OMR 2 Million short term finance.

Tasks:

1. Identify and explain with reasons the specific segment of capital market being approached by the company in Oman. ( 1 Mark)

2. Identify the market that would provide short term finance to the company and explain with reasons a most suitable financial instrument to raise the short term finance by the above company. ( 2 Mark)

3. Name any four financial intermediaries operating in Oman in the market that would provide short term finance. ( 2 marks)

Case Study 3:

Following are the Income statement and Balance sheet of Sweet of Oman SAOG.You are required to:

1. Calculate two ratios each of Liquidity, Leverage and Profitability for the year 2018 and 2019. ( 3 marks)

2. Critically evaluate the financial performance of the company in the year 2019 compared to the year 2018 based on the above ratios . ( 2 marks)

Case Study 4:

Following is the trial balance of Oman Detergents Company for the year ended 31st December 2019.

Additional information:

Closing stock on 31st December 2019 was 70% of the opening stock.

You are required to prepare income statement and balance sheet. (5 marks)

Case Study 5:

Following are the Income statement and Balance sheet of Sweet of Oman SAOG.You are required to:

1. Calculate cash conversion cycle for the year 2019 and 2018 ( 4 Marks)

2. Critically evaluate the performance of the company in 2019 compared to the year 2018 based on the cash conversion cycle. ( 1 Mark)

Case Study 6:

Mr.Hassan recently returned from UK after completing a course in event management. Focusing on his interpersonal and communication skills, he is currently planning to start an event management company along with his brother under the name Marah Entertainment LLC. They strive together as dedicated and dynamic professionals managing different kinds of formal and informal events across all major cities in Oman and other GCC countries. They design the event idea and co-ordinate the different aspects of the event to make it a grand success. As a policy, they take forty percent of the payment as advance from the client prior to the start of an event. Their clients rarely default the payment

Tasks:

1. Identify the working capital needs of the company keeping in mind the type of business operated by Marah Entertainment LLC. (2 marks)

2. Explain the other factor mentioned in the above case study, which is likely to affect the working capital requirement of their business. ( 2marks)

3. Critically examine the most suitable source of working capital finance that company can consider when need arises. ( 1 mark)

Case Study 7:

Lazeez Foods LLC is considering four capital expenditure proposals. All proposals are for similar products and are expected to operate for eight years with an investment of OMR 52,000 each. Only one proposal can be accepted. The following information is available for the projects:

Task:

1. Calculate Pay Back Period for all Projects ( 2 Marks)

2. Which of the projects do you suggest? Give reasons.( 1 Mark)

3. Critically explain the disadvantages of Pay Back Period method over other Capital Budgeting Techniques. ( 2 marks)

Case Study 8:

Zaika Bakery Prducts LLC is been operating in Muscat since 1995. During the past several years company is been able to create good brand image and market share by providing quality products.Based on the past performance and its reputation in the market, company is planning to diversify its operations other areas. At present, Zaika Bakery Prducts LLC is considering the following projects as part of its diversification plan.

The cash flows after tax from the projects are as follows

Task

1. If the discount rate of the project is 11% calculate Net Present Value for all projects.

(3 Marks)

2. Which project is suitable for investment? Give valid reasons. ( 1 Mark)

3. Critically evaluate and explain how NPV method is different from Internal Rate of Return method of Capital Budgeting. ( 1 Mark)

( Note: Present value table is given at the end of the assignment paper)

Case Study 9:

The Barik Group is planning to invest OMR 48,000 in a high tech project lasting four years. Company estimates an annual sales revenue of OMR 40,000 in the first year and is expected to grow by 10% every year for the next year. The variable cost for the first year is OMR 15000 and is expected to increase by 8% every year for the next three years. The annual fixed costs are excluding depreciation is OMR 5,000. Depreciation for the first year is OMR4, 000 and it will reduce every year by 20% for the next three years. The salvage of the project at the end of its life is OMR 2,000.

Task

1. If the tax rate is 25%, what is the project’s average accounting return (ARR)/ROI

( 3 Marks)

2. How ARR is different from IRR? Explain in detail. ( 2 marks)

Case Study 10:

Ms.Shamsa’s family is doing business for several years in Oman. The business had been established by her great grandmother for marketing dates and dates based products. Ms.Shamsa after acquiring a degree in Hotel Management, took over her family business. After joining the business she noticed that fixed operating costs of the business were high and the cash flow position was weak. To overcome the present weaknesses of her business, she wanted to undertake modernization of the existing business to introduce the latest manufacturing processes and diversify into the market of chocolates and candies. She was very enthusiastic and approached a finance consultant, who told her that approximately OMR 2,000,000 would be required for undertaking the modernization and expansion program. He also informed her that the stock market was going through a bullish phase.

Task:

1. What source of finance Ms.Shamsa should choose for financing the modernization and expansion of her food processing business based on the information provided in the above scenario? Give reasons in support of your answer.(3 Marks)

2. Evaluate and explain other factors, which Ms.Shamsa should keep in mind while taking this decision.( 2 marks)