OPM61 INTERNATIONAL LOGISTICS AND FINANCE
Summative Assessment 2
Administration Accounting
Assessment Transient 2021/22
CONTENTS PAGE
Assessment overview Web page 1
Assessment job Web page 2
Help and steering Pages 2-Three
Handin particulars Web page four
Marking and suggestions Web page four
Case research Pages 5-10
Assessment Overview
Assessment kind: Particular person coursework
Weighting: 30% of the general module
Hand out date: 01/12/21
Hand in date: 07/01/22
Submission guideline: Digital copy through My Research
Studying End result:
LO5 Respect the position of administration accounting in enterprise choice making
Assessment Activity
Background:
The Chief Finance Officer (CFO) of P plc has not too long ago been e-mailed a duplicate of the 2016 printed normal PAS 1919 Information to administration accounting ideas, the primary ever worldwide administration accounting normal. Within the gentle of this new normal and up to date criticisms from the board that there’s a lack of strategic administration accounting data accessible within the organisation, the CFO has requested you (as Administration Accountant) to research the viability of utilizing Balanced Scorecards inside P plc.
Required:
Utilizing the case research notes (see web page 5) and analysis into Balanced Scorecards, write a report back to the group CFO of P plc incorporating;
• A pilot Balanced Scorecard for the group that might Help senior executives obtain the said group strategic targets, company duty goals and strategic developments. (30% marks)
• A pilot Balanced Scorecard for one of many working divisions (Plumbing & Heating or Constructing Supplies) that might Help all ranges of worker obtain divisional targets that Help group technique, while sustaining purpose congruence with the chief board and the board of administrators. (30% marks)
• Primarily based on acceptable educational literature and the context of the case research, critically consider the position of Balanced Scorecards as efficient administration instruments inside the current organisational construction of P plc. (30% marks)
• Primarily based in your findings, advocate if the group and every division ought to use Balanced Scorecards as a part of future administration management techniques. (10% marks)
Help and steering notes
Report steering notes:
You might be required to provide a 1000 phrase report excluding references/bibliography and appendices. A proper report construction is required with acceptable headings and format appropriate for presentation at board degree. Balanced Scorecards must be included within the appendices of the report and never included within the phrase depend.
The phrase depend is proscribed for this project, so concentrate on the precise necessities as listed beneath.
Don’t present pointless element on the origins and historic growth of the strategic instruments contained on this report, or data on the corporate itself, because the CFO can be effectively versed on the corporate. Equally don’t describe the measures contained within the diagrams, a well-designed Balanced Scorecard must be clear to the CFO with out detailed rationalization.
You might be required to provide an inner enterprise report addressed to the Chief Monetary Officer (CFO). Skilled experiences are often written within the third particular person reasonably than first particular person, for instance a bit of the report may embody ‘this report goals to’ reasonably than ‘I intention to’.
Report steering notes (continued)
The Balanced Scorecard ought to embody a column with main/lagging indicators. A customer support index can be a lagging indicator, however customer support coaching can be a number one (proactive) indicator.
It doesn’t matter which of the divisions you select, however the Balanced Scorecard for the chosen division ought to have some consistency with that of the general group.
In your vital analysis of the usage of the Balanced Scorecard, combine educational references with particular factors about P plc that might Help or hinder the method of design and implementation.
Your suggestion must be according to the findings within the report. Present a transparent conclusion so the CFO may act in your suggestion.
Normal steering notes
This project counts 30% in direction of your closing mark for this module. Please observe that that is a person project. You could not talk about the main points of this project along with your classmates or with anybody else. Any questions you possibly can contact me instantly by e-mail: d.a.connolly@brighton.ac.uk
You must have the ability to full a lot of the project on the idea of information gained on the module, nonetheless further analysis into Balanced Scorecards can be required. Do not forget that you could present references on the finish of your project in respect of any books or articles that you’ve got consulted e.g;
Drury, C., 2018. Administration and Value Accounting (Tenth version). Printed by Cengage Studying.
The primary worldwide administration accounting normal, PAS 1919 Information to administration accounting ideas, was not too long ago emailed to P plc’s CFO. Because of this new norm and former board criticism of a scarcity of strategic administration accounting data, the CFO has requested you to judge the practicality of using Balanced Scorecards inside P plc.
Required:
• A pilot Balanced Scorecard for the group that might Help senior executives obtain the desired group strategic targets, company duty objectives, and strategic developments. (30%)
To Help all ranges of workers obtain divisional targets that Help group technique whereas sustaining purpose congruence with the chief board and the board of administrators, the corporate developed a pilot Balanced Scorecard for certainly one of its working divisions (Plumbing & Heating or Constructing Supplies). (30%)
• Primarily based on educational analysis and the case research context, consider Balanced Scorecards as profitable administration instruments inside P plc’s current organizational construction. (30%)
Suggest utilizing Balanced Scorecards as a part of future administration management techniques for the group and every division. (10%)
Notes of help
Reporting suggestions:
It must be 1000 phrases omitting references/bibliography and appendices. An expert report construction with acceptable titles and format is critical for board presentation. Balanced Scorecards must be within the report’s appendices, not within the phrase depend.
This project’s phrase depend is proscribed, so concentrate on the necessities given beneath.
The CFO can be well-versed within the firm’s historical past, so do not go into an excessive amount of element about its roots and growth. Do not clarify the measurements within the diagrams; a well-designed Balanced Scorecard must be evident to the CFO.
You could put together an inner enterprise report for the Chief Monetary Officer (CFO). Skilled experiences are ceaselessly written within the third particular person, reasonably than first particular person, as in ‘this report goals to’ as an alternative of ‘I aspire to’.
Notes on reporting (continued)
A column with main/lagging indications must be added to the BSC. A customer support index is a lag indicator, however customer support coaching is a lead sign.
Irrespective of the division you select, the Balanced Scorecard must be according to the general group.
Embody educational references together with specific info concerning P plc that might Help or impede the design and implementation course of.
Your suggestion must be in keeping with the report’s findings. Present a transparent conclusion so the CFO can act.
Notas de orient
This project contributes 30% to your module grade. This can be a solo project. You could not talk about this undertaking with anyone else, together with your classmates. d.a.connolly@brighton.ac.uk
A lot of the job may be accomplished primarily based on module data, nonetheless additional analysis into Balanced Scorecards can be required. Keep in mind to quote any books or papers you utilized in your project (e.g. Drury, C., 2018). (Tenth version). Cengage Studying.
Kaplan, R.S. and Norton, D.P., 2000. Linking Technique to planning and Budgeting. Harvard Enterprise Faculty Publishing.
Cowl sheet: Your project ought to have a canopy sheet containing:
1. Your identify
2. Your pupil quantity
Three. The identify of the project
four. A plagiarism declaration (see beneath), collectively along with your signature
The plagiarism declaration ought to learn as follows:
I perceive that plagiarism is to make use of another person’s work and to submit it as my very own. I hereby declare that this submission is all my very own work, and that I’ve not copied anybody else’s work nor obtained any enter on the project from anybody else. The place I’ve used materials from textual content books, articles or the web, I’ve cited the particulars of those works within the reference part of my submission.
Signed: (Your identify) Date:
Hand In Particulars
The project must be submitted electronically through MyStudies by 10am on 7 January 2022.
Check with your course handbook for the processes and procedures in place for late submissions, extensions and mitigating circumstances.
Marking and Suggestions
Suggestions in your submission can be supplied within the physique of the report inside Turnitin, and through a Rubric that may correspond to the duties set within the ‘Assessment Activity’ above.
The Assessment grade and feeback can be launched on four February 2022.
Good luck! I hope that one can find the project each fascinating and difficult.
D A Connolly
Darren Connolly
Case Examine
P plc relies within the UK. It is without doubt one of the world’s main distributors of plumbing, heating and constructing supplies using over 35,000 folks. It operates its personal shops, a few of which share a typical buying and selling identify and are organised as separate enterprise items. P plc additionally sells on to constructing and plumbing contractors and retailers by means of its exterior direct gross sales items.
P plc was based within the early 20th Century as a plumbing and buildings supplies manufacturing enterprise and loved very fast progress within the 1970’s and 1980’s. In 1985, P was listed on the UK inventory change and right now first ventured into the USA by buying a constructing supplies distribution firm primarily based in New Jersey. In 1990, P plc acquired a constructing provides enterprise within the UK and, later in that decade, made acquisitions of different European primarily based plumbing and heating and constructing supplies distribution corporations. Within the early years of the 21st Century, P plc bought off all its manufacturing enterprise items and concentrated solely on being a distributor and retailer of plumbing, heating and constructing supplies.
Company values
P plc is happy with its historical past and traditions of distributing and retailing good high quality merchandise in areas that are handy to its clients. It has developed a collection of core values that are:
Buying and selling pretty and actually;
Being aware of buyer wants and market adjustments and never being happy with standing nonetheless, however searching for to repeatedly enhance;
Using dedicated folks and offering coaching alternatives to develop their abilities;
Having respect for cultural variety throughout all the corporate’s stakeholders.
Enterprise operations
P plc’s head workplace is within the UK which additionally accommodates its centralised treasury. It has two working divisions that are:
Plumbing and heating Merchandise:
Baths, showers, bogs, sinks, heating techniques, common plumbing elements resembling water faucets, pipes and drainage techniques.
Constructing supplies Merchandise:
Concrete constructing blocks, bricks, tiles, flooring merchandise, roofing supplies and picket roof beams and different timber, in addition to upvc merchandise, resembling doorways and window frames.
Every division’s working preparations are comparable. Every division has two distribution warehouses, one every in Europe and the USA. Every division makes use of these warehouses to fulfil gross sales orders positioned by its exterior direct gross sales items and shops.
The exterior direct gross sales items promote to constructing contractors, plumbing contractors and retailers who provide small constructing and plumbing corporations with supplies and elements.
P plc’s shops promote on to the general public and to the constructing and plumbing trades. A few of these retail gross sales retailers had been arrange or acquired as chains of shops every with a typical buying and selling identify and these have been retained as separate enterprise items. The shops which have been acquired proceed to function underneath their very own buying and selling names in order that P plc can retain the good thing about the goodwill the shops developed. Every has a selected line of enterprise, such because the sale of full loos and kitchens by means of chains of showrooms.
Enterprise operations (continued)
The plumbing and heating division carries out its retail operations by means of established chains of showrooms. These showrooms promote merchandise to native tradesmen and in addition on to the general public. The constructing supplies division’s retail actions are carried out by means of small-scale shops that are often situated on industrial estates and people which have been acquired retain their native constructing provide buying and selling names.
Among the shops had been established, or had been acquired as chains of shops, working as enterprise items with a typical buying and selling identify. The remaining retails retailers are particular person enterprise items in their very own proper comprising a single outlet.
General, P plc has effectively over 90,000 suppliers and sells to over 1.2 million clients internationally. Every of the 2 divisions operates its personal massive logistics and distribution community. They function their very own fleet of street transport automobiles to distribute merchandise in Europe and the USA and use rail, sea and air networks for distribution to their exterior direct gross sales items and shops in different elements of the world.
Board of Administrators and Govt Board composition
The Board of Administrators contains a Non-executive Chair, a Chief Govt, the 5 administrators masking the capabilities of Finance, Logistics, Procurement, Advertising and marketing and Info Methods, the Managing Administrators of the 2 divisions, the Firm Secretary and 6 non-executive administrators.
As well as, P plc has an Govt Board comprising the Chief Govt, the 5 purposeful govt administrators, the Managing Administrators of the 2 divisions and in addition the Chief Human Sources Officer, who just isn’t a essential board member. The Govt Board experiences to the Board of Administrators.
Divisional Administration Construction
Every of the 2 divisions operates with a Divisional Govt Administration Crew (DEMT), primarily based within the UK. These comprise chief divisional officers for the capabilities of finance, human sources, data techniques, logistics, advertising and marketing and procurement. Every DEMT is led by the related Divisional Managing Director. Within the USA, there’s additionally a Senior Govt Crew for every division which contains chief officers masking the identical capabilities as are represented on the DEMT and chaired by the corporate’s divisional Vice President (Plumbing and Heating or Constructing Supplies as acceptable) for US gross sales. The senior govt groups within the USA report back to their acceptable DEMT within the UK. An organisational construction chart is offered at Appendix1.
Monetary construction
There are 500 million GBP zero.10 shares in concern. The possession of the corporate is break up within the following proportions:
Monetary establishments: 90%
Particular person traders: 9.5%
Board members and workers: zero.5%
The share value has ranged between GBP 9 and GBP 6 over the past yr. The dividend within the final monetary yr was GBP zero.25 per share and represented a rise of 20% over the earlier yr. The Chairman commented on this improved dividend stating that the Board had robust confidence that the corporate would proceed to develop.
Chairman’s assertion on P plc’s strategic targets
P plc’s Chairman has declared three strategic targets for the corporate which all mix with the intention of bettering shareholder worth. These three strategic targets of P plc are:
1. To be the market chief within the areas of the world wherein it operates;
2. To deleverage the corporate by disposing of enterprise items or particular person shops which don’t contribute sufficiently to the intention of P plc changing into market chief or are failing to fulfill minimal efficiency targets;
Three. To repeatedly attempt to enhance its merchandise and buyer providers.
The enterprise acquisition technique employed by P plc has led to excessive ranges of goodwill. In some circumstances, newly acquired companies have underperformed and never met revenue expectations. Some impairment of goodwill has been mandatory in respect of sure enterprise items. These which have critically underperformed have been disposed of. The online worth of goodwill, after impairment, is proven within the firm’s assertion of economic place in Appendix 2.
Comparative efficiency and property employed by the divisions
The divisions measure efficiency at exterior direct gross sales unit and particular person retail outlet degree. The place shops are organised into enterprise items underneath a typical buying and selling identify, then the efficiency of the retail items are consolidated enabling efficiency to be measured on the enterprise unit degree. The efficiency of the divisions for the monetary yr 2019 and the property they employed as at 31 December 2019 are as follows:
Efficiency: Plumbing and heating Constructing supplies
GBP million GBP million
Income 7,040 6,837
Working revenue 234 213
Belongings employed: Plumbing and heating Constructing supplies
GBP million GBP million
Non-current property:
Intangible property: 781 967
Property, plant and gear 597 729
Commerce and different receivables 65 70
Present property:
Inventories 930 854
Commerce and different receivables 1,075 1,052
Non-current property employed by P plc at its head workplace had been GBP 40 million at guide worth.
Supply of merchandise
P plc prides itself on working an environment friendly provide chain and creating robust relationships with a variety of suppliers internationally which provide high quality merchandise. It grants most popular provider standing to most of its suppliers and enters into long-term provide contracts. All P plc’s exterior direct gross sales items and shops are provided from its warehouses in Europe or the USA. Which means a few of its merchandise that are sourced from Asia and Africa are shipped to the corporate’s warehouses in Europe and the USA. Exterior direct gross sales items and shops in Asia and Africa then obtain shipments from the corporate’s warehouses. Which means some merchandise, which P plc sources from suppliers situated in Asia and Africa, cross the world, are saved in warehouses after which cross the world once more to be delivered to their locations in Asia and Africa.
Company Accountability Goals
P plc goals to supply glorious customer support throughout its two divisions. This excellence in customer support is underpinned by its:
• provision of excessive ranges of employees coaching and growth, with robust focus on security administration;
• adherence to the best moral requirements each internally and with respect to provider relationships;
• concern to trigger the least environmental harm doable inside its operations when it comes to emissions, waste administration and recycling actions by using environmental efficiency administration strategies;
• promotion of product integrity by means of promoting solely protected and dependable merchandise that are of the required normal of high quality and partnering with key suppliers.
Strategic developments
P plc goals to extend its market share by making repeat gross sales by means of its exterior direct gross sales items and shops to current clients and attracting new clients away from rivals. It locations customer support as its key vital success issue. The Board is continually searching for enhancements within the firm’s logistics significantly in sourcing merchandise and their supply to its exterior direct gross sales items and shops wherever they’re on the earth. It’s actively contemplating buying logistic sources in elements of the world the place it doesn’t personal warehousing and distribution services at current and in addition pursuing the idea of digital warehousing by which its exterior direct gross sales items and shops will nonetheless place their orders with P plc however will get hold of their provides instantly from the producer. Different areas of strategic growth concern reviewing the life expectancy of its merchandise in order to present higher worth for cash to closing clients and benchmarking its efficiency in several nations with a purpose to enhance working effectivity.
Extracts from P plc’s assertion of revenue and loss and assertion of economic place
Assertion of revenue or loss for the yr ended 31 December 2019
GBP million
Income 13,877
Value of gross sales 10,128
Gross revenue Three,749
Working prices Three,302
Working revenue 447
Web Finance prices 68
Revenue earlier than tax 379
Tax 116
PROFIT FOR THE YEAR 263
Assertion of economic place as at 31 December 2019
GBP million
ASSETS
Non-current property
Intangible property: goodwill (web) 1,748
Property, plant and gear 1,366
Commerce and different receivables 135
Whole non-current property Three,249
Present property
Inventories 1,784
Commerce and different receivables 2,127
Money and money equivalents 418
Whole present property four,329
Whole property 7,578
EQUITY AND LIABILITIES
Fairness
Share capital (GBP zero.1 shares) 50
Share premium 25
Retained earnings Three,396
Whole fairness Three,471
Non-current liabilities
Financial institution loans 1,000
Present liabilities
Commerce and different payables 2,905
Financial institution loans and overdrafts 202
Whole present liabilities Three,107
Whole liabilities four,107
Whole fairness and liabilities 7,578
P plc ORGANISATION STRUCTURE
