MCEL30032 Managing Finance for Computer Science Semester Two 2024-2025 Adding Value Assignment
Managing Finance for Computer Science Semester Two 2024-2025 (MCEL30032)
Adding Value Assignment 2024/2025 (10 Credit Only)
In this assignment you will analyse a company of your choice. The company ideally would be relevant to your subject expertise (but this is not compulsory, you can choose anything within reason) - it’s more important that you work on something you are interested in!
You are a consultant, who is aiming to give an overview of how well the company is currently doing, and to suggest what the company could do to improve including a new idea for adding value. You are reporting to a manager who may not be a specialist in your area so evidence for your arguments must be provided by way of references.
The most important thing is that you will need to check that you can obtain reliable information from reliable sources about your chosen company before you start (Feel free to check with me on your company choice). This includes financial data – make sure you have access to Profit and Loss and Balance Sheet for 3 (or more) years either on FAME, Macrotrends, the company website, or elsewhere before you start as you will need the financial ratios for Part A (If the site you use has already calculated ratios use these, if not its fine to calculate them yourself from the financial statements).
Your report should follow the structure indicated below:
Part A
Introduction, Existing Product and Market (10%)
Briefly introduce your reader to the company and its product range. Do
they compete on quality or price (or something else)? where is most value added in their value chain do you think ? What do they do well/badly?
What market are they operating in? Who are the main competitors and on what basis do they compete? What is the market size? Who are their customers? Give the reader a full understanding of where this product currently sits in the market. Please use graphs and tables where appropriate e.g. showing how the market size has changed over the last few years, showing the market share of the competitors.
Financial Analysis (30%)
Perform a financial analysis of the company as to its current state using the main financial ratios to perform a diagnosis (I recommend 8 ratios), what can you infer from each ratio – are they similar to general or industry norms - and discuss how well the company is doing and whether
there are any issues to address. You may also use non-standard ratios if appropriate or you notice something of interest. Look back on the last 3-5 years of data to examine any trends and can you link any changes with real world events. Also compare with 2 other competitor companies in the same industry to benchmark your company against the rest of the industry and identify any issues or areas for improvement (any reasonable competitors of your choice considered). Conclude with any improvements or suggestions for the company based on your findings. Please show graphs and tables here to illustrate your report. Best way to present is to show each ratio v time in a graph (including two competitors) and comment underneath.
Change to existing product (30%)
Describe ONE change you would make to add value within the company. This could apply to a single product, or it could be a change which applies to the whole company.
For example, you could add value to a product/service in terms of either design, adding extra features, improved manufacture/delivery, after sales service, marketing, etc (i.e. anywhere in the value chain is fine). A change that could affect the whole company could be saving money on deliveries, reducing waste etc. It could be a change that attracts extra customers (and more revenue), a cost saving, or could make more profit per item sold.
Fully explain fully how the change would add value and how it could be implemented within the company and roughly how much it might cost to the company and to the product itself. The changes should be based on evidence that you have found such as market research information, information from trade journals, or where a similar way of adding value has been shown to work elsewhere etc. Is the cost of the change likely to be outweighed by increase in revenue? (for example, the change could cut costs, increase sales therefore increasing revenue, generate increased profit per item sold etc). You might use your financial analysis to generate ideas, but this is not compulsory. The change can be anywhere in the value chain. The change could affect the whole company not just one product – that would be fine.
For the best marks, try to suggest how much money the company might generate from your idea. E,g if it’s a cost saving, how much could be saved per year ? If its adding an extra feature, how many more people might buy it? If its using better marketing how many more customers do you think it could generate?
Part B
Finally, chose ONE of these three options (30%)
(1) The company is looking at its risk management strategy – chose a risk (hazard, strategic, financial or operational) to analyse by the EMV method;
Probability - The probability of the risk should be determined and explained using suitable supporting evidence and references. Please express this as a % (per year or whatever time period you choose)
Potential impact – The potential impact that the risk could have on the company should be determined and explained. Again, using supporting evidence or extrapolating from other companies events or data. Please express in monetary terms (e.g. £ or $) per year or whatever time period you choose.
Overall rating – Using the information on the probability and potential impact the risk should be rated using EMV for the time period you have chosen.
Potential solutions and strategies to address the risk -This section should discuss what strategies the company could adopt to address the risk to either minimize the impact and/or eliminate the risk. Back up with evidence. What methods have other companies introduced? How much will it cost vs the cost of the risk? Ultimately the best course of action is that which has the lowest EMV. If you feel countermeasures are too costly, it would be reasonable to recommend no further action.
OR
(2) Discuss measures you think the business could employ to cut costs in order to prepare for organic growth (30%). Try to use specific examples here (can see what other companies in yours and other industries have done for hints) and to quantify the savings where possible. The actual plan for growth is not needed (but you could link to specifics if you think it would help, but this is not compulsory)
OR
(3) The company has asked your opinion on how it could finance an ambitious expansion plan (you can suggest what the expansion plan might be if it helps, but it is not necessary). Use the Beauhurst database to select
three different sources of funding and give your reasons for your choices
(30%)
*For (3) you must either email the details of the company to me
order to create the list of sources, as only I have access (which will be in a 2 separate pdf files) and you will need to pick your best three options and your reasoning behind your choices and overall strategy.
Assignment Length
This assignment should be approximately 2000 words in length excluding appendices, diagrams, graphs, tables, figure/table legends and titles and your reference list and in-text references. If you add an abstract/executive summary and/or final conclusion, this also won’t count as part of the wordcount. There is no penalty for a low wordcount, but clearly your report will lack depth if you are significantly under.
References are required in order for you to add credibility to your arguments and a report of this type would be expected to contain around 30, although there is no upper limit. These references are likely to be a mix of academic references, internet sites, market research databases such as Mintel, Frost and Sullivan, Keynote or even product comparison sites or blogs. You can also use emails or discussions you may have had with experts – reference this as “personal communication” with the experts’ title and date discussion took place. You can also reference social media if necessary.
Your report will be expected to contain a large number of tables, graphs, diagrams and references which will not count towards your wordcount (see above).
Through completion of this assignment you will demonstrate:
•An understanding of the concept of added value
•Your ability to identify added value and how the way it is added to the products
•The ability to carry out business research and formulate conclusions and recommendations based on your findings
•The ability to look at costs in the context of comparing spending to potential gain from savings or increased sales
•Understand and weigh up risks or identify funding strategies for expanding the business.
•An ability to research information from a wide variety of sources and synthesise a strategy based on what you have found.
•An ability to deal with uncertainty by suggesting what might happen in the future (with regard to risk and adding value) rather than searching for a yes or no answer.
Rough Rubric for what constitutes a pass/1st Class attempt
Section
Pass 1st Class
|
Introduction |
Will contain market data, description of the company with some limited analysis |
The introduction will contain market and competitor data from several sources and will provide a clear explanation of where the company sits and what its main strengths and weaknesses are as well as the current market drivers. |
|
Finance |
A range of ratios will be presented and an understanding of the consequences of the values given |
The values will be linked to real world events, norms for that industry and there may be deductions made from links between several ratios. A good overall analysis of the company’s financial position |
|
Adding Value |
The idea selected will be explained supporting regarding savings/market size with some evidence cost |
The idea selected will be clearly explained with market data or costs used along with explained assumptions to give an assessment of how much value the idea could generate in £ |
|
Risk |
A risk will be chosen and a reasonable EMV calculated with a discussion on countermeasures |
Risk chosen will be clearly discussed and assumptions explained. Countermeasures will have rough costings to compare with EMV and a clear recommendation given |
Sources funding
of Sensible choices will be A clear overall strategy for funding given with reasons types will underpin the choices given
|
Organic growth |
A discussion on reasonable ways of cutting costs will be given |
Ways to cut costs will be discussed that will have an indication of how much could be saved based on evidence |
DEADLINE
The assignment should be submitted electronically via Blackboard before 14.00 on Friday 9th May 2025.
The submission link is on the main page for the BB site for this course. In the unlikely event that BB site is down when you submit, please send me an email copy before the deadline (IT services need to verify there was an outage)
If you have mit circs you will need to contact your school as soon as possible, as unfortunately I am not able to grant extensions. I am happy to agree to any decision your school makes regarding this.
