Assessment Details and Submission Guidelines
Trimester T2 2020
Unit Code HI5020
Unit Title Corporate Accounting
Assessment Type Individual Assignment
Assessment Title Issues in Cash Flow Statement
Purpose of the assessment (with ULO Mapping)
This assignment aims at developing a clear understanding of students about income statements and cash flow statements; and the use of cash flow statements to comprehend different key business decisions taken by the management. They will have to consult relevant literature and demonstrate an understanding of key concepts. As part of their assignment, they will also conduct an empirical analysis of the cash flow statement. (ULO 1, 2, 4, 5, 6)
Weight 40 % of the total assessments (Written assignment 30 % + Presentation 10 percent)
Total Marks Written assignment 30 marks + Presentation 10 marks
Word limit 3,000 words 500 words
Due Date Assignment submission: Final Submission of individual Assignment: 11:59 pm
Wednesday 23rd Sep, Week 10
Late submission incurs penalties of five (5) % of the assessed value per calendar day unless an extension and/or special consideration has been granted by the lecturer prior to the assessment deadline
Submission Guidelines • All work must be submitted on Blackboard by the due date along with a completed
Assignment Cover Page.
• The assignment must be in MS Word format, with no spacing, 12-pt Arial font, and 2 cm margins on all four sides of your page with appropriate section headings and page numbers.
• Reference sources must be cited in the text of the report, and listed appropriately at the end in a reference list using Harvard referencing style.
Assessment task: Part A
Assignment Specifications
Review the existing literature to critically examine the relative information content of the income statement and the statements of cash flows. Why do investors find both income statements and statements of cash flows useful?
Part B
Download the annual financial reports of BHP Ltd, Santos Ltd, and Funtastic Ltd for the year
2019, 2018, and 2017. Examine the consolidated Cash Flow Statements for each company across three years. Answer the following questions about each of the three cash-flow statements.
1. For each company [except mentioned otherwise as in c), g) and i) below], across three years on the Statement of Cash Flows discuss:
a) What are the major sources of cash for each firm? What are the major uses of cash for each firm?
b) What was the trend in cash flow from (continuing) operations for each firm?
c) Compare and contrast the cash flow from operations with the net profit after tax in the income statement. Explain in detail the major reasons for the difference between these two figures. (Answer this question using only the Cash flow statement for BHP Limited).
d) Was the firm able to generate enough cash from operations to pay for all of its capital expenditures?
e) Did the cash flow from operations cover the dividend payment made by the firm
(if any)?
f) If the firm has generated excess cash from operations, how did the firm invest the excess cash? If not, what were the sources of cash the firm used to pay for the capital expenditures and/or dividends?
g) Did the firm use the working capital (current asset and current liability) accounts other than cash and cash equivalents as sources of cash, or uses of cash? (Answer this question using only the Cash flow statement for BHP Limited).
h) What other major items affected cash flows for each firm?
i) What was the trend in capital expenditures for each firm?
j) What was the trend in dividends (if any) for each firm?
k) What was the trend in net borrowing (proceeds from borrowing fewer payments of short- and long-term debt) for each firm?
l) What was the trend in working capital accounts? (Answer this question using only the Cash flow statement for BHP Limited).
2. Critically evaluate the financial strength of each of the three companies based on the evidence presented in the Statement of Cash Flows and your answers in (1) above.
3. If you are asked to evaluate these three companies for lending purposes, which of the three companies you will select for lending? Explain Why.
Assignment Structure should be as the following: Abstract – One paragraph
List of Content
Introduction
Body of the assignment with the detailed answer on each of the required tasks
Summary/Conclusion
List of references
Instruction for video presentation:
Based on your written assignment, you will have to make a summary video presentation ranging for
10 minutes. Your presentation should explain the assignment tasks and your key findings. You will have to upload the presentation on YouTube and submit the YouTube link on the blackboard so that the marker can watch and mark your presence. Your assignment will be marked based on the following criteria:
Presentation Style (3 marks)
Content (4 marks) Clarity of the presentation ((3 marks)
Excellent 3-2.5 4-3 3-2.5
Very good 2.5-1.75 3-2.5 2.5-1.75
Good 1.75-1.5 2.5-2.00 1.75-1.5
Satisfactory 1.5-1.00 2.00-1.00 1.5-1.00
Unsatisfactory 1.00-0 1.00-0 1.00-0
Marking criteria
Marking criteria Weighting
Abstract 1% List of content & overall presentation of the assignment 1%
Introduction 1%
Do the relevant research to critically examine the relative information content of 5%
the income statement and the statement of cash flows. Why do investors find both income statements and statements of cash flows useful?
What are the major sources of cash for each firm? What are the major uses of cash 1%
for each firm?
What was the trend in cash flow from (continuing) operations for each firm? 1%
Compare and contrast the cash flow from operations with the net profit after tax in 1%
income statement. Explain in detail the major reasons for the difference between these two figures. (Answer this question using only the Cash flow statement for BHP Limited).
Was the firm able to generate enough cash from operations to pay for all of its capital 1%
expenditures?
Did the cash flow from operations cover the dividend payment made by the firm (if 1%
any)?
If the firm has generated excess cash from operations, how did the firm invest the 1% excess cash? If not, what were the sources of cash the firm used to pay for the capital expenditures and/or dividends?
Did the firm use the working capital (current asset and current liability) accounts 2%
other than cash and cash equivalents as sources of cash, or uses of cash? (Answer this question using only the Cash flow statement for BHP Limited).
What other major items affected cash flows? 1% What was the trend in capital expenditures for each firm? 1%
What was the trend in dividends (if any) for each firm? 1%
What was the trend in net borrowing (proceeds from borrowing fewer payments of 1%
short- and long-term debt)?
What was the trend in working capital accounts? (Answer this question using only the 1% Cash flow statement for BHP Limited).
Critically evaluate the financial strength of each of the three companies based on the 5%
evidence presented in the Statement of Cash Flows.
If you are asked to evaluate these three companies for lending purposes, which of the 2%
three companies you will select for lending? Explain Why.
Conclusion 1% References 1% Total in Written Assignment 30% Video presentation 10% Total 40 %
Academic Integrity
Holmes Institute is committed to ensuring and upholding Academic Integrity, as Academic Integrity is integral to maintaining academic quality and the reputation of Holmes’ graduates. Accordingly, all assessment tasks need to comply with academic integrity guidelines. Table 1 identifies the six categories of Academic Integrity breaches. If you have any questions about Academic Integrity issues related to your assessment tasks, please consult your lecturer or tutor for relevant referencing guidelines and support resources. Many of these resources can also be found through the Study Sills link on Blackboard.
Academic Integrity breaches are serious offenses punishable by penalties that may range from deduction of marks, failure of the assessment task or unit involved, suspension of course enrolment, or cancellation of course enrolment.
Table 1: Six categories of Academic Integrity breaches
Plagiarism Reproducing the work of someone else without attribution. When a student submits their own work on multiple occasions this is known as self-plagiarism.
Collusion Working with one or more other individuals to complete an assignment, in a way that is not authorized.
Copying Reproducing and submitting the work of another student, with or without their knowledge. If a student fails to take reasonable precautions to prevent their own original work from being copied, this may also be considered an offense.
Impersonation Falsely presenting oneself or engaging someone else to present as oneself, in an in-person examination.
Contract cheating Contracting a third party to complete an assessment task, generally in exchange for money or another manner of payment.
Data fabrication and falsification
Source: INQAAHE, 2020
Manipulating or inventing data with the intent of supporting false conclusions, including manipulating images.
Marking Rubric
Questions Marks Excellent Very Good Good Satisfactory Unsatisfactory
Abstract /1 Apply your judgment
List of content & overall presentation of the assignment
/1 Apply your judgment
Introduction /1 Apply your judgement
Do the relevant research to critically examine the relative information content of income statement and statement of cash flows. Why do investors find both income statements and statements of cash flows useful?
What are the major sources of cash for each firm? What are the major uses of cash for each firm?
/5 Demonstrate outstanding knowledge beyond requirements on the topic.
Extensive relevant research Independent and in-depth analysis.
Issues and factors are presented and analyzed in a logical manner.
Broad and credible sources of references have been cited using proper referencing style.
/1 Major sources of cash and major uses of cash are identified and discussed in detail.
Demonstrate very good knowledge on the topic.
Substantial relevant research.
Issues are discussed adequately based on sufficient research.
Adequate references in proper referencing style.
Major sources of cash and uses of cash are identified.
Detailed discussion is provided with minor errors.
Demonstrate good knowledge of the topic.
Adequate relevant research.
Discussed the issue-based
on some research and facts.
Scopes for improvement
remain.
Adequate references in proper referencing style.
Major sources of cash and uses of cash are identified with minor errors.
Basic discussions are attempted with minor errors.
Demonstrate basic knowledge of the topic.
Some relevant research. Meet the requirements
but with limited
information and
discussion.
Limited references.
Major sources of cash and uses of cash are identified with material errors.
Basic discussions are attempted with material errors.
Demonstrate poor knowledge on the topic.
Limited and/or no relevant research.
The answers do not meet the basic requirement as no factual discussion is provided.
No reference.
No clear attempt is made to identify the major sources
of cash and uses of cash. No discussion is provided.
Questions Marks Excellent Very Good Good Satisfactory Unsatisfactory
What was the trend in cash flow from
(continuing) operations for each firm?
Compare and contrast the cash flow from operations with the net profit after tax in the income statement. Explain in detail the major reasons for the difference between these two figures. (Answer this question using only the Cash flow statement for BHP Limited).
Was the firm able to generate enough cash
/1 Trends in the cash flows from continuing operations are identified and discussed adequately.
Demonstrate outstanding knowledge beyond requirements on the topic.
Independent and in-depth analysis.
Issues and factors are presented and analyzed in a logical manner.
/1 Shows a complete comprehension of the relationship between net income and cash flows from operations.
The reasons for the differences between these two
figures are identified and discussed in detail.
/1 Identify all cash flows from operation with specific
Trends in the cash flow from continuing operations are identified.
The discussion is not comprehensive.
Demonstrate very good knowledge on the topic.
Issues are discussed adequately
based on sufficient research.
The relationship between net income and cash flows from operations are explained.
The reasons for the differences between these two figures are identified and discussed with minor errors.
Identify all cash flows from operation with specific
Trends in the cash flows from continuing operations are identified with minor errors.
The basic discussion has been provided with minor errors.
Demonstrate good knowledge of the topic.
The relationship between net income and cash flows from operations are explained.
Identification of the reasons for the differences between these two figures contains material errors.
Identify all cash flows from operation with specific
Trends in the cash flows from continuing operations are identified with material errors.
No discussion is provided.
Demonstrate basic knowledge of the topic.
Meet the requirements but with limited information and discussion.
A reasonable attempt is made to identify the relationship between net income and cash flows from operations.
A reasonable attempt is made to identify the reasons for the differences between these
two figures but fail to completely grasp the
issue.
Errors are identified in the answer.
A reasonable attempt is made to identify cash flows from the operation
No real attempt is made to identify the trend.
No discussion is provided. Demonstrate poor
knowledge on the topic.
A poor attempt is made to explain the relationship between net income and cash flows from operations.
No reasonable attempt is made to identify cash flows from operation with specific
Questions Marks Excellent Very Good Good Satisfactory Unsatisfactory
from operations to pay for all of its capital expenditures?
Did the cash flow from operations cover the dividend payment made by the firm (if any)?
If the firm has generated excess cash from operations, how did the firm invest the excess cash? If not, what were the sources of cash the firm used to pay for the capital expenditures and/or dividends?
mention of whether it is positive or negative.
Identify all capital expenditures and synthesize the adequacy of cash flows from operations to cash required for capital expenditures.
/1 Clearly demonstrate the sources of fund used for and dividends.
Demonstrate outstanding knowledge beyond requirements on the topic.
/1 Clearly identify and explain whether the firm has generated excess cash flows.
Present a good discussion on free cash flows and uses of excess cash flows.
mention of whether it is positive or negative.
Identify all capital expenditures.
Unable to explain whether the adequacy of cash flows from operations is adequate for cash required for capital expenditures.
Demonstrate the sources of fund used dividends. Minor errors.
Demonstrate very good knowledge on the topic.
Identify and explain whether the firm has generated excess cash flows.
Present a reasonable discussion on the concept of free cash flows and uses of excess cash flows.
mention of whether it is positive or negative.
Identify most capital expenditures.
Unable to explain whether the adequacy of cash flows from operations is adequate for cash required for capital expenditures.
Address the question but unable to clearly indicate whether the cash flows from operations were enough
for dividend payment.
Demonstrate good knowledge of the topic.
Identify and explain whether the firm has generated excess cash flows.
Present a discussion on the concept of free cash flows and uses of excess cash flows with errors.
with specific mention of whether it is positive or negative.
Identify some capital expenditures.
Unable to explain whether the adequacy of cash flows from operations is adequate for cash required for capital expenditures.
Some errors are identified in the answer.
Answer the question correctly with a simple “yes” or “No” answer.
No discussion is provided.
Demonstrate basic knowledge of the topic.
Identify and explain whether the firm has generated excess cash flows with some errors.
No discussion is made about free cash flows.
mention of whether it is positive or negative.
Fail to identify most capital expenditures.
Unable to explain whether the adequacy of cash flows from operations is adequate for cash required for capital expenditures.
Material errors are identified in the answer.
Incorrectly answered the question with a simple “yes” or “No” answer.
No discussion is provided. Demonstrate poor
knowledge on the topic.
Incorrectly identify and explain whether the firm has generated excess cash flows.
No discussion is made about free cash flows.
Questions Marks Excellent Very Good Good Satisfactory Unsatisfactory
The discussion on the uses of excess cash flows is unclear.
No discussion or incorrect discussion is made on the use of excess cash flows.
Did the firm use the working capital (current asset and current liability) accounts other than cash and cash equivalents as sources of cash, or uses of cash? (Answer this question using only the Cash flow statement for BHP Limited).
What other major items affected cash flows?
/2 Demonstrate a clear understanding of how changes in current assets and current liabilities can be a source of fund and/or uses of fund.
Correctly explain whether the firm has used working capital items as sources of operating cash flows or uses of operating cash flows.
/1 Cash flows from sources other than operating activities are identified.
Cash flows from investing activities and financing activities are identified and explained in detail.
Demonstrate a comprehensive understanding of the topic.
Present a good discussion on whether
the firm has used current assets
and current
liabilities as sources of funds or uses of funds.
Present an item-wise discussion on each current asset and current liability items with minor errors.
Cash flows from sources other than operating activities are identified.
Cash flows from investing activities and financing activities are identified and explained with minor errors.
Demonstrate a very good understanding of the topic.
Present a reasonable discussion on whether the firm has used current assets and current
liabilities as sources of funds or uses of funds.
Present an item-wise discussion on each current asset and current liability items with material errors.
Cash flows from sources other than operating activities are identified with minor errors.
Cash flows from investing activities and cash flows from financing activities are separately identified and explained with material errors.
Present a discussion on whether the firm has used current assets
and current
liabilities as sources of fund or uses of fund with minor errors.
Unable to present a proper discussion on each current asset and current liability items.
Cash flows from sources other than operating activities are identified with material errors.
Cash flows from investing activities and cash flows from financing activities are
not separately identified and explained.
Meet the requirements but with limited information and discussion.
Present an incorrect discussion on whether the firm has used current assets and current liabilities as sources of fund or uses of fund.
Unable to present a proper discussion on each current asset and current liability items.
Demonstrate poor knowledge on the topic.
No reasonable discussion is provided on cash flows from sources other than
operating activities.
The answers do not meet the basic requirement as no factual discussion is provided.
Questions Marks Excellent Very Good Good Satisfactory Unsatisfactory
What was the trend in capital expenditures for each firm?
What was the trend in dividends (if any) for each firm?
What was the trend in net borrowing (proceeds from borrowing fewer payments of short- and long-term debt) for each firm?
What was the trend in working capital accounts? (Answer this question using only the Cash flow statement for BHP Limited).
Critically evaluate the financial strength of each of the three companies based on the evidence presented in the Statement of Cash Flows.
/1 Trend in capital expenditures for each of the three firms is correctly identified and discussed comprehensively.
/1 Trend in dividends for each of the three firms is correctly identified and discussed comprehensively.
/1 Trend in net borrowing for each of the three firms is correctly identified and discussed comprehensively.
/1 Trend in working capital is correctly identified and discussed comprehensively.
Item-wise discussion is provided
/5 The financial situations of all three companies are comprehensively discussed
A logical and accurate conclusion is drawn based on the discussion.
The trend in capital expenditures for each of the three firms is correctly identified.
A good level of discussion is provided.
The trend in dividends for each of the three firms is correctly identified.
A good level of discussion is provided.
The trend in net borrowing for each of the three firms is correctly identified.
A good level of discussion is provided.
The trend in the working capital is correctly identified.
A good level of
discussion is provided on each item.
A very good discussion is provided on the financial situations of all three companies.
The trend in capital expenditures for each of the three firms is correctly identified but not well discussed.
The trend in dividends for each of the three firms is correctly identified but not well discussed.
The trend in net borrowing for each of the three firms is correctly identified but not well discussed.
The trend in the working capital is correctly identified.
The trend is not discussed item-wise.
The financial situations of all three companies are discussed with scopes for improvement.
Attempt to draw a conclusion but
The trend in capital expenditures for each of the three firms is correctly identified.
No discussion on the trend is provided.
The trend in dividends for each of the three firms is correctly identified.
No discussion on the trend is provided.
The trend in net borrowing for each of the three firms is correctly identified.
No discussion on the trend is provided.
The trend in the working capital is correctly identified.
No discussion on the trend is provided.
The financial situations of all three companies are discussed but most of the discussion is basic and scattered.
The trend in capital expenditures for each of the three firms is not correctly identified.
No discussion on the trend is provided.
The trend in dividends for each of the three firms is not correctly identified.
No discussion on the trend is provided.
The trend in net borrowing for each of the three firms is not correctly identified.
No discussion on the trend is provided.
The trend in the working capital is not correctly identified.
No discussion on the trend is provided.
The financial situations of all three companies are discussed.
The discussions are not logically linked.
Questions Marks Excellent Very Good Good Satisfactory Unsatisfactory
If you are asked to evaluate these three companies for lending purposes, which of the three companies you will select for lending? Explain Why.
Demonstrate outstanding knowledge beyond requirements on the topic.
Issues and facts are presented and analyzed in a logical manner.
/2 Make a clear and accurate selection highlighting the reason for the selection.
Discussion is based on facts and figures.
A logical conclusion is drawn based on the discussion.
Demonstrate very good knowledge on the topic.
Issues are discussed adequately based on sufficient research.
Make a clear and accurate selection.
A good level of discussion is provided on the selection.
it is not logically and factually sound.
Demonstrate good knowledge of the topic.
Discuss the issues based on some research and facts with scopes for improvement.
Make a clear and accurate selection.
A basic discussion is provided on the reasons for selection.
The discussions are not logically linked.
Demonstrate basic knowledge of the topic.
Meet the requirements but with limited information and discussion.
Make a clear and accurate selection.
No discussion is provided on the reason for the selection.
Demonstrate poor knowledge on the topic.
The answers do not meet the basic requirement as no factual discussion is provided.
The selection is inaccurate. No reasonable
discussion is provided on the reason for the selection.
Conclusion /1 Apply your judgement References /1 Apply your judgement Total in Written assignment /30
Video presentation /10
Total /40
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