Explain the purpose of accounting in the context of different users of accounting information

Paper, Order, or Assignment Requirements


BA5501 Managing Financial Resources coursework brief 2014-15

Coursework weighting: 40% of the overall module grade

Learning outcomes

The coursework will assess your ability to:

 Analyse and interpret financial statements

 Make decisions based on financial information and non-financial considerations

 Explain the purpose of accounting in the context of different users of accounting


[The following extract is taken from the Halfords Group plc website:

http://www.halfordscompany.com/investors/halfords-explained accessed 1st Sept 2014]

“For more than 110 years Halfords has been synonymous with travel. Today our vision is clear –

We Help And Inspire Our Customers With Their Life On The Move. We are the UK’s leading

retailer of automotive and leisure products and leading independent operator in garage servicing

and auto repair. Many of our brands and product categories hold number one sales positions;

however there are clear opportunities to grow market share segments within key segments.

Our operations have three strategic pillars:

  1. Supporting Drivers of Every Car
  2. Inspiring Cyclists of Every Age
  3. Equipping Families for their Leisure Time

In order to deliver growth in our three strategic pillars Halfords is pursuing Getting Into Gear, a

five-point Retail programme of execution designed to deliver a significantly-improved customer


  1. Service Revolution – introducing a step change in service across Halfords stores
  2. The H Factor – reasserting our proposition authority to support drivers of every car,

inspire cyclists of every age and equip families for their leisure time

  1. Stores Fit to Shop – investing to raise the Halfords store estate to a standard that is

acceptable and operable

  1. 21st Century Infrastructure – systems and infrastructure to support service and sales
  2. Click with the Digital Future – creating a service-led digital proposition

The aim of this programme is to help deliver Group sales in excess of £1bn by the end of

financial year 2016”.

Income statements for the years-ending 28th March 2014 and 29th March 2013 for

Halfords Group plc:

2014 (£m) 2013 (£m)

Revenue 939.7 871.3

Cost of sales (435.5) (394.2)

Gross profit 504.2 477.1

Operating expenses (426.6) (400.0)

Operating profit 77.6 77.1

Finance costs (5.2) (6.3)

Finance income 0.2 0.2

Profit before income tax 72.6 71.0

Income tax expense (17.1) (18.3)

Profit for the year 55.5 52.7Statements of Financial Position (balance sheet) as at the year-ending 28th March 2014 and 29th

March 2013 for Halfords Group plc:

2014 (£m) 2013 (£m)

Non-current assets 441.8 433.1

Current assets

Inventories (stock) 150.2 133.2

Trade and other receivables 52.8 53.8

Other items 5.3 9.8

208.3 196.8

Total assets 650.1 629.9

Current liabilities

Borrowings (10.3) (4.3)

Trade and other payables (159.5) (144.9)

Other items (21.5) (33.9)

(191.3) (183.1)

Non-current liabilities

Borrowings (94.6) (114.2)

Other items (38.1) (33.9)

(132.7) (148.1)

Total liabilities (324.0) (331.2)

Net assets 326.1 298.7

Total equity 326.1 298.7


You are required to conduct an analysis of the financial statements of Halfords Group plc for the

years-ending 2013 and 2014 and prepare a fully referenced report (1,500 words) based on the

tasks set out in the table below (the word count excludes the reference list, exhibits and


Assessment tasks and criteria Marks

  1. Write an introduction to your report including:

(i) the aims of the report

(ii) a short overview of the main activities of Halfords Group plc


  1. For Halfords Group plc’s years-ending 2013 and 2014 calculate:

(i) Three profitability ratios

(ii) Three solvency / liquidity ratios


  1. Write an analysis comparing the financial performance and the financial position of

Halfords Group plc in 2013 and 2014, based on the ratios you calculated in task 2.


  1. Identify and discuss possible users of your analysis and their differing information



  1. Provide a short discussion on the importance of supplementing financial analysis

with non-financial considerations


  1. Write a conclusion to your report including a summary of your main findings 10%
  2. Referencing and report presentation 10%


Your coursework must be submitted as a Word document via Turnitin on StudySpace by 9.00

am on Thursday 22nd January 2015.BA5501 Managing Financial Resources coursework marking guidelines 2014-15

Task 1: Introduction (10%)

The introduction should be around 150 words and should start by stating the purpose of the

report. The introduction must also include a short overview of Halfords Group plc and their main

activities expressed in the author’s own words. For example:

– refer to the firm size (number of employees / sales / market capitalisation)

– refer to the industry sector

Tasks 2 and 3: Calculations and analysis (10% for calculations and 40% for written


The analysis of financial performance and financial position should be around 750 words (the

word count excludes calculations and tables). A basic analysis will describe the ratio results;

whereas an excellent analysis will explain the results and make comparisons to readily available

benchmark data. An excellent analysis will also relate the results to the business activities.

– Provide citations for the ratio formulae (e.g. Black and Al-Kilani, 2013, p.207).

– Show the detailed ‘workings’ for your ratio calculations in an appendix and a summary of

the results in a table(s) in the main body of the report. If you do not provide the workings

you will score zero for the calculations.

– The calculations must be displayed in the word document (NOT hand written).

– Use and display the correct unit of measurement (e.g. ROCE is a percentage).

– Round calculations to 2 decimal places.

Task 4: Users of financial statements (10%)

This section should be around 150 words. A basic report will briefly describe the different

information requirements of the users of financial statements. An excellent report will discuss the

prior analysis in relation to different users. The main focus is likely to be on investors, potential

investors and customers.

Task 5: Non-financial considerations (10%)

This section should be around 150 words. A basic report will argue the importance of

supplementing financial information with non-financial information. An excellent report will

discuss the relationship between non-financial performance and financial performance and will

refer to the non-financial indicators shown in the Halfords Group plc annual report.

Task 6: Conclusion (10%)

This section should also be around 150 words. Provide a few concluding remarks summarising

the main findings of the report (all sections).

Task 7: Referencing and report presentation (10%):

A good report will rely primarily on several textbook references to support the analysis. An

excellent report will supplement textbooks with peer reviewed academic journals, benchmark

data and the annual report of Halfords Group plc. Inadequate referencing will result in no marks

for this section.

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