Financial Management for Small Business: case study “Go3D”

 

Module Title: Financial Management for Small Business

 

Instructions on Assessment:

This is an individual assignment. The required length is 3,000 words. A word count must be stated at the front of the assignment – see below for penalties for excess words.

This assignment is based on the case study “Go3D”, which is available to students on the day this assignment brief is handed out.

Please treat this case as if it was fictitious; do NOT attempt to find any additional information about the company, its market, industry, environment or financial situation. Use only information that is available within the case study.

Required:

  1. Use the financial statements 2011 to 2015 of Go3D to answer the following questions:
    1. How would you interpret the fact that Go3D’s Income statements of the years ending 30th June 2011, 2012 and 2013 show losses and yet the Balance Sheets at the end of those periods show positive cash balances?
      • marks; indicative word count: 60)
    2. Provide at least two figures or ratios from Go3d’s Balance Sheets and Income Statements that show the nature of Go3D’s business has changed over the past four years.

(10 marks; indicative word count: 90)

  1. How does the convertible loan from Northstar affect the financial statements of Go3D: when given and when converted?
    • marks; indicative word count: 60)
  2. Explain with at least one example each from the Income Statement and the Balance Sheet figures to show Go3D’s business is being managed better over the years.

(10 marks; indicative word count: 90)

  1. When Larry and Edward met up in Guangzhou, Edward shared an interesting email from Tony Carlson, an ex-colleague of Edward’s who had experience of setting up and running a variety of North East based businesses and who has been an important member of the regional business angel syndicate ‘Angels of the North East (ANE):’

 

 

 

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“Hi Edward,

 

I had meant to get in touch with you for a couple of weeks but had to wait until the deal went through. You may remember my investment in Tubes-R-Us, which took much of my time over these years now – we have finally sold the business on a good deal! I am therefore looking for good investment avenues. I remembered your project and our chat when you were prototyping. I have followed your developments since and touching base to find out how you are funded and explore whether I, and ANE, could get involved at this point. We have some really good people who might be useful on your board and we could cough up a fair bit of money amongst the 30 of us investors if need be (I have not raised this with the whole group yet and not everyone will be interested but I know at least a fair number who could be as they are looking to invest more in the region). I am thinking especially about a couple who have excellent connections with the universities that could get traction for you going forward. Let me know what you think.

 

Tony.”

Critically evaluate the suitability of the three potential investment offers that Larry and Edward have received for Go3D: Northstar, Toyota and ANE. You should take into account potential financial and non-financial value-adding investments in the three offers and come to a reasoned conclusion as to which, if any, Go3D should go with.

(30 marks; indicative word count: 1200)

  1. As supplies to GM USA have started Go3D has to urgently consider the foreign currency risks involved. Consider two scenarios of this foreign market business for Go3D: 1) Go3D sells to Vauxhall UK who export to GM USA and 2) Go3D exports directly to GM USA. Discuss the types of foreign currency risk Go3D is exposed to and any one way of eliminating / minimising the exchange rate risks. Go3D has no subsidiaries overseas.

(20 marks; indicative word count: 750)

  1. Larry and Edward both have mulled over scaling back their involvement with Go3D. Edward would like to develop new software in the open source domain that is his passion and Larry wants to spend more time in the new and exciting field of no-touch technologies. They have decided to follow their passions sooner rather than later, realistically, in about two to three years. By then, they would like to have explored reducing their managerial involvement in Go3D by cashing out fully or partially. Critically discuss one option of how they could do this. Clearly state any assumptions you make (e.g. regarding the investors the business will have by then).

(20 marks; indicative word count: 750)

Important note about ARNA regulations

The regulations specify that students must complete every assessment component contributing to the modules on their programme. This applies to all forms of assessment as defined in the module descriptor. Please note that:

  • if any assessment component is not completed, students will be failed in the module even if the module pass mark has been achieved;
  • if the requirements for referral specified in section 5 of ARNA1 are met, a resit opportunity will be given;
  • if unable to complete an assessment component because of extenuating circumstances, students should follow the procedure described in the Student Guide to Extenuating Circumstances1.

This change was approved by Academic Board on 12 October 2009 in consultation with the Students’ Union. Students should consult their Programme Leader or Guidance Tutor if they have any queries.

 

Independent advice and support is also available from the Students’ Union Advice & Representation Centre (su.advice@northumbria.ac.uk) or from a student adviser in Student Services.

1ARNA and the Student Guide to Extenuating Circumstances Affecting Assessed Work are available from http://www.northumbria.ac.uk/sd/central/ar/lts/assess/assproc/assdocstud/

Word Count

The word count is to be declared on the front page of your assignment. The word count does not include title page, contents page, glossary, tables, figures, illustrations, reference list, bibliography and appendices.

Summarising and compressing the information in your assignment into the word limit is one of the skills that students are expected to acquire, and demonstrate as part of the assignment process. Word limits and penalties for assignments

If the assignment is within +10% of the stated word limit no penalty will apply.

The word count is to be declared on the front page of your assignment and the assignment cover sheet. The word count does not include:

Title and • Reference list • Appendices  
  Contents page     • Appropriate tables,
       Quotes from figures and
Glossary • Bibliography interviews and

focus groups.

illustrations

Please note, in text citations [e.g. (Smith, 2011)] and direct secondary quotations [e.g. “dib-dab nonsense analysis” (Smith, 2011 p.123)] are INCLUDED in the word count.

If this word count is falsified, students are reminded that under ARNA page 30 Section 3.4 this will be regarded as academic misconduct.

If the word limit of the full assignment exceeds the +10% limit, 10% of the mark provisionally awarded to the assignment will be deducted. For example: if the assignment is worth 70 marks but is above the word limit by more than 10%, a penalty of 7 marks will be imposed, giving a final mark of 63.

Students are advised that they may be asked to submit an electronic version of their assignment.

Time limits and penalties for presentations

The time allocated for the presentation must be adhered to. At the end of this time, the presentation will be stopped and will be marked based on what has been delivered within the time limit. Submission of Assessment:

All assignments must be submitted via the Undergraduate Programme Office. Each assignment must be accompanied by an Assessed Work Form which must be completed in full. The assignment will not be accepted by the Undergraduate Programme Office unless the form is completed correctly.

Marked assignments will be returned to students. It is advisable to retain a copy of your assignment for you own records. Your mark will be returned on the Assessed Work Form via the Undergraduate Programme Office.

Referencing your work

The APA method of referencing uses the author’s name and the date of the publication. In-text citations give brief details of the work you are referring to in your text. References are listed at the end

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 Page 4 of 73

of the text in alphabetical order by the author’s name. The general format of an electronic journal reference in the APA style is shown below:

Coutu, D. (2009). Why Teams Don’t Work. Harvard Business Review, 87(5), 98-105. Retrieved 29th April 2012 from EBSCO http://searchebscohost.com

Author/s name and initials are listed first, followed by year of publication in brackets. Then there is the title of article and the journal where the article appears, which is in italics. Then state the volume and issue number (in brackets) along with the pages where article can be located. Finally add the date the article was retrieved and then the name of the database, followed by the web address. Wherever possible use the homepage URL rather than the full and extended web address.

For further information on why it is important to reference accurately go to the Referencing and Plagiarism topic in Skills Plus available from the Library website: www.northumbria.ac.uk/skillsplus

You will find other useful help guides on Skills Plus to help you with the skills involved in writing your assessments and preparing for exams.

For further information on the APA style of referencing see the Concise Rules of the APA Style and the APA website http://www.apastyle.org/

Plagiarism and Cheating

Your attention is drawn to the University’s stated position on plagiarism. THE WORK OF OTHERS,

WHICH IS INCLUDED IN THE ASSIGNMENT MUST BE ATTRIBUTED TO ITS SOURCE (a full bibliography and/or a list of references must be submitted as prescribed in the assessment brief).

Please note that this is intended to be an individual piece of work. Action will be taken where a student is suspected of having cheated or engaged in any dishonest practice. Students are referred to the University regulations on plagiarism and other forms of academic irregularity. Students must not copy or collude with one another or present any information that they themselves have not generated.

For further information on Plagiarism, see the Referencing and Plagiarism topic on Skills

Plus. www.northumbria.ac.uk/skillsplus

Mapping to Programme Goals and Objectives:

This assessment will contribute directly to the following Undergraduate programme goals and objectives. (Insert an ‘X’ in boxes where applicable, referring to Undergraduate Programme Specification Appendix X for mapping details)

  1. Knowledgeable about the theory and practice of international business and management Objectives:

Students will be able to:

x         1. Acquire knowledge of functional areas of business and management.

  1. Acquire knowledge of specialist areas of business.

x x         3.              Apply their knowledge to business and management contexts.

 

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x            4. Conduct contemporary research into business and management.

  1. Skilful in the use of professional and managerial techniques and processes Objectives:

Students will be able to:

  1. Provide evidence of self reflection as a means of informing personal development planning.
  2. Demonstrate effective interpersonal communication skills and the ability to work in a team.

x 3. Demonstrate critical thinking skills . x 4. Demonstrate problem solving skills.

  1. Aware of ethical issues impacting on business and professional practice Objectives: Students will be able to:
    1. Identify an ethical dilemma in a business situation
    2. Suggest ethical solutions to this dilemma
  2. Employable as graduates

Objectives:

Students will be able to:

  1. In the context of securing graduate employment demonstrate the skills of self presentation.

 

 

Trait 0 – 29 30 – 39 40 – 49 50 – 59 60 – 69 70 – 79 80 – 100
Knowledge and Poor grasp of topic concepts or of Minimal awareness ofsubject area. Knowledge is adequate but limited Sound comprehension of Knowledge base is up-to-date and Knowledge and understanding is Exceptional scholarship for
Understanding awareness of what concepts are.   and/or superficial. topic. relevant, but also may be broad or deep. comprehensive both as to breadth and depth. subject.
Structure and Failure to apply Communication of In the most part, Reasoning and Higher order critical A mature ability to Outstanding ability to
Alignment relevant skills. Work is inarticulate and/or  knowledge

frequentlyinarticulate and/or

description/ assertion rather than argument argument are generally relevant but appreciation skills are displayed. A critically appreciate concepts and their apply, in the right measure, the skills
  incomprehensible. irrelevant. or logical reasoning is  not necessarily significant ability to inter-relationship is necessary to achieve
      used. Insufficient focus is evident in extensive. Awareness of apply theory, concepts, ideas demonstrated. Clear evidence of highly sophisticated and fluent challenges
      work presented. concepts and critical appreciation are apparent, but the ability to conceptualise, and/or to apply theory is slightly limited. their interrelationship is illustrated. independent thought. Presentation of work is fluent, focused and accurate. to received wisdom.

Module Specific Assessment Criteria

Trait 0 – 29 30 – 39 40 – 49 50 – 59 60 – 69 70 – 79 80 – 100
Knowledge Poor awareness of Minimal awareness Knowledge of SME- SME-financial Understanding of Very good An excellent ability to
and SME-financial SME-financial financial management management SME-financial understanding of apply SME-financial
Understanding management management theoretical ideas is theoretical ideas are management SME-financial management
  theoretical ideas. theoretical ideas. adequate but limited displayed in a theoretical ideas is management theoretical ideas to
      and/or superficial. comprehensive manner. Much relevant content is presented, but it is not always sufficiently extensive. displayed in a knowledgeabl e manner. theoretical ideas. the given business scenario/situation.
Structure and Work is inarticulate Communication of Application of theory Ability to apply theory Criticality regarding Appropriate level of An exceptional ability
Alignment and/or knowledge to the given business to the given business financial issues and ability to apply them to identify and
  incomprehensible. inarticulate and/or scenario/situation is scenario/situation is their potential to the given business critically assess
  Failure to apply irrelevant. Inability inadequate; financial evident, but limited solutions is also scenario/situation financial issues and to
  theory to the given apply theory to the issues and potential and criticality strong and application displayed. A mature develop and critically
  business given business solutions are regarding financial of theory to the given ability to critically evaluate potential
  scenario/situation; scenario/situation; described rather than issues and potential business assess both issues solutions to these
  lack of criticality lack of criticality critically evaluated. solutions is equally scenario/situation is and potential issues.
  regarding financial issues and potential solutions regarding financial issues and potential solutions   narrow. evident. solutions is presented in a focused and accurate manner.  

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Note: For those assessments or partial assessments based on calculation, multiple choice etc. Marks will be gained on an accumulative basis. In these cases, marks allocated to each section will be made clear.

Students must retain an electronic copy of this assignment and it must be made available within 24 hours of them requesting it be submitted.

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