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appropriate accounting and financial techniques to support your conclusions and recommendations 1 Critically appraise Valexs financial performance during 2013 relative to 2012 Your appraisal

appropriate accounting and financial techniques to support your conclusions and recommendations. 1. Critically appraise Valex’s financial performance during 2013 relative to 2012. Your appraisal should provide a detailed analysis of Valex’s sales, gross profit, overheads and profitability, including a commentary on the trading within each division. As part of your appraisal you should discuss the THREE issues or risks which you believe could most significantly affect Valex’s future financial performance, and which the Board of Valex should address in their current decision making processes. (30 marks) 2. In the context of the bank’s concerns over the debt repayment due on 31st December 2014, identify TWO reasons for poor cash generation within Valex in 2013 and recommend ways in which the company could address the cash flow issues you have identified. You should refer to the Statement of Cash Flows and Operating Cash Cycle to support your analysis. (12marks) 3. Use an appropriate costing technique to recommend whether Valex should offer a 10% discount to JS Stores to secure the tender. Your answer should explain the rationale behind your recommendation and discuss at least THREE other factors which the Board should take into account in its final appraisal of the situation. (12 marks) 4. Critically evaluate Inpharm’s trading results and cash flows in 2013 against its budget for 2013, using your interpretation of the variances as well as other information supplied in the case study to comment on any vulnerabilities in Inpharm’s profit and cash forecasts for 2014-2018. (18 marks) 5. Recommend whether Valex should participate in the JV with Inpharm, or seek to buy Inpharm, or walk away from both opportunities. You should refer to the results of the investment appraisal for each opportunity and discuss at least FOUR factors (financial or non-financial) which the Board should take into consideration in relation to the option that you recommend. (18 marks) 6. Demonstrate the impact of raising equity to fund the option you recommended in Question 5, describing TWO aspects of equity investment that might prove challenging for the company, and supporting your answer with calculations of Valex’s liquidity, capital structure and financial risk under your chosen funding scenario. (10 marks) Total marks 100 marks

 

May 24 2020 View more View Less

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