INTRODUCTION

TASK 1:

Task 1.1:  Identify different sources of finance available to Milner Chemicals Plc.

Task 1.2: Assess the implications of the different sources.

Task 1.3: What are the advantages and disadvantages of obtaining a listing in a stock exchange like the London Stock Exchange?

Task 1.4: What are the methods of obtaining a listing in the London Stock Exchange?

Task 1.5: What are the methods of raising capital in the London Stock Exchange?

TASK 2:

2.1 a) calculate the cost of ordinary Share Capital.

b) Calculate the cost of preference Share Capital.

c) Calculate the cost of debenture Capital after tax.

d) Calculate the weighted average cost of Capital of the company.

Task 2.2, 2.3, 2.4

The directors want to have a report explaining the following points.

a) Importance of financial planning.

b) Informational needs of Directors, Senior Managers and Junior Managers.

c) Impact of finance on the financial statements

TASK 3

TASK 3.1

i) Prepare the Production Budget in units and in monetary terms. Assume that there will be no opening or closing stock of either product or raw material for the following year.

ii) Produce the Budgeted Profit and Loss Account for the following year.

iii) The company expects to earn a Budgeted Profit of £125,000 next year. Reducing the selling price of Gold Tap will increase the volume of sales without affecting the fixed production overhead cost. Calculate the level of sales required to produce the required level of profits.

TASK 3.2

i) Calculate the fixed overhead absorption rate per direct labour hour.

ii) Calculate the fixed overhead cost per unit for each product.

iii) Calculate the budgeted production cost per unit for each product.

iv)  The company adds 25% mark up to the production cost to the selling price. Calculate the budgeted selling price per unit for each product.

TASK 3.3

a) Calculate the following:

i) Pay Back Period

ii) Accounting Rate of Return.

iii) Calculation of Net Present Value

b) The company uses the following criteria to evaluate the viability of an investment appraisal proposal. I) a target payback period of 4 years and ii) NPV Positive. Will the proposal to buy the machine meet the criteria of the company?

TASK 4

Task 4.1: Name the main financial statements prepared by business Organisations annually.

Task 4.2: Show the different formats of Income Statements used by manufacturing companies, trading organisations and clubs.

Task 4.3:

a) Computation of the Ratios for Wordsworth Plc for both 2013 & 2014

b) Provide adequate explanations and comments on each of the ratios which support the view of the shareholders dissatisfied with Wordsworth Plc performance.

CONCLUSION