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LO1 Evaluate the role and purpose of the financial management function

Assessment Brief – Autumn 2025

Unit 23: Financial Management

The price quoted here is for the complete assignment which includes both Assignment Part 1 and Assignment Part 2 (4000 words)

Unit Number & Title

23: Financial Management

Academic Year

2025/26

Unit Tutors

 

Assignment Title

Part 1: Role of Financial Management and Sources of Finance

Part 2: Investment Appraisal and Working Capital Management

Issue Date

w/c 06/10/2025

Submission Date

19th December 2025 – for both assignment parts

IV Name & Date

30th September 2025

Assignment Part 1

Submission Format

The submission is in the form of a report. The recommended word limit for the case study is 2,000 words, although you will not be penalised for going under or exceeding the total word limit. All work must be supported with suitable academic research and referenced correctly using the Harvard referencing system. You will need to provide a bibliography using the Harvard referencing system. Inaccurate use of referencing may lead to issues of plagiarism if not applied correctly.

Unit Learning Outcomes

LO1 Evaluate the role and purpose of the financial management function

LO2 Determine alternative sources of business finance including contemporary methods for different business situations

Transferable Skills and Competencies Developed
  • Reasoning and analytical skills.
  • Written communication using a range of media.
  • Effective communication of relevant information across the organisation and to appropriate stakeholders.
  • Creation and interpretation of information, showing how that information can be used most effectively to add value to an organisation.

Vocational Scenario

Organisation

A large accountancy firm that undertakes extensive business consultancy work for their client base. They have a central London head office and regional UK offices in Birmingham and Southampton. To serve their clients in Asia, they also have a small regional office in Singapore. Their clients are typically large organisations, but the firm also has a policy of taking on smaller firms as niche clients, where they feel there is potential for fast growth. One such client is ABC Ltd., an SME that needs to raise £50 million funding for a new project which will be operational in 5 years.

Role

You have recently joined this accountancy firm as a Graduate Trainee attached to their UK SME (Small and Medium Enterprises) Unit, offering accountancy and financial management services to businesses that typically have a turnover ranging from £1 m to £50 m. As part of your ongoing training, you have been asked to undertake some activities, as described below.

Assignment Activity and Guidance

Your supervisor, one of the firm’s key Account Managers, has asked you to prepare a report that will be used to market and promote its accounting services to new and existing clients. The working title you have been given for the report is ‘The Role of Financial Management and Evaluation of Sources of Finance’. The report must be presented in an engaging and practical way, covering relevant academic theory, making suitable use of headings, images and illustrations. To prepare this report, please consider doing the following:

  1.  Assess key principles of financial management required for organisations to operate effectively and sustainably.
  2. Critically evaluate the contribution financial management can make for organisation like ABC Ltd. for meeting its objectives and managing risk.
  3. Evaluate the role and purpose of the financial management function for a range of different organisations (both SMEs and large).
  4. Make justified recommendations for effective financial management to achieve long- term organisational success in complex and risk-averse environments for an SME such as ABC Ltd.
  5. Discuss different sources of finance available for small, medium and large organisations, considering their respective advantage and disadvantages. Here you should consider shares, debentures, lease, venture capital, overdraft (OD), trade credit etc.
  6. Analyse a range of sources of business finance appropriate for meeting different organisations’ needs and plans, considering the specific needs of the client firm ABC Ltd.
  7. Justify the impact of alternative sources of business finance on the operations and long-term success of organisations.

 

Recommended Resources

Textbooks

AERTS, W. and WALTON, P. (2017) Global Financial Accounting and Reporting: Principles and Analysis. 4th Ed. Cengage Learning EMEA.

ATRILL, P. and McLANEY (2018) Accounting and Finance for Non-Specialists. 11th Ed. Prentice Hall.

ATRILL. P. (2017) Financial Management for Decision Makers. 8th Ed. Harlow: Pearson.

CORNWALL, J. R., VANG, D. O. and HARTMAN, J. M. (2019) Entrepreneurial

Financial Management: An Applied Approach. 5th Ed. London: M.E. Sharpe.

WEETMAN, P. (2019) Financial and Management Accounting: An Introduction. 8th Ed. Harlow: Pearson.

Websites

www.accaglobal.com Association of Chartered Certified Accountants (General reference)

www.accountingcoach.com Accounting Coach Online free courses (General reference)

www.cimaglobal.com Chartered Institute of Management Accountants Tutor Resource Hub

www.icaew.com Institute of Chartered Accountants in England and Wales Resources, Financial Reporting

(General reference)

Assignment Part 2

Submission Format

The submission is in the form of a report which must be clearly worded, well-structured and should make use of appropriate business language and terminology. It can also include clearly labelled tables and charts, and it will accompany and support the appropriately constructed financial statements (income statement and statement of financial position) for the business in question. The word count is 2,000 words, although you will not be penalised for going under or exceeding the total word limit. A bibliography should be provided using the Harvard referencing system. Inaccurate use of referencing may lead to issues of plagiarism if not applied correctly.

Unit Learning Outcomes

LO2 Determine alternative sources of business finance including contemporary methods for different business situations (Partially)

LO3 Evaluate approaches to working capital management within an organisation.

LO4 Recommend alternative investment appraisal techniques to inform decision making.

Transferable Skills and Competencies Developed
  • Managing financial data.
  • Written communication using a range of media.
  • Manipulating and interpreting data using different techniques.
  • Effective communication of relevant information across the organisation and to appropriate stakeholders.
  • Creation and interpretation of information and showing how that information can be used most effectively to add value to the organisation.
  • Ability to use quantitative skills to manipulate data, evaluate, estimate and model business problems.
  • Application of accounting knowledge to consistently deliver high-quality, accurate data and information in a timely fashion.

Vocational Scenario

The organisation is the same as in Part 1. Having successfully completed your six-month probation as a Graduate Trainee at the accountancy firm, you have now been attached to a unit in the firm that deals with the provision of accountancy and consultancy services to small businesses that are typically set up as sole traders, not-for-profit or partnerships. The firm is careful about which small and emerging businesses it works with, as it seeks to identify growth potential and work with clients that have scalable business models.

You have now been asked to work with a start-up business that your firm has just taken on as a new client. The business is particularly in a need of support and guidance with working capital management and identification of the right project. They have plenty of project options to choose from but there is limited availability of finance. You are required to carry out investment appraisal of those project options, followed by justified recommendations.

Assignment Activity and Guidance

Your supervisor, one of the firm’s key Account Managers, has asked you to prepare a report that will be used to market and promote its accounting services to new and existing clients. The working title you have been given for the report is ‘Investment Appraisal and Working Capital Management’. The report must be presented in an engaging and practical way, covering relevant academic theory, making use of, for example, headings, images and illustrations. To prepare this report, please consider doing the following:

  1. Define working capital and its elements and appraise a range of approaches of managing working capital.
  2. Evaluate different techniques for measuring the working capital positions of an organisation. Discuss inventory management systems, LIFO, FIFO, AVCO, EOQ, accounts receivables/payments management, early payment discount etc.
  3. From the data provided, you are required to calculate the closing inventory-in-trade and profit that would be shown using the following:

Required:

  • 3a) FIFO (first in, first out), 3b) LIFO (last in, first out),
  • 3c) AVCO (average cost) methods on a perpetual inventory basis.

Please indicate the total value of inventory after each transaction.

Bought

Sauvignon Blanc bottles

Sold

Sauvignon Blanc bottles

January

200 at £10 each

February

100 at £20 each

April

200 at £25 each

June

50 at £30 each

September

250 at £30 each

November

200 at £35 each

October

200 at £40 each

December

200 at £50 each

4. Critically evaluate working capital management approaches and techniques to ensure that the organisation operates solvently and successfully in diverse and complex environment. Provide examples from different organisation.

5. Compare the advantages and disadvantages of different approach of managing working capital position of an organisation such as ABC ltd.

6. The table below provides information from the accounts of the company XYZ Ltd. Please do the following:

  • 6a. Calculate working capital and ALL possible ratios (AT LEAST 12).
  • 6b. Evaluate and recommend on the effective working capital management if it has improved or deteriorated in the year 2024.

Yoursupervisor,oneofthefirm’skeyAccountManagers,hasaskedyoutoprepareareport that will be used to market and promote its accounting services to new and existing clients. The working title you have been given for the report is ‘Investment Appraisal and WorkingCapitalManagement’.Thereportmustbepresentedinanengagingandpractical way, coveringrelevant academictheory,making useof,forexample, headings, images and illustrations. To prepare this report, please consider doing the following:

1. Define working capital and its elements and appraise a range of approaches of managing working capital.

2. Evaluate different techniques for measuring the working capital positions of an organisation. Discuss inventory management systems, LIFO, FIFO, AVCO, EOQ, accounts receivables/payments management, early payment discount etc.

3. From the data provided, you are required to calculate the closing inventory-in-trade and profit that would be shown using the following:

Required:

  • 3a) FIFO(firstin,firstout),
  • 3b) LIFO (last in, first out),
  • 3c) AVCO(averagecost)methodsonaperpetualinventorybasis.

Please indicate the total value of inventory after each transaction.

Bought Sauvignon       Blancbottles Sold Sauvignon       Blancbottles
January 200at £10 each February 100at £20 each
April 200at £25 each June 50at £30 each
September 250at £30 each November 200at £35 each
October 200at £40 each December 200at £50 each

4. Critically evaluate working capital management approaches and techniques to ensure that the organisation operates solvently and successfully in diverse and complex environment. Provide examples from different organisation.

5. Compare the advantages and disadvantages of different approach of managing working capital position of an organisation such as ABC ltd.

6. The table below provides information from the accounts of the company XYZ Ltd. Please do the following:

  • 6a. Calculate working capital and ALL possible ratios (ATLEAST12).
  • 6b.Evaluate and recommend on the effective working capital management if it has improved or deteriorated in the year 2024.

INCOME STATEMENT FOR YEAR ENDING 31ST MARCH

 

2024 (£000)

2025 (£000)

Revenue

160

180

Opening inventory

10

14

Purchases

100

130

Closing inventory

14

24

Cost of sales

96

120

GROSS PROFIT

64

60

Less Expenses:

 

 

Administration expenses

18

24

Distribution expenses

12

16

Total Operating Expenses

30

40

OPERATING PROFIT

34

20

Interest payments (Debentures)

1

1

NET PROFIT BEFORE TAX

33

19

Taxation

15

6

NET PROFIT AFTER TAX

18

13

Dividends: Ordinary (Proposed)

10

7

RETAINED PROFIT

8

6

SOFP (Statement of Financial Position) AS AT 31ST MARCH

 

2024 (£000)

2025 (£000)

Non-current Assets

 

 

Tangible Assets

88

86

Current Assets

 

 

Inventory

14

24

Trade receivables

20

60

Bank

3

1

Total Assets

125

171

Current Liabilities

 

 

Trade payables

10

62

Taxation

15

6

Proposed dividend

10

7

Total Current Liabilities

35

75

Non-current Liabilities

 

 

Long Term Loan

20

20

Debentures

20

20

Total Non-current Liabilities

40

40

Total Liabilities

75

115

Net Assets

50

56

Capital

 

 

Ordinary shares (Nominal value £1)

40

40

Retained earnings

10

16

TOTAL CAPITAL

50

56


Note: All purchases and sales are made on credit.

7. Review factors that influence investment decision making to recommend alternative investment appraisal techniques. Recommend range of DCF (discounted cash flow) and non-DCF techniques to support long term capital expenditure decisions. Consider different appraisal techniques along with their merits and demerits.

8. The board of Meridian PLC is considering two mutually exclusive investments in new equipment. Consider the following data provided for each of the two projects:

 

Project 1

Project 2

 

£000

£000

Cost

200

120

Expected annual operating profit per year:

 

 

Year 1

58

36

Year 2

(2)

(4)

Year 3

4

8

Estimated residual value after 3 years

14

12

The company has a cost of capital of 11%. It uses straight line depreciation.

  • 8a) Using payback, NPV and IRR, make a case to the board for which, if any, of the two projects they should accept.
  • 8b) Assuming that the project is to go ahead, make evidence-based judgements on recommendations based on long-term investment opportunities. Also recommend what you consider to be the most suitable sources of finance, both internal and external. Part of this response can be presented in a bullet-point format

Recommended Resources

Textbooks

AERTS, W. and WALTON, P. (2017) Global Financial Accounting and Reporting: Principles and Analysis. 4th Ed. Cengage Learning EMEA.

ATRILL, P. and McLANEY (2018) Accounting and Finance for Non-Specialists. 11th Ed. Prentice Hall.

ATRILL. P. (2017) Financial Management for Decision Makers. 8th Ed. Harlow: Pearson.

CORNWALL, J. R., VANG, D. O. and HARTMAN, J. M. (2019) Entrepreneurial Financial Management: An Applied Approach. 5th Ed. London: M.E. Sharpe.

WEETMAN, P. (2019) Financial and Management Accounting: An Introduction. 8th Ed. Harlow: Pearson.

Websites

www.accaglobal.com Association of Chartered Certified Accountants (General reference)

www.accountingcoach.com Accounting Coach Online free courses (General reference)

www.cimaglobal.com Chartered Institute of Management Accountants Tutor Resource Hub

www.icaew.com Institute of Chartered Accountants in England and Wales Resources, Financial Reporting

(General reference)

Learning Outcomes and Assessment Criteria

Pass

Merit

Distinction

LO1 Evaluate the role and purpose of the financial management function

P1 Assess key principles of financial management required for organisations to operate effectively and sustainably.

P2 Evaluate the role and purpose of the financial management function for a range of different organisations and contexts.

M1 Critically evaluate the contribution financial management makes towards an organisation meeting objectives and managing risk.

D1 Make justified recommendations for effective financial management to achieve long-term organisational success in complex and risk-averse environments.

LO2 Determine alternative sources of business finance including contemporary methods for different business situations

P3 Discuss alternative sources of business finance for different business situations in SME and large organisations.

M2 Analyse a range of sources of business finance appropriate for meeting different organisations’ needs and plans.

D2 Justify the impact of alternative sources of business finance on the operations and long-term success of organisations.

LO3 Evaluate approaches to working capital management within an organisation

P4 Appraise a range of approaches to managing working capital in an organisation.

P5 Evaluate different techniques for measuring the working capital position of an organisation.

M3 Compare advantages and disadvantages of alternative approaches and techniques to successfully managing the working capital position of an organisation.

D3 Critically evaluate working capital management approaches and techniques to ensure that organisations operate solvently and successfully in diverse and complex environments.

LO4 Recommend alternative investment appraisal techniques to inform decision making

P6 Review factors that influence investment decision making to recommend alternative investment appraisal techniques.

P7 Calculate investment viability using different investment appraisal techniques to inform long-term investment decision making.

M4 Recommend a range of DCF and non-DCF techniques to support long-term decisions on capital expenditure.

D4 Make evidence-based judgements on recommendations based on long-term investment opportunities.

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Recent Papers

All About Unit 23: Financial Management

Unit 23: Financial Management is all about how money is planned, controlled and checked inside a business. The assignment for this unit does not stay at theory level. It usually asks students to work with real-style figures for a company or case study, so they can see how decisions are made using actual numbers, not guesses.

In the Unit 23 assignment, students are often asked to:

  • prepare basic financial documents such as budgets, cash-flow forecasts, income statements and statements of financial position

  • explain different sources of finance a business can use, and when each one is suitable

  • use tools like breakeven analysis and ratio analysis to judge whether a business is profitable, liquid and stable

  • give clear recommendations to improve performance, manage costs or support future growth.

The work is practical. Students need to show correct calculations and then explain, in simple terms, what those results mean for the business. For example, is there enough cash to pay bills on time? Is profit strong enough to support expansion? Are costs under control?

Why the Unit 23: Financial Management assignment matters

This unit is important because almost every business decision links back to money. Employers want people who can read basic accounts, understand a budget and avoid risky choices. By completing the Unit 23 assignment properly, students:

  • become more confident with financial language and documents

  • learn how to spot problems early, such as poor cash-flow or falling profit

  • practise making recommendations based on real evidence, not opinion.

The skills from Unit 23 are also useful for future study. Higher-level business and accounting modules expect students to already understand financial statements and simple ratios. A strong Unit 23 assignment gives that foundation and makes later topics, like corporate finance or strategic planning, much easier to handle.

For anyone thinking about running or supporting a small business, this unit is vital. Knowing how to plan cash-flow, choose the right type of finance and read key numbers can be the difference between a business surviving or failing. The assignment gives a safe place to make mistakes, learn from them and build good habits before dealing with real money.

Sample Answer of Unit 23

LO1 Evaluate the role and purpose of the financial management function

1. Key principles of financial management for effective and sustainable organisations

For an organisation to run well in the short term and survive in the long term, it needs strong financial management. Some key principles help any business, large or small, to operate effectively and sustainably.

a) Clear financial objectives linked to strategy

Financial management should start with clear objectives that support the overall strategy of the organisation. Common financial aims include:

  • staying liquid (able to pay bills when they fall due)

  • making an acceptable profit

  • growing in a controlled way

  • protecting the value of shareholders’ investment.

These objectives guide day-to-day decisions, such as pricing, cost control and investment. If financial goals are not linked to strategy, departments may work in different directions, which can damage long-term performance (Atrill, 2017).

b) Cash flow and working capital management

Even profitable businesses can fail if they run out of cash. A core principle is to manage cash flow carefully by:

  • monitoring the timing of cash inflows and outflows

  • controlling stock levels

  • managing trade receivables and payables sensibly.

Effective working capital management helps an organisation pay wages, suppliers and interest on time. It also reduces the need for emergency borrowing, which supports financial stability and sustainability (Atrill and McLaney, 2018).

c) Budgeting and financial planning

Budgets turn strategic plans into numbers. They set targets for income, costs and cash for a specific period. Good financial management uses budgets to:

  • plan how resources will be used

  • coordinate activities between departments

  • monitor actual performance against targets

  • take corrective action when results deviate from plan.

This planning principle supports sustainable operations, because managers can see early warning signs and adjust before problems become severe (Weetman, 2019).

d) Investment appraisal and control of capital spending

Another principle is to evaluate major investment projects carefully before committing money. Techniques such as net present value (NPV) and internal rate of return (IRR) help assess whether future cash flows justify the initial outlay (Atrill, 2017).

Sound investment appraisal helps organisations:

  • select projects that add value

  • avoid projects with poor or uncertain returns

  • use scarce capital in the most effective way.

Ongoing monitoring of capital projects is also important, to ensure they are delivered on time, within budget and still aligned to strategic goals.

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