Exhibit B ABCs Limited Profit and Loss statement for the year ended 31 December 2022 EUR...

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Exhibit B ABCs Limited Profit and Loss statement for the year ended 31 December 2022 EUR m Turnover 150 Cost of sales -90 Operating profit 60 Interest paid -15 Pre-tax profit 45 Corporation tax -12 Profit after tax 33 Dividends -20 Retained earnings 13 Exhibit C ABC's Limited Balance Sheet as of 31 December 2022 EUR m EUR m EUR m Assets Employed: Fixed (Net) Land & Buildings 200 Fixtures & Fittings 50 Vehicles 50 300 Current Assets Stocks 60 Debtors 100 Cash 40 200 Current liabilities Trade creditors -85 Dividends payable -20 Tax payable -12 502 -117 Net current assets 83 Total assets fewer current liabilities 15% debentures 2015-16 383 -100 283 Net assets Financed by: Issued share capital (par value 0.25) 100 Revaluation reserve 60 Profit and loss account 123 Shareholders' funds 283 Q3. Deliverables As ABC's Limited accountant you are asked to: a. Calculate expected net cash flow in 2023 without the new investment, assuming no changes in the level of net working capital. (10 marks) b. Prepare a report which covers: i. Financial performance and financial health compared with the sector as a whole, (10 marks) ii. Advise the Board of Directors as to how the proposed investment program might be financed. (30 marks) iii. An examination of other ways of using the cash surplus if this proposal does not materialize. (30 marks). Further guidelines: Overall word count; approx. 3,000 words Justify your answers and support your work with relevant literature and practical examples, linking theory and practice to substantiate arguments showing evidence of research surrounding the main argument or topics of the question(s)* Any use of Al should be clearly identified, including the prompts used, at the end of the assignment (not part of the word count). When using Al tools, students are expected to critically engage with the information provided by any Al tools (a critical reader always questions the information and points of view presented by the "writer" in a text and the context in which they are presented and engages in further reading/research.) Just using Al to do your work for you will be heavily penalised! Correct paraphrasing of work of other authors, citing in-text and referencing according to the British Harvard Referencing standard throughout the assignment is expected. * Please ensure to include the IDEA Academy cover sheet and adhere to the required assignment presentation formats the clarity and readability. * * Students are to refer to guidelines stated in Document 017 23 - Recognising and Avoiding Plagiarism Policy and Procedure and Document 069 22 - Guidelines for the Presentation of Assignments, available on Canvas under IDEA Academy Policies, Documents and Forms. Questions (answer all questions): Q1. Having regard to the theory and practice you have learnt about in class, critically discuss the concept of working capital management. (10 marks) Q2. Considering your answer to (1) above, explain why working capital is fundamentally important to the success and viability of an organisation. (10 marks) Q3. Scenario: ABC operates a chain of city-center furniture stores. It is 6% owned by the original family founders. Over the past decade annual sales growth in real terms has averaged 3%, although sales have fallen in the recent recession. No real growth is expected from existing operations in the next few years despite plans to continue to offer generous credit to customers. To achieve faster growth, ABC Limited is considering developing several out- of-town sites adjacent to giant supermarkets and DIY stores. During 2023 this will involve capital outlay of EUR50 million plus extra working capital requirements of EUR20 million to finance stock building. In recent years ABC Limited's capital expenditure, mainly store refurbishment and vehicle replacement, has averaged EUR20 million per annum and has been financed entirely from depreciation provisions. The stock market currently applies a price earnings ratio of 11:1 to ABC limited shares. The bank interest rate is currently at 8%. Table A gives information on key financial indicators for the stores sector and ABC Limited accounting statements for 2022 are summarized in Exhibits B and C. Exhibit A selected ratios for the retail sector Return on (long term) capital employed Operating profit margin Fixed asset turnover Stock period Gearing 14.3% (pre-tax) 26..2% 1.2 times 180 days 42% 3.2 times Interest cover Dividend cover 2.1 times Exhibit B ABCs Limited Profit and Loss statement for the year ended 31 December 2022 EUR m Turnover 150 Cost of sales -90 Operating profit 60 Interest paid -15 Pre-tax profit 45 Corporation tax -12 Profit after tax 33 Dividends -20 Retained earnings 13 Exhibit C ABC's Limited Balance Sheet as of 31 December 2022 EUR m EUR m EUR m Assets Employed: Fixed (Net) Land & Buildings 200 Fixtures & Fittings 50 Vehicles 50 300 Current Assets Stocks 60 Debtors 100 Cash 40 200 Current liabilities Trade creditors -85 Dividends payable -20 Tax payable -12 502 -117 Net current assets 83 Total assets fewer current liabilities 15% debentures 2015-16 383 -100 283 Net assets Financed by: Issued share capital (par value 0.25) 100 Revaluation reserve 60 Profit and loss account 123 Shareholders' funds 283 Q3. Deliverables As ABC's Limited accountant you are asked to: a. Calculate expected net cash flow in 2023 without the new investment, assuming no changes in the level of net working capital. (10 marks) b. Prepare a report which covers: i. Financial performance and financial health compared with the sector as a whole, (10 marks) ii. Advise the Board of Directors as to how the proposed investment program might be financed. (30 marks) iii. An examination of other ways of using the cash surplus if this proposal does not materialize. (30 marks). Further guidelines: Overall word count; approx. 3,000 words Justify your answers and support your work with relevant literature and practical examples, linking theory and practice to substantiate arguments showing evidence of research surrounding the main argument or topics of the question(s)* Any use of Al should be clearly identified, including the prompts used, at the end of the assignment (not part of the word count). When using Al tools, students are expected to critically engage with the information provided by any Al tools (a critical reader always questions the information and points of view presented by the "writer" in a text and the context in which they are presented and engages in further reading/research.) Just using Al to do your work for you will be heavily penalised! Correct paraphrasing of work of other authors, citing in-text and referencing according to the British Harvard Referencing standard throughout the assignment is expected. * Please ensure to include the IDEA Academy cover sheet and adhere to the required assignment presentation formats the clarity and readability. * * Students are to refer to guidelines stated in Document 017 23 - Recognising and Avoiding Plagiarism Policy and Procedure and Document 069 22 - Guidelines for the Presentation of Assignments, available on Canvas under IDEA Academy Policies, Documents and Forms. Questions (answer all questions): Q1. Having regard to the theory and practice you have learnt about in class, critically discuss the concept of working capital management. (10 marks) Q2. Considering your answer to (1) above, explain why working capital is fundamentally important to the success and viability of an organisation. (10 marks) Q3. Scenario: ABC operates a chain of city-center furniture stores. It is 6% owned by the original family founders. Over the past decade annual sales growth in real terms has averaged 3%, although sales have fallen in the recent recession. No real growth is expected from existing operations in the next few years despite plans to continue to offer generous credit to customers. To achieve faster growth, ABC Limited is considering developing several out- of-town sites adjacent to giant supermarkets and DIY stores. During 2023 this will involve capital outlay of EUR50 million plus extra working capital requirements of EUR20 million to finance stock building. In recent years ABC Limited's capital expenditure, mainly store refurbishment and vehicle replacement, has averaged EUR20 million per annum and has been financed entirely from depreciation provisions. The stock market currently applies a price earnings ratio of 11:1 to ABC limited shares. The bank interest rate is currently at 8%. Table A gives information on key financial indicators for the stores sector and ABC Limited accounting statements for 2022 are summarized in Exhibits B and C. Exhibit A selected ratios for the retail sector Return on (long term) capital employed Operating profit margin Fixed asset turnover Stock period Gearing 14.3% (pre-tax) 26..2% 1.2 times 180 days 42% 3.2 times Interest cover Dividend cover 2.1 times