Accounting for Managers (ACFI5020)
Shareholders and lenders, whilst not being the only stakeholders, provide capital to companies because they seek a return commensurate with the level of risk that they are willing to take.
It is within this context that the price of PSA Groupe ordinary shares has experienced a mixed performance over a number of years. The last ten year’s share price performance can be seen on the graph below:
In the world recession of 2008/2009 the share price fell to a low of €8.20 and then made a recovery. However, in 2012 the share price fell to an all-time low of €3.64 before climbing to a price of €19.75 on 27/09/17.
PSA Groupe is the manufacturer of European car brands such as Peugeot and Citroen and in 2017 also acquired the Opel and Vauxhall brands from General Motors. It is the second largest car manufacturer in the European car market, after Volkswagen, and currently has about 17% of the market (http://www.autoexpress.co.uk/vauxhall/98596/psa-completes-19bn-deal-with-gm-to-buy-opel-and-vauxhall)
You are required to do as follows:
Using the Annual Report and Accounts of PSA Groupe for the following years (see links):
2015 & 2016 https://www.groupe-psa.com/content/uploads/2017/02/rapport-annuel-2016-VA.pdf
2013 & 2014 https://www.groupe-psa.com/content/uploads/importedmedia/annual-results-2014-en.pdf
2011 & 2012 https://www.companyreporting.com/sites/default/files/annual-report-index/peugeot-sa-annual-results-report-2012.pdf
(a) Evaluate the performance of PSA Groupe in the following areas, using ratio analysis:
· Working capital efficiency
· Long term financial structure
· Investors’ perspective
You may also use earlier years’ financial accounts to supplement your analysis if you wish to be specific with certain trends that you have identified (see below for specific instructions).
In addition you could also consider the performance of PSA in comparison with its peer group of competitors.
You should summarise your findings and make particular reference to the interests of the different stakeholders of the company.
When undertaking any calculations use the ‘Total’ figures from the financial statements.
Note: Any accounting ratios for PSA must be calculated (and workings shown) and not extracted from external databases, although, further analysis may be supported by downloading ratios from external databases for competitor companies.
(15% will be awarded with regard to the relevance and accuracy of the ratios and 25% will be rewarded according to the quality of your written analysis)
When completing Part (a) take the following into account:
1. 5 years of analysis would be worthwhile.
2. Benchmarking to at least one competitor
3. Make sure that you explain why the ratios are changing and what the implications or conclusions of this are.
4. Don’t forget to comment on the views of specific stakeholders.
5. Contemplate your presentation. This work lends itself to the use of graphs, charts, tables and so on.
Considering your response to Task One, and any further reading, you are required to provide advice, accompanied by rationale, as to whether you would recommend a buy, sell or hold (if they are already owned) policy for investors/potential investors in PSA shares.
You are required to follow the link below and to read the material concerning the production process and philosophy followed by PSA Goupe. There are also some very informative and interesting videos within the link.
You must critically discuss the philosophies and approaches of the PSA manufacturing process and compare and contrast it with the theories and practices advocated and championed by the renowned Toyota Production System (TPS).
In addition, you should also consider, and comment on, the potential downsides of such philosophies in today’s turbulent global vehicle manufacturing environment?
Appropriate credible academic and practitioner literature sources must be used to support your critical analysis and the Harvard style of referencing must be adopted.
You are required to present well structured answers of no more than 3,000 words (excluding calculations) in total. The words should be allotted according to the percentage marks awarded for each task.
Learning Outcomes specifically assessed:
Subject Specific Knowledge and Skills
1. Identify and critically appraise the different components of a financial report, and assess the adequacy of current international financial reporting requirements for a greater understanding of company performance
2. Analyse and interpret financial data and information, evaluate their relevance and validity, and synthesise a range of information in the context of business situations
3. Demonstrate the ability to use conventional management accounting and financial management techniques to produce appropriate information for management to aid planning, control and decision making
4. Evaluate the usefulness of contemporary management accounting techniques in measuring business performance
5. Critically appraise management accounting techniques with respect to their effectiveness and identify any weaknesses inherent in their use
Non Subject Specific and Cognitive Skills
1. Manage own learning, using the available range of resources, and ability to conduct research into business and management issues
2. Ability to collect relevant information relating to a given situation, analyse that information and synthesise it into an appropriate form in order to evaluate decision alternatives
3. Demonstrate a practical and integrative approach to a problem area or issue
4. Demonstrate rigour of academic arguments as well as the application of theory
Assignments will be graded according to the general postgraduate assessment criteria and you should also bear the following in mind:
· Evidence of critical judgement in selecting, ordering and analysing content in order to present a sound argument
· The demonstration and understanding of relevant concepts and models
· The demonstration of insight and originality in responding to the assignment
· The provision of well-referenced evidence
Students are required to achieve an average of 50% in order to pass this module. You must achieve at least 40% in both this assignment and in the Business Simulation work.
All of the usual University regulations will apply with regard to the late submission of work and plagiarism.
Submission date: 15th January 2018, by 11.59 p.m., via Turnitin (the link will be available on the module Blackboard site.