Accounting for Managers (ACFI5020)
Referral Assignment 2016/17
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 Hyundai Motor Company ordinary shares has experienced a mixed performance over a number of years. The last fifteen year’s share price performance can be seen on the graph below:
As can be seen from the graph above the company did perform well in this century until the ends of 2013.
After 2013 note that the share price has fallen substantially (be careful with the scale on the ‘Y’ axis above as it has been adjusted and is not consistent at all price levels). The share price has fallen from in excess of 260,000 South Korean Won (SKW) per share in 2013 to 137,500 SKW in 2017 (as at 03/02/17). Note that this is a reduction of nearly 50% in shareholder wealth over this period. For information, as at 03/02/17 €1 = 1,226.00 South Korean Won.
You are required to do as follows:
Task One
(You need the data under the heading: Financial Statements: Annual Reports. You then need the consolidated statements. For instance, these begin on page 82 of the 2015 Annual Statement).
You should:
- Evaluate the performance of Hyundai in the following areas, using ratio analysis:
- Profitability
- Liquidity/Solvency
- Working capital efficiency
- Long term financial structure
- Investors’ perspective
You must 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 Hyundai in comparison with its peer group of competitors (see below).
You should summarise your findings and make particular reference to the interests of the different stakeholders of the company.
Note: Any accounting ratios for Hyundai 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.
(40%)
(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:
- 5 years of analysis would be worthwhile.
- Benchmarking to at least one competitor
- Make sure that you explain why the ratios are changing and what the implications or conclusions of this are.
- Don’t forget to comment on the views of specific stakeholders.
- Contemplate your presentation. This work lends itself to the use of graphs, charts, tables and so on.
Task Two
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 Hyundai shares.
(10%)
Task Three
Lee and Jo (2007, P3336) state that, “Korean automakers are no exception in attempting to adopt TPS [Toyota Production System], so as to enhance their operational efficiencies and business competitiveness. TPS has been a prime benchmark for Korean automakers, as they have viewed Toyota as an exemplary role model, having made successful inroads into global markets.”
Following on from this Lee and Jo (2007) go on to indicate that for a variety of “socio-contextual and organisational reasons” (p3336) other companies, such as Hyundai, may go on to develop ‘deviant’ forms of TPS within their own context.
You are required to consider the reasons why TPS may not be adopted by other car manufacturers, such as Hyundai, in the exact image of TPS. You should provide a critical analysis of these reasons (including a wide range of supporting academic literature, beyond Lee and Jo (2007)). In addition, given that the authors were writing in 2007 you should provide a consideration of the possible consequences (positive and negative) of TPS (often referred to as JIT) within the turbulent manufacturing environment of 2017.
Your work must be supported by appropriate and credible academic and practitioner literature in order to support your critical analysis and the Harvard style of referencing must be adopted.
(50%)
(Total 100%)
Reference List
Lee, B.-H. and Jo, H.-J (2007) ‘The mutation of the Toyota Production System: adopting the TPS at Hyundai Motor Company’, International Journal of Production Research, Vol. 45, No.16, 15th August, 3665-3679.
Further Information:
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
- 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
- Analyse and interpret financial data and information, evaluate their relevance and validity, and synthesise a range of information in the context of business situations
- 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
- Evaluate the usefulness of contemporary management accounting techniques in measuring business performance
- Critically appraise management accounting techniques with respect to their effectiveness and identify any weaknesses inherent in their use
Non Subject Specific and Cognitive Skills
- Manage own learning, using the available range of resources, and ability to conduct research into business and management issues
- 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
- Demonstrate a practical and integrative approach to a problem area or issue
- 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: 4th May 2017
