FIN4001 Explain the implications of finance as a resource within a business.
Assignment Brief
As part of the formal assessment for the programme you are required to submit an Introduction to Finance assignment. Please refer to your Student Handbook for full details of the programme assessment scheme and general information on preparing and submitting assignments.
Learning Outcome 1: Contrast the appropriateness of the different sources of finance to a business.
Learning Outcome 2: Explain the implications of finance as a resource within a business.
Learning Outcome 3: Produce simple financial statements in accordance with accepted principles.
Learning Outcome 4: Use financial information for decision making purposes.
Learning Outcome 5: Demonstrate a confident use of the financial terminology and conventions in communicating results.
Your assignment should include: a title page containing your student number, the module name, the submission deadline and a word count; the appendices if relevant; and a reference list in Arden University (AU) Harvard format. You should address all the elements of the assignment task listed below. Please note that tutors will use the assessment criteria set out below in assessing your work.
Question 1
You are the Chief Financial Officer at Touchdown Sports Inc., a leading manufacturer of protective equipment for use in contact sports.
The company manufactures a range of products, including shoulder pads for use by players of American football. These pads comprise a hard plastic shell with foam padding underneath, metal rivets and elastic straps. Touchdown Sports Inc. sells all of its products to retailers on a credit basis.
Estimated annual usage of hard plastic in Touchdown Sports Inc`s manufacturing process is 27,000 kilograms. This is used evenly throughout the year other than during July and August, when production increases to meet demand due to the start of the American football season in September, and during November, when production increases to meet demand prior to the Christmas holiday in December.
Inventory holding costs for hard plastic are estimated to be $1.75 per kilogram per year. The estimated cost of placing and processing each order of hard plastic is $14.
Throughout the year, it is estimated that hard plastic will cost an average of $0.90 per kilogram. However, forecast fluctuations in demand mean that the cost of hard plastic could vary from a maximum of $1.90 per kilogram and a minimum of $0.75 during the year.
Touchdown Sports Inc. imports hard plastic from Guangzhou Productions plc, China. Recent disputes with this supplier have led Touchdown Sports Inc. to maintain a buffer` inventory to manage the risk of disruption to this supply. Guangzhou Productions plc offers a 7.5% bulk purchase discount on orders of hard plastic of 10,000 kilograms or more.