Business Evaluation Report - Twanji Variety Stores

School of Accountancy
115.112 Accounting
Assignment 2
Business Evaluation Report
Semester 1, 2019
Please note that this assignment is due before Monday 13 May 2019,
11 p.m. New Zealand Time
Assignment 2 will be marked out of 100 and will contribute 20% to your final
grade.

ASSIGNMENT 2 INSTRUCTIONS
How to Approach this Assignment
 Please read all instructions before starting the assignment.
 You should first study the relevant material in the text and make sure you understand
the concepts covered.
Naming Convention and backups
a. Use the following naming convention for the file that you create: use
your Last Name Student ID number as the name of the file [Do not change the file
extension or you (and the marker) will not be able to use the file]. For example, if your
Last Name is Smith and your Student ID number is 88888888; your file will be
smith88888888.docx
b. Once you have started working on an assignment you should make backups. It pays
to rename different versions of your work. A simple way to do this is to use the Save
as file instruction and add a number or letter to the end of the file name. (This allows
you to go back to an earlier version.)
Assignment brief
Ms Chusan operates a variety shop in downtown Tinatown called Twanji Variety Stores. She
has just received the financial statements for the year ended 31 December 2018. She is
disappointed that although sales have increased, net profit has decreased. She would also
like some honest feedback on her management of the business and what she could do to
improve.
Required:
(i) Use the information in Appendix A to calculate the ratios for the business for the year
ended 31 December 2018. (20 marks)
Note: The ratio calculations must be shown in the Appendix C, ANALYSIS RATIOS TO BE
COMPLETED on page 5 of this document. Your calculations on this sheet may be
typed or hand written and then attached at the end of your report. Calculations should
not appear in the body of the report. A list of analysis ratios for use with Cunningham is
included in Appendix B. The comparative ratios for 2017 and the industry are already
given in Appendix C.
Prepare a report for Ms Chusan with your answers to (ii) and (iii) in the Discussion/
Analysis section. Use relevant ratios from Appendix C to justify your answers.
(ii) Discuss the profitability of Twanji Variety Stores and explain why the profit has
decreased, although sales have increased. In your discussion, include how the
profitability aligns with that of the industry. (25 marks)
(iii) Explain to Ms Chusan how certain ratios indicate the efficiency of management and
what these particular ratios show about the management of Twanji Variety Stores and
how it compares with the industry as a whole. (20 marks)
(iv) Conclude with your recommendations as to how Ms Chusan should address the issues
raised in (ii) and (iii). (20 marks)
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Report formatting: (15 marks)
 Answers should be well reasoned, comprehensive and include data from the financial
statements and the ratios you calculated in Appendix C.
 Your report should range from 600 to 900 words (does not include Appendix C).
 Marks will be allocated for the presentation of your report (refer marking grid Appendix
D).
 Guidelines for writing reports are given in Appendix E. It is also advisable to use the
Massey University resources regarding writing reports. Follow this link to the correct
section: OWLL Report
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