Word Count: 3000max QUESTION 1 (200 marks)a)Discuss
Word Count: 3000max QUESTION 1 (200 marks)a)Discuss the factors that must be taken into account when providing a context for analysing the financial performance of a business. (15 marks) b)The following are extracts from the 2019 published financial statements of City-Hotels Group Plc., an international hotel and leisure company. City-Hotel Group Plc.Consolidated Income Statement for year ended 31 December 201920192018€’000€’000Revenue112,20093,400Cost of sales(51,300)(44,700)Gross profit60,90048,700Selling and administrative expenses(25,400)(21,500)Depreciation and amortisation(6,400)(5,600)Operating profit29,10021,600Loan interest(8,400)(5,400)Profit before tax20,70016,200Corporation tax(2,500)(1,800)Profit for the year18,20014,400Dividends paid (7,600) (5,400)City-Hotels Group Plc.Consolidated Balance Sheet at 31 December 201920192018€’000€’000ASSETSNon-current assetsProperty, plant & equipment (net book value)301,300240,600Intangible assets17,50010,400318,800251,000Current assetsInventories2,9002,400Accounts receivable5,6004,900Prepayments4,4004,100Cash and Bank9,8007,80022,70019,200Total assets341,500270,200EQUITYIssued share capital (note 1)7,2006,500Share premium39,10017,700Revaluation reserve84,50084,500Other reserves2,6002,200Retained earnings47,50036,900180,900147,800LIABILITIESNon-current liabilitiesLoans and borrowings130,90096,700Current liabilitiesTrade payables5,7004,400Accrued expenses9,2008,900Bank overdrafts2,7002,600Short term loans and borrowings10,7008,700Corporation tax liabilities1,4001,10029,70025,700Total Liabilities160,600122,400Total equity and liabilities341,500270,200Additional Information, note 1:Nominal (par) value per share in €cent25c25cMarket price / share, year-end, €cents930c750cRequired:(a)Calculate, for each year, 18 ratios under the headings of profitability, Use of assets, capital structure, liquidity and investment (60 marks)(b)(c) (b) Based on (a), comment on the company’s performance and position over the two years (70 marks)(c)Apply the Taffler & Tisshaw model of business failure prediction and calculate a z-score for the business for both 2019 and 2018 (20 marks)(d)Comment on your answers to (c) (10 marks)(e)Accounting statements are often accused of presenting a limited picture of a business.In the context of this statement discuss the limitations of ratio analysis. (25 marks) QUESTION 2 (200 Marks): The relevant literature debates how the entrepreneurial process occurs. Shane’s (2003) Individual Opportunity Nexus suggests a model to illustrate the entrepreneurial journey. Discuss this model in detail and include a minimum of 15 references. This discussion should include a debate with alternative perspectives on the entrepreneurial process.CriteriaPossible MarksHousekeeping10Introduction10Detailed discussion of Individual Opportunity Nexus60Quality of supporting sources applied in the discussion30Quality of discussion and debate of the literature50Conclusions from the review of the literature40Total200
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