MAJAN COLLEGE (UNIVERSITY COLLEGE) FACULTY OF BUSINESS MANAGEMENT STUDENT ASSIGNMENT COVER SHEET

Module Name Module Code

SMALL BUSINESS FINANCE FC37-3

1 Individual Report + Group Discussion (40% weighting)

Assessment No. Assessment Type:

STUDENT MCUC NUMBER:

Please note that a grade will only be given to those whose student number is noted on this form. Please ensure that the student numbers from all group members are recorded accurately. Submission Date: MODULE TUTOR: 24.12.2011 KASI VISWANATHAN J

DECLARATION y The work contained in this assignment is my own and that all materials and sources used have been acknowledged. y I/We have not copied or colluded in part or in whole, or otherwise plagiarised the work of other students. y This assignment has not been submitted for previous assessment in any other subject or to a substantial extent has been accepted for the award of any other unit, module, degree or diploma of a university or any other institute, except where due acknowledgement is made in the text. y I/We confirm that I/we have read, understood and followed the guidelines for assignment submission and presentation provided by the lecturer. y I/We understand that this assignment may be retained on the database and used to make comparisons with other assignments in future. y I/We have made a copy of my assignment y This work may be photocopied and/or communicated for the purpose of identifying plagiarism. y I/We give permission for a copy of this marked assignment to be retained by the faculty of Business Management for the purpose of course reviews by external examiners and to be used as a resource by Majan College. y I/We understand that unauthorized late submission without a valid written extension will be marked as per the college policy mentioned in the students handbook section 18.5.

Do not write on this page Grading Criteria Literature Review (Written) Argument/Analysis (Written) Language and Referencing (Written) Inter personal/group discussion skills Max. Marks 20% 50% 10% 20% Marks Given

Main Instructions: y y y y y Read the given case carefully. Read the questions given at the end of the case. Collect relevant academic research articles and general information on the related topic. Write an individual report based on the budgets prepared, your reading of academic articles and information collected from the case. After the submission of the report the students should form into groups of 4 to 5 students and are expected to conduct a group discussion in front of the class based on the written work.

General instructions: 1) The written work should be in verdana font. The font size should be 10 with 1.5 spacing. The report should not exceed two thousand five hundred words. 2) All sources of material collected and used should be fully referenced using the Harvard referencing style. 3) Each group will be given a question/scenario based on the report submitted for discussion. You are expected to show your in-depth understanding by debating and discussing the topic by relating to the given question/scenario. The duration of the group discussion should not exceed 40 minutes. 4) You are expected to maintain an electronic copy of your written work. You can refer to your report when you are engaged in the discussion but you should not read from it directly. 5) Any plagiarized work will be penalised. Refer to the penalties for Plagiarism and academic offenses in the Students handbook sections 28 and 29. 6) If you do not submit the essay and/or remain absent for the group discussion, a grade G (0) will be recorded and you will be deemed to have failed this part of the modules assessment. See students handbook section 18.5. 7) The soft copy of the assignment should be submitted through MOVE on or before the due date.

Grade for the written work will be based on: a) b) c) d) e) Evidence of understanding the case Evidence of wider reading Critical thinking and analysis Creative solutions Clarity of expression

Grade for group discussion will be given, where appropriate for: a) b) c) d) e) f) Self reflection/ Leadership Analysis Communication Interpersonal skills/control emotions/support Persuasive Convincing ability Ability to work in team

General grading criteria used for assessing students work

GRADE A

CRITERIA An excellent answer. Shows evidence of relevant reading; applies appropriate examples; constructs logical analysis and argument; draws to an appropriate conclusion. Displays use of excellent language using appropriate terminologies and structure As for A grade but lacks in comparison, either in terms of depth of argument, the appropriateness of examples, or the logic and conclusion; evidence of relevant reading must be shown. Demonstrates good knowledge of some of the principles and theories involved. Limited analysis, evaluation and research. Worthy of a pass but tends to be more descriptive with little analysis. no/poor examples and illustrations; limited evidence of relevant reading Not worthy of a pass but does contain some relevant argument.

C D E

Work of little academic merit

F
Work of no academic merit.

FNon Submission

Small Business Finance Sept 2011 Jan 2012 Individual written report + Group Discussion based on the given case Assessment 1
You are required to read the given case of Majan Travel LLC and write an individual report based on the requirements given at the end of the case and conduct a group discussion in front of the class. y y Please note that the written part of the assessment is an individual work. Group Discussion (Oral part of the assessment) is a group work.

Majan Travel LLC. Majan Travel LLC (MT) organises holidays abroad especially for the Omani clients travelling abroad to UK. The company arranges and books both flights and hotels. The flight arrangements are made in such a way that the air operators take care of transport costs, airport charges and fuel surcharges in the price agreed with Majan Travel LLC. The contracts with the hoteliers require them to deal with all local arrangements, including transfers from airports to hotels and local activities where these are a feature of particular holidays. All holidays are booked and paid by customers through agents appointed by Majan Travel LLC. By having to deal only with airlines, hotels and travel agents, Majan Travel LLC is able to be administratively streamlined and, its management believes, efficient and price-competitive. MTs holidays are of two types: Summer Beach Holidays and Winter Sports Holidays. The company charges a flat rate for both holidays, distinguishing only between the beach holidays and the winter sports. An unusual feature of MTs holidays is the fact that the clients must make full payment with booking. Although this is unusual, MT is able to sustain this policy by being very price-competitive. The management believes that any possible loss of custom through following this policy is outweighed by the knowledge that bookings, once made, are certain from the companys point of view. Further information about the company and forecasts for the next year, 2012, is as follows: 1. Travel agents deduct a 10% commission from the full price of each holiday before remitting the other 90% to the company at the time of booking.

2. Winter sports holidays cost the customer OMR 300 each and beach holidays cost OMR 275 each. 3. Flights and hotel accommodation are booked by MT as soon as the booking is received from a customer. Airline charges for both types of holiday are OMR 100 per passenger. Hotel charges are OMR 125 for

beach holidays and OMR 150 for winter sports holidays. Both airline and hotel charges must be paid in the month in which the holiday was originally due and taken. 4. If a holiday is cancelled by the time that payment is due to the airline and hotels, they accept 60% of these amounts in respect of the cancelled places. Airline and hotel charges for later cancellations have to be made in full. It is not MTs practice to make any refunds to its clients, irrespective of the date of cancellation. The company tends to know from experience what percentage of holidays booked is likely to be cancelled. 5. At 31 December 2011, the company has received 660 bookings for winter sports holidays.

6. Table 1 shows the estimated bookings and cancellations for the year 2012. Table 1: Number of holidays booked, taken and cancelled # of Holiday booked Winter Pre-Jan Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec 70 110 360 400 660 700 740 120 40 150 980 860 660 450 100 80 80 50 540 520 790 230 200 370 890 1,070 600 40 50 70 20 20 30 80 90 60 Beach # of Holiday taken Winter Beach # of Holiday cancelled Winter Beach

The Holidays cancelled columns of Table 1 show the month for which the cancelled holiday was intended to be taken at the time of booking. Past experience suggests that, of the holidays that are cancelled, 50% will be cancelled before payment is due to the airlines and hotels, and 50% will be cancelled later than this. 7. MTs outline balance sheet as at 31 December 2011 is expected to look as follows: Table 2: Out-line Statement of Financial Position of Majan Travel LLC as on 31st Dec 2011

OMR Non-current assets: Land and buildings Equipment and furniture Current assets Prepaid rates Cash Total assets 500 -21,200 330,300 57,000

OMR

387,300

-20,700 366,600

Equity (Share capital and reserves) Current liabilities Accrued electricity Un-realised Profit [660 winter sports x (30010%)] Long term Liabilities Loan @12% interest Total equity and liabilities 1,500 178,200

79,300

179,700

107,600 366,600

8. Salaries at MT will be OMR 20,600 for each month of the ensuing year. These will be paid during the month in which they are incurred.

9. Electricity is expected to be the same as this year at about OMR 1,500 each quarter, payable on 1 January, 1 April, and so on.

10. The business rate is also expected to be the same as this year at OMR 2,000 in total, payable in two equal installments on 1 April and 1 October.

11. Repairs are expected to cost about OMR 100 each month, payable in the month concerned.

12. Depreciation is to be charged at the rate of 20% on the book value of the equipment and furniture. No depreciation is to be charged on the building.

13. Staff will incur costs for travelling on behalf of the company. These are expected to be at the rate of OMR 3,500 each month during the months when holidays are being taken by clients. During each of the other three months, the figure will be OMR 500.

14. Interest on loan paid half yearly on 30th June and 31st Dec.

15. The company has always adopted the policy of realizing the profit on a particular holiday in the month in which it is due and taken.

Required:

I.

Prepare a month-by-month cash budget and a budgeted income statement, both for the next year, i.e. year ending 31 December 2012, and a budgeted balance sheet as at the end of next year, i.e. 31 December 2012. weighting) (10%

II.

Evaluative report on the companys plans based on the budgets that you have prepared covering the following areas: (75% weighting)

a. Problems faced by the company and your suggestions to overcome the problems associated with Cash flow management. b. Problems associated with Profitability and your suggestions to improve the same. c. As at present the company is not facing any problem related to debtors and creditors management as all transactions are in the form of cash. If necessary arises to introduce credit facility in solving problems discussed in a and b, discuss ways and means to be adopted in managing working capital. III. Evaluative comments on the policy of waiting until holidays have been taken, or were due to be taken, before realising the profit on them. (15% weighting)

Grading criteria Small Business Finance Sept 2011 Jan 2012 Individual written report + Group Discussion Assessment 1

The paper will be graded taking into account the following points.

To achieve higher Grades students have to show evidence of understanding of the case; relevant reading; illustrations and appropriate examples; construction of logical analysis and arguments; and drawing up an appropriate conclusion

The report should cover the following points: y y y y y Evidence of understanding the case Evidence of wider reading Critical thinking and analysis Creative solutions Clarity of expression

Marking criteria: Written report: Coverage of relevant information (20%) Evidence of wider reading (20%) Critical evaluation and analysis (40%) Clarity of explanation (20%) Group Discussion: Clarity and confidence (25%) Coverage of key issues (25%) Presentation of relevant solutions (25%) Addressing the issues raised by the tutor and peers (25%)