Hello, if you have any need, please feel free to consult us, this is my wechat: wx91due
BUSM107 Digital Marketing Financial Analysis and Management Accounting 2024-25
Assessment Instructions
SEQ001 B24- CWK 100% Decision Making Case (2500 words)
Assessment Instructions:
You are required to type your answer and follow all the instructions in this coursework assessment document. For this assessment you are required to show appropriate calculations and workings in an appendix. You are advised to undertake appropriate calculations and workings in a spreadsheet and ‘cut and paste’ the relevant spreadsheet extracts into the appendix. You should use font size 12 in your spreadsheet. For any discounting calculations you undertake, use the discount factors included at the end of this coursework brief. Show your answers to zero decimal places. Show your calculations for NPV in £.
Word count
The maximum word count of 2,500 words must be followed. You are required to record the number of words on the front cover sheet. Footnotes, appendices, tables, figures, diagrams, charts are excluded from the word count. Appendices should not contain any narrative. Appendices should contain only financial calculations. Title page, table of contents, and any references are excluded from the word limit. A penalty will be applied for exceeding the permitted 2,500-word count. Please note the penalties for not adhering to the word count in the module handbook filed under essential information on QM plus. Your report should be double spaced. You should adopt a formal writing style, use short sentences and the third person. You will get many more marks for showing you can answer the question asked and applying your knowledge to the specific scenario given in the case study.
References
You should draw upon a range of sources including, journal articles, other textbooks, industry reports etc. Where you draw upon sources you must cite them appropriately using the Harvard referencing system. If you use ChatGPT or other artificial intelligence (AI) tools you must include an entry in an appendix that lists the prompt, the tool you prompted, the output and how you used the output in your coursework. Be aware that a number of academic misconduct checks, including the use of Turnitin and a viva voce examination are available to the module leader. There are severe penalties for Academic Misconduct under the Queen Mary assessment regulations.
Submission date
The assignment MUST be submitted to the module submission box located within the Queen Mary plus LSR page by the specified deadline 3pm 4th August 2025.
You are required to upload your coursework as a single file via the submission link on the QM plus module page.
If you encounter difficulties submitting your assessment via QM plus then please immediately notify (via AskQM), explaining the problem and including a copy of the work you are trying to submit. ONLY use this approach if you can show that you have tried to upload your course work to QM plus and encountered technical difficulties.
Assessment
Within each section of this coursework you may be assessed on the following aspects, as applicable and appropriate to this assessment, and should thus consider these aspects when fulfilling the requirements of each section:
• The accuracy of any calculations;
• The strengths and quality of your overall analysis and evaluation;
• The appropriate use of relevant theoretical models, codes, concepts, accounting standards and frameworks;
• The rationale and evidence that you provide in support of your arguments;
• The credibility and viability of the evidenced conclusions/recommendations/plans of action you put forward;
• The structure and coherence of your considerations, report writing style and presentation;
• As and where required, relevant and appropriate references and acknowledgement of sources of all materials and AI tools used, any references should use the Harvard referencing system;
• Adherence to the coursework instructions and requirements;
• Academic and business communication of ideas, research evidence, knowledge, arguments and conclusions.
CASE STUDY
Introduction
You have recently graduated with a MSc in Management and have secured a new Management Associate role at Mile End plc, a haulage, transport and logistics company located in the Docklands East London. The company is involved in transporting and storing raw materials, finished goods, inventory, and other resources. Mile End plc transports goods by road using large vehicles such as lorries, trucks, and trailers to various destinations in the UK and Europe. The company must comply with various regulations, including health and safety standards, environmental regulations, and road transport laws. Non-compliance can result in fines, legal penalties, and reputational damage. It has a strong shareholder base, who have enjoyed the exceptional returns earned in the boom times. Going forward it seeks to expand its shareholder base with a listing on the London Stock Exchange and is now preparing for such a flotation. Kairan Chen, the Managing Director, a significant shareholder of Mile End plc is haunted by the questions posed at the company’s annual review meeting with Barleys commercial bank. “Do you
know which customers are profitable and which ones are not. Is your management system anchored firmly in a clear strategy?” The bank manager thought that the company’s growth during the boom times had less to do with strategic insight and more to do with pure luck. The bank is concerned about the financial performance of the haulage division in the latest financial year. The bank manager also indicated at the meeting that the bank’s own risk appetite was under review and was likely to change within the next six months. Mile End’s recent poor performance can be attributed to declining sales and cost pressures.
Transportation Industry
The transportation and logistics industry has been battling the operational and commercial fallout of multiple global crises, including the COVID-19 pandemic and geopolitical conflicts in Ukraine and the Middle East. The most recent announcements made by the UK Chancellor Rachel Reeves will raise the rate of national insurance paid by employers in 2025 by 1.2 percentage points. This means businesses will now pay a rate of 15%. In addition, the threshold at which
businesses are required to pay national insurance on workers earnings has dropped from £9,100 to £5,000. The Chancellor has also confirmed that the minimum wage for over 21s, known officially as the National Living Wage, will rise by 6.7%, from £11.44 to £12.21 per hour from April 2025. Global climate considerations also loom large for the haulage industry. Increasing environmental legislative requirements, natural events such as prolonged periods of rainfall, sudden floods and wildfires can all disrupt travel routes and itineraries and cause damage to goods and transport infrastructure. Mile End plc is committed to playing their part in reducing greenhouse gas emissions and will work on new initiatives to support the UK government plans
to achieve net zero by 2050. Sustainability is a strategic imperative for Mile End plc and a business priority.
Company Background
The success of Mile End plc was due to Kairan Chen’s business acumen, his ability to spot and realise an opportunity, the hard work of company employees and a degree of good fortune. Over 15 years, Mile End plc had grown from a one van haulage company into a transport and logistics company, employing 145 people with an annual turnover of £50m, building a reputation for providing progressive, top quality and reliable services. Recently, the board of Mile End plc is frustrated at the
inability of the Division’s Management Team to clearly explain the detailed operating factors that have contributed to its poor performance. The current financial position of the company is included in Appendix 1. A basic Management Information System (MIS) operates within the company, producing summary profit and loss and balance sheet information on a quarterly basis. The Divisional Managers feel this is no longer fit for purpose and have asked you for your suggestions as to how the cost performance information of the Haulage Division could be improved. The Managing Director knew that company margins had been tightening but he did not know what actions to take. He was convinced that the balanced scorecard could provide Mile End plc with insights for its future strategy and provide a more holistic basis for measuring company performance.
Haulage Business
The haulage business of Mile End plc started with one van. This has grown to 50, each with its own in-house driver. Mile Ends’s main depot, which is owned freehold, is located near a few multinational manufacturing sites in the London Docklands. It was one of the first companies to invest in refrigerated vans, to service an emerging frozen food sector when larger companies were hesitating. The business was historically profitable, but recently margins have deteriorated and in the latest financial year, the business broke even, despite a small increase in revenue. The Haulage Divisional Manager John Simpson is disappointed with this performance, feeling they have always “gone the extra mile” to service customers, a fact noted and appreciated by customers.
Warehousing Business
The warehousing business developed as a spin off from the haulage business. Mile End plc initially provided a simple warehousing service. The business grew into a separate revenue stream and began to offer additional value-added services such as inventory management, invoicing, order assembly and order tracking, services for which customers were prepared to pay a premium. The business has been very profitable and sales grew by 15% from the prior year. The Warehouse Manager has indicated that the IT equipment needs an immediate upgrade at a cost of £420,000.
The Warehouse Manager estimates that additional maintenance costs of £40,000 per annum would be incurred but that savings of £140,000 per annum would also accrue, both commencing next year. The upgrade will have a useful life of 5 years and capital allowances are available at a rate of 20% per annum straight line. Capital allowances are tax deductions that businesses can claim on eligible capital expenditures, such as equipment. All investments in Mile End plc must earn a return
after tax of 10% and the company has a corporation tax rate of 20%, paid one year in arrears. Assume that annual cash flows arise at the end of the relevant year and that there will be no changes over the project’s life.
Packaging Business
Mile End plc also became involved in co-packing products for existing clients involved in retail marketing initiatives such as “buy one, get one free” promotions and in repacking products that may have come in with the wrong bar codes or labels.
Both services operate from the warehousing facility, are labour intensive and delivered a small profit in the latest financial year on sales growth of 5%. The MD is aware of a recent surge in promotions at the retail multiples and believes that Mile
End is well placed to secure more of this business going forward.
Senior Management Meeting and Incentive Plan
At the senior management brainstorming meeting, Kairan Chen became annoyed by the latest “reactive moves” to address the margin pressures in the haulage business.
“We have become pre-occupied with short term cost over runs and revenue shortfalls and the creation of short-term action plans to cope with the problems. We need to become more strategic, to better understand our value offering, to take more sustainable actions.” John Simpson stated that “it was a business mistake to say yes to any customer that comes our way.” He suggested introducing a balanced scorecard and explained the benefits of a balanced scorecard approach for the divisional managers. He presented them with a template for completion for the year end 31 December. The balanced scorecard template completed by the Senior
Managers, with Sanjay Javid, the Operations Manager providing assistance, for the same period as the latest financial year, 31 December 2024, is reproduced in
Appendix II. Sanjay feels that the balanced scorecard is a fad and would rather just cut all costs in the haulage business by 15% across the board. The Director of
Resources Claire Roberts mentioned an article she read in the Financial Times about ‘how and when zero based budgeting boosts corporate productivity’ and has suggested moving from an incremental budgeting approach to a zero-based budgeting approach. Given the continued margin pressures, the Senior Management
Team intends to embark on a cost reduction programme, one provision of which seeks to terminate and re-hire all employees in the haulage division at reduced pay rates.
The MD’s goal is that the balanced scorecard will become the key tool used to incentivise and reward Mile End’s Senior Managers. The incentive plan will be based on achieving the targets outlined under the Customer Perspective, Innovation
Perspective and the Learning & Growth Perspective only. For each measure where a target is met (measured on an annual basis), the Manager will receive a bonus of 5% of salary, up to a maximum bonus of 50%. This bonus will be deferred for a period of 9 months. The MD is confident that this will encourage the Senior Managers to make decisions that will maximise the value of Mile End’s business in the long term.
Gravesend Transport Ltd Opportunity
The Chair of the company Kiara Patel has become aware that one of Mile Ends’s competitors, Gravesend Transport Ltd, is for sale and has notified Kairan Chen.
Gravesend provides haulage services to local and European customers, using the ferry services from the Southeast of England. The Chair believes that this would increase the scale of the haulage business and its geographical footprint outside of the London area. A price in the region of £20 million has been quoted by the
Gravesend executive. The business of Gravesend Transport Ltd is on a similar scale to the haulage business of Mile End plc. Haulage companies are currently trading on an EBIT multiple of 10. The Chair and the MD have discussed the possible acquisition and are anxious to consider the possibility of an acquisition as a means of growing the company, increasing market share and seeking a flotation on the London Stock Exchange within the next 3 years.
Requirement
Prepare a concise report (maximum word limit 2,500 words excluding appendix and references) for the Mile End plc Board of Directors.
(a)
(i) Comment critically on the Managing Director’s assertion that a balance scorecard would provide insights into the future strategy of Mile End plc.
(ii) Advise the Managing Director of three practical issues with implementing the balanced scorecard for evaluating the performance of the company and the senior management team.
(iii) Outline and explain five financial measures that you propose to include under the ‘Financial Perspective’ section of the balanced scorecard in Appendix II, justify the measures chosen. 15 marks
(b) Critically analyse and comment on the performance and position of Mile End plc and each respective business for the year ended 31 December 2024 from both a financial and non-financial perspective.
20 marks
(c) Recommend five key additions to the current cost information captured within the MIS and reported to the board in appendix 1 that would provide further clarity to the board on the cost performance of the Haulage Division. Briefly explain your choice and benefit of each addition.
5 marks
(d) From the information available, identify any potential ethical issue and recommend a course of action that could be taken to resolve the issue.
5 marks
(e) Critically comment on the proposed Senior Management Team incentive plan.
10 marks
(f) Determine whether Mile End plc should invest in the new warehousing business IT equipment from a financial perspective and identify four additional factors which Mile End plc should consider.
20 marks
g) Critically discuss the arguments supporting a move towards ‘zero based budgeting’ from the traditional incremental budgeting techniques currently used in Mile End plc. Support your arguments with suitable references from academic literature.
15 marks
(h) Advise the Chair and the Managing Director on the potential acquisition of Gravesend Transport Ltd to include:
(i) whether Mile End plc should proceed with an acquisition bid and
(ii) the financing options available to Mile End plc . 10 marks
Total 100 marks