MOD003319 Business Finance


• This assignment must be completed individually. 

• You must use the Harvard referencing system. 

• Your work must indicate the number of words you have used. Written assignments must not exceed the specified maximum number of words. When a written assignment is marked, the excessive use of words beyond the word limit is reflected in the academic judgement of the piece of work which results in a lower mark being awarded for the piece of work (regulation 6.74). 

• Assignment submissions are to be made anonymously. Do not write your name anywhere on your work. 

• Write your student ID number at the top of every page. 

• Where the assignment comprises more than one task, all tasks must be submitted in a single document. 

• You must number all pages. 


In order to achieve full marks, you must submit your work before the deadline. Work that is submitted late – up to five working days after the published submission deadline - will be accepted and marked. However, the element of the module’s assessment to which the work contributes will be capped with a maximum mark of 40%. Work cannot be submitted if the period of 5 working days after the deadline has passed (unless there is an approved extension). Failure to submit within the relevant period will mean that you have failed the assessment. Requests for short-term extensions will only be considered in the case of illness or other cause considered valid by the Director of Studies Team. Please contact A request must normally be received and agreed by the Director of Studies Team in writing at least 24 hours prior to the deadline. See rules 6.64- 6.73: Mitigation: The deadline for submission of mitigation in relation to this assignment is no later than five working days after the submission date of this work. Please contact the Director of Studies Team - See rules 6.112 – 6.141:

TASK 1.1 Kashi is preparing the cash budget for the first 3 months of her business’s trading. Business is called Kashi textiles and Kashi will be investing £25,000 of her personal savings to get it started. Rest of the information is as follows: 

  1. In January 2022, Kashi will purchase a computer and a printer for use in the business for £1,980, payable upfront. 
  2. Kashi expects to sell the following textiles: January £4,500 to Moon Traders February £6,890 to Hans Traders March £5,670 to Down Town shops. 
  3. Kashi expects to make the following purchases of textiles over the next three months: January £3,280 for Moon Traders supplies February £5,120 for Hans Traders supplies March £4,100 for Down Town shops’ supplies 
  4. All sales will be made for cash. 
  5. Purchases: 10% payment in the same month, 50% payment next month and remaining payment in 2 months’ time. 
  6. Kashi will need to hire a printing machine to print her logos and the hiring charges will be £250 per month, payable in the same month. Hiring will be made in January and will be needed for all the subsequent trading months. 
  7. Kashi has agreed to pay £250 per month to an accountant for his advice and preparation of accounts.
  8. Other expenses have been estimated as follows: £100 on delivery costs per month, payable at the end of each month. £425 on telephone costs per quarter, payable at the end of the quarter. £250 on other expenses, such as electricity and insurance, payable at the end of each month. 
  9. Kashi will be withdrawing £700 per month to cover her personal expenses. 

Prepare the cash budget for Kashi textiles for first 3 months’ of trading from January to March, 2022.Show your workings separately. (25 Marks)

TASK 2 (75 Marks) 

A. Define a Company. Explain its features and also explain advantages and disadvantages of forming a public company. (25 Marks) 

B. Discuss the crucial importance of cash to a business. Is the profit that a business makes a reliable indicator of its cash balances? (15 Marks) 

C. What is the reason for the existence of Corporate Governance? Discuss some principles of good governance as described by the Corporate Governance Code. (20 Marks) 

D. Define Gearing and explain its advantages and disadvantages. Why might a bank be interested in a company’s level of gearing? (15 Marks)