BUSN6770 Financial management for decision-making and control


Preparation time:

Students should individually work on their project report. The project text comprises two tasks with related sub-questions  and  both tasks  require an answer.  Students should devote  a minimum of 20 hours to this assignment. This project  is open  booked.  Students can use a calculator or an excel spreadsheet for doing the calculations.

Words limits:

The word limits for this assignment are 2,000 (minimum) and 3,000 (maximum). The word count includes everything in the body of the text such as comments, quotations, citations, footnotes and subheadings. It does not include title, table of content,  bibliography, financial statement tables with numbers and appendices, as they do not form part of the text. There is a +/-10% deviation tolerance in the total words count. Examiners will mark only up to that limit.


     The report shall be written in word, converted in a pdf file, and submitted in Moodle.

     The pdf file to be submitted should be called: module code_login_surname_seminar group day and time (i.e., BUSN6770_aa323_Smith_Tuesday10).

     The pdf file must be set up so that it can be printed on A4 paper.

     The student’s name, login, seminar group day and time, should appear on each page as part of the header.

    All  pages of the report are to be numbered.

     The report should be written in Arial 12. Financial statements tables with numbers can be made in Excel and they should be written in a font not smaller than Arial 12. If the font used in the tables is smaller, markers will only mark what they can read.

     The total word count must be declared at the end of the report.

It is the  student’s responsibility to make regular backups of the  work so that,  in case of IT problems, he/she will be able to complete and submit summative assignment by the deadline. Students should also keep a hard copy of their work in case that the file cannot be opened or becomes corrupted before or after submission.

Assignment Text

There are two tasks in this coursework assignment. The assessment  has quantitative and qualitative content.  As a guide, students  should expect task one to take maximum four A4 pages and task two to take maximum six A4 pages.

CASE STUDY: White & Brown ice cream parlour

Luca White and Susan Brown are two graduates in Biochemistry at University of Kent. They have decided to open a new ice cream parlour specialized in selling a variety of high-quality chocolate flavoured ice-creams. They are planning to rent a small shop near Westbrook Bay in Margate, Kent. A friend has recommended  to Luca and Susan to prepare a business plan for their new business. The two graduates have limited business knowledge, so they have contacted you for help with estimating the profitability, liquidity, and sustainability of the business in the first year.

Their business will start on the 1st of January 2023. On that day, Luca and Susan will deposit savings for £8,000 in the company bank account as initial capital.

The business will be located at the ground floor of a two-storey building. The premises they plan to rent includes the shop, a fully equipped kitchen, and a small office room. Luca and Susan plan to receive the ingredients and produce the ice cream in the kitchen in the morning, and to open the shop to the public for take away in the afternoon.

Luca and Susan plan to hire a part-time employee to help them selling the ice creams in the afternoon  to have always two people selling in the shop at any time. They have done some market research and they assume that with two sellers in the shop they will be able to sell in total a maximum of 150 ice cream tubs/ cones per working day. However, given the current economic situation, they prudently estimate to sell on average:

         50% of that amount per working day from January until March,

         76% of that amount per working day from April until September,

         50% of that amount per working day from October until December.

They expect the shop to be open in the afternoon six days per week, from Tuesday to Sunday during the year (use the calendar to estimate the number of working days per month).

Luca and Susan do not plan to hold any inventory of ice-cream. They will produce the ice cream based on the daily expected  demand.  Hence, they assume that  monthly all the ice cream they will produce will be sold.

The selling price per average size ice cream tub/cone is estimated at £3.50 for the first three months of the year, rising to £4 thereafter.

It is envisaged that  customers  will pay 5% of sales by credit card (these  receipts will be received the following month); 70% of sales immediately by debit card, and the remaining 25% of sales by cash.

Luca will receive the ingredients and prepare the ice cream in the morning, while Susan will deal  with  the  administration,  including  purchasing  the  ingredients.  Susan  expects  the purchase cost of all ingredients to be 6% of revenue in the first three months, decreasing to 4% of revenue thereafter. In January Susan plans to buy additional ingredients to create an opening inventory equal to 3% of revenue  of that  month.  She plans to keep the  level of inventory of ingredients constant during the year. The purchase cost of the ingredients will be paid in the month after one in which it will be purchased.

Luca and Susan also plan to incur the following costs for the business:

    The rent of the premises with all the facilities installed and the local property tax charges are expected to be £21,000 and £8,000 per year respectively, both of which are payable at the beginning of each quarter.

    In January Luca and Susan also plan to buy a computer for the office for £2,000. They estimate the computer will have five years useful life and depreciate accordingly (straight line method). They will pay 50% of the computer purchase cost immediately and pay the remaining 50% in February.

    Luca and Susan salary will be £22,000 each per year. The part-time sales assistant will be paid £11,000 per year. Social security costs will add 10% to all salaries cost. All labour costs will be paid in the fourth week of each month.

    Utilities costs (water, gas, electricity, and telephone bills) are assumed to remain constant, and they are expected to be £4,000 per quarter, payable by direct debit in the first week of the following quarter.

    Luca and Susan will rely on the service of an accountant friend for keeping the business accounts. The accountant will be paid £100 per month at the end of every month.

    To bring the business to the attention of the public Luca and Susan plan to spend £3,000 on advertising, including printing out leaflets, in the first month of trade. This payment in January will cover the first three months’ worth of promotion. Luca and Susan then plan to spend £900 per trimester thereafter, payable at the start of each trimester.

At the beginning of the  second year of trading, Luca and Susan anticipate expanding the business by renting out also the first floor of the building to add indoor seating. They estimate the additional cost to be equal to £12,000 per year (plus additional local property tax £4,000 per year) that they would pay in the same way as the ground floor rent.


Task 1: Company business plan.

(1.a)        Prepare a budgeted income statement using the contribution margin format for White & Brown for the year ending 31st December 2023.

(1.b)       Prepare a monthly cash budget for White & Brown for the first six months of operation and  a quarterly cash budget  for the  other  6 months  up  to  31st December 2023. Also indicate the total for the year column.

(1.c)        Prepare a budgeted balance sheet using the net assets equal equity format for White & Brown on 31st December 2023.

(1.d)        Do a  cost-volume profit analysis: calculate the  break-even  point in  sales revenues (£) and the margin of safety in sales revenues (£) for the business. Briefly comment on your results explaining to Luca and Susan the meaning of these two concepts.

Maximum 200 words. Task 1: Total 40 marks.

Task 2: Business report about the company business plan.

Your report addressed to Luca and Susan should include the following:




Critical analysis of the business plan assumptions. Use your results of task 1 to evaluate critically the assumptions made by Luca and Susan in the business plan. You need  to  include evidence of competition analysis, demographic analysis, and characteristics of the location to evaluate the owners’ assumptions (you need to do a data search for this type of information).

Analysis of the  impact of the  business  plan on the  company profitability, liquidity,  and  sustainability.  Use your results of task  1 to  answer  these questions: does  the  company generate  contribution margin and profit? In terms of liquidity, how the net cash flow and the closing balance are evolving during the  year and how much cash is necessary to fund the  first year of business? Can the company survive in the short-term?  Can it be solvent and grow in the long-term? Discuss pros and cons of multiple sources of finance that Luca and Susan could use to obtain the necessary funds.

Your recommendations and  advice to  Luca and  Susan for establishing  a successful business. Provide them with your own advice. Consider strategic, marketing and financial aspects. Will Luca and Susan be able to expand the business and rent the first floor in January 2024?

Maximum 2,800 words. Task 2: Total 60 marks. Overall Assignment: Word count: maximum 3,000 words. Total marks: 100.

Assignment Marking Criteria (Task 2)


Avoiding plagiarism

What  is plagiarism?

Plagiarism is a form of academic misconduct. Plagiarism may  be  committed in a number of ways, including:

     Copying another person's work or ideas. This includes copying from other students and from published or unpublished material such as books, internet  sources, paper mills,  computer code,  designs or similar

          Submitting previously submitted or assessed work of your own without attribution

          Submitting work solicited from (or written by) others

          Failing to adequately reference your sources

Plagiarism and duplication of material, as defined below, are cited in the regulations as examples of breaches of General Regulation V.3:

     Plagiarism:  Reproducing  in  any  work  submitted  for  assessment  or  review  (for  example, examination answers, essays, project reports, dissertations or theses) any material derived from work authored by another without clearly acknowledging the source

     Duplication  of  material:  Reproducing  in  any  submitted  work  any  substantial  amount of material used by  that  student in other  work  for assessment, either at  this University or elsewhere, without acknowledging that such work has been so submitted

What  are  the  penalties for plagiarism and duplication of material?

The  penalties  can   be  severe. They  include  marks  of  zero   for  individual  coursework  and   de- registration from university for serious or repeat offences. Additionally, offences may be noted in your student record.

For more  information on plagiarism (and  referencing)  please see the  KBS Student Handbook and the universities policy on academic discipline (Annex 10 of the Credit Framework) which can be found at:


Therefore it is  vital  that you  ensure all  assignments  are  your own  work  and follow  good academic practice, including the  correct academic referencing.

Advice  on  avoiding  plagiarism  and  the  University’s  guide  to  academic  integrity,  plagiarism  and

Turnitin, the plagiarism detection software used by the University, can be found at:



Illness or other mitigating circumstances

All  students have   a  responsibility  to  manage their  learning,  revision  and  assessment  activities throughout the duration of each term. Unfortunately illnesses and difficult and distressing events are a normal part of life and  students are  expected to manage these and  continue with their work and study.

However,  there  may be times when  illness or other  misfortune cause exceptional interference with academic  performance  over  and   above  the  normal  difficulties  experienced  in  life.  If  you  are experiencing personal factors which are  impacting on your academic studies – please refer to the

KBS   Student  Support    Moodle  site  for   comprehensive  information  relating   to   the   school’s concessionary procedures.