BBF201/03 Introduction to Financial Management Assignment 1

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May 2022 Semester

ASSIGNMENT 1 (25%)

BBF201/03 INTRODUCTION TO FINANCIAL MANAGEMENT

Instructions:

1. Assignment 1 contains ONE (1) section and you are required to answer ALL

questions in each section.

2. The assignment should be typed using ARIAL, font size 12 and 1.5 spacing.

3. The deadline for the submission of Assignment 1 is 11 Jun 2022 11:59:00

PM. A softcopy should be submitted via Online Assignment Submission

System.

4. Students are highly encouraged to passage their Assignment to the Turnitin

system before submission, to encourage honest academic writing and it is not

mandatory except for Project courses.

5. Students will be required to use the “TMA Declaration form” (T-DF) as the cover

page of TMAs submission.

BBF201/03 Introduction to Financial Management Assignment 1

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Part A (100 Marks)

Answer ALL questions in answer book.

QUESTION 1 (50 MARKS)

7-Eleven Malaysia Holding Berhad's annual report for the fiscal year ending 2021 is

available at https://www.7eleven.com.my/financial-reports. (At least two years of

comparable financial statements are required.)

a) Assess 7-Eleven’s financial position for year 2020 and 2021 according to

i) liquidity position, and how the liquidity position has changed over time from

2020 to 2021.

(6 marks)

ii) asset management position, and how its asset management efficiency has

changed over time.

(6 marks)

iii) debt management position, and how its debt management has changed

over time.

(6 marks)

iv) profitability ratios, and how its profitability position has changed over time.

(6 marks)

v) market value ratios, and how its valuation has changed over time.

(6 marks)

BBF201/03 Introduction to Financial Management Assignment 1

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b) Calculate 7-Eleven’s ROE as well as the industry average ROE, using the

DuPont equation. From this analysis, how does 7-Eleven’s financial position.

(10 marks)

c) Write your opinion on what you think would happen to its ratios if the company

initiated cost-cutting measures that allowed it to hold lower levels of inventory

and substantially decreased the cost of goods sold. No calculations are

necessary. Think about which ratios would be affected by changes in these two

accounts.

(10 marks)

QUESTION 2 (25 MARKS)

Explain whether the following instruments are examples of money market or capital

market securities.

a) Malaysian Treasury Bills (MTB)

b) Safura Berhad corporate bonds

c) AM Fujiya Berhad Common stocks

d) AEON CO (M) Berhad Preferred stocks

e) Bank Negara Monetary Notes-i

(25 marks)

BBF201/03 Introduction to Financial Management Assignment 1

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QUESTION 3 (25 MARKS)

a) Elaborate the importance of financial management to all managers.

(5 marks)

b) Explain three (3) advantages of the organisational forms a company might have

as it evolves from a start-up to a major corporation.

(6 marks)

c) Justify your position on what managers' primary goal should be.

(Hint: your response should centre on these three dimensions.)

a. Do businesses have any societal responsibilities?

b. Is stock price maximisation beneficial or detrimental to society?

c. Should businesses act ethically?

(11 marks)

d) Elaborate the three aspects of cash flows affect the value of any investment.

(3 marks)

END OF ASSIGNMENT 1