Accounting and Finance Assignment: EnerGenz Financial Statements, Tasties vs FastEat Ratios and NPV Investment Appraisal (European Business University), Singapore

This Accounting and Finance assignment moves from bookkeeping to analysis. You record a month of transactions for EnerGenz and prepare its statements, compare two fast-food chains with ratios, and appraise two overseas plant options with NPV, discounted payback and ARR.

Case Study 1: EnerGenz

EnerGenz, an oil, gas and renewable energy company, plans to list on the New York Stock Exchange and needs its December statements. December transactions:

• Borrowed $150,000 as a bank loan at the start of December.
• Bought raw materials on credit for $150,000.
• A former customer paid $25,000 into EnerGenz’s bank account.
• Bought drilling equipment for $35,000 in cash.
• Converted $250,000 of raw materials into finished goods, paying $30,000 direct labour.
• Sold finished goods costing $70,000 for $100,000: 60% cash, the rest on credit.
• Repaid $20,000 to creditors.
• Paid salaries of $25,000 and utilities of $10,000 in cash.
• Bought machinery worth $18,000: 50% cash, the rest on credit.
• Sold finished goods costing $65,000 for $97,000 in cash.
• Sold drilling equipment with a net book value of $5,000 for $6,500 on credit.

Adjustments: annual depreciation is 15% for drilling equipment and 20% for machinery (charge December only); insurance of $15,000 bought in October was paid in December and covers 12 months from October; debtors owing $12,000 have gone out of business.

1. Record the transactions using the accounting equation. [20]
2. Prepare an income statement. [8]
3. Prepare a balance sheet. [7]
4. Analyse the statements and comment on EnerGenz’s financial status.

Case Study 2: Tasties vs FastEat

Using the 20×1 income statements and balance sheets given for Tasties and its rival FastEat (sales $2,500k vs $2,000k; profit after tax $350k vs $300k), calculate and compare the current ratio, quick ratio, gross profit margin, net profit margin, return on assets, earnings per share, dividend coverage, inventory turnover, gearing and total asset turnover, and comment on both firms’ financial status. [20]

Case Study 3: India or Vietnam Plant

As CFO of an automobile parts maker with a 12% cost of capital, compare a plant in India (initial investment $600k, fixed costs $150k, variable costs 43% of revenue) and Vietnam ($500k, fixed costs $120k, variable costs 44%), using the six-year revenue forecasts given.

1. Perform an NPV analysis for both locations and recommend the more profitable site. [20]
2. Calculate the discounted payback period (using PV of cash flows) and ARR for each location, combine all results and recommend the best location with justification. [20]