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PBL SAMPLE SET

PBL SAMPLE SET. Prepared by: Ms.NARIMAH HASHIM. PBL SAMPLE SET.

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PBL SAMPLE SET

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  1. PBL SAMPLE SET Prepared by: Ms.NARIMAH HASHIM NH PBL SAMPLE SET

  2. PBL SAMPLE SET • Sheema, a graduate with a Bachelor degree from a local university was adamant that she would not have to work under somebody. Immediately upon graduation, she embarked on a project of providing stalks of flowers for sale at graduation ceremonies taking place in local universities and other private institutions of higher learning, in and around the Klang Valley NH PBL SAMPLE SET

  3. PBL SAMPLE SET • At the beginning, she operates from her house and alone. After a few successful endeavors, she undertook in addition to corsages and stalks of cut flowers, to provide for bouquets and baskets of flowers for sales at these ceremonies. After two years of being independent she was quite satisfied with her achievements. NH PBL SAMPLE SET

  4. PBL SAMPLE SET • However, at a recent New Year dinner among old friends, she overheard one of her classmate bragging about his job in one big and prestigious sounding company, his four figure salary plus commissions that enabled him to buy designer’s clothes, to stay in a condo and to drive a nice and powerful looking car. NH PBL SAMPLE SET

  5. PBL SAMPLE SET • Looking at the income statement for 2008, and at two balance sheets in her hands, Sheema wondered if after two years, having a premise, two transportation vans (though second hand); a computer to help in clerical and administrative work, and five fulltime hard working staff to assist her is not good enough? NH PBL SAMPLE SET

  6. THE LEARNING ISSUES • Was adamant that she would not have to work under somebody! • After a few successful endeavors? • After two years of being independent, she was quite satisfied with her achievements • Wondered if ….. is not good enough? NH PBL SAMPLE SET

  7. ISSUES FOR DISCUSSIONS TO DETERMINE KNOWLEDGE CONTENT • Was adamant that she would not have to work under somebody! • Are we looking into career opportunities? YES/NO • Should we focus on working for somebody or being self employed? • If self-employed - What type of business? NH PBL SAMPLE SET

  8. ISSUES FOR GROUP DISCUSSION • Are we referring to classifications of business industries or are we referring to forms of business structures? • Classifications of business industries? • Forms of business structures? • How do we determine which ‘type of business’ we need to know? NH PBL SAMPLE SET

  9. SEARCH FOR KNOWLEDGE 2. After a few successful endeavors? • How do we measure successful endeavors? • Are we referring to personal success or are we referring to business entity’s success? • What are the criteria for success? NH PBL SAMPLE SET

  10. SEARCH FOR KNOWLEDGE • Are the criteria for business success different from personal success? • Are the criteria for success the same as the measure for success - personal & business? NH PBL SAMPLE SET

  11. ISSUES FOR GROUP DISCUSSION • After two years of being independent, she was quite satisfied with her achievements • Her achievements as a person, OR • Her achievements in a business undertakings? • Is success = achievements? NH PBL SAMPLE SET

  12. ISSUES FOR GROUP DISCUSSION • Wondered if it is not good enough? • Her personal success? OR • Her business success? • Not good enough for whom? • For her or her business? NH PBL SAMPLE SET

  13. GROUP’S CONCLUSION • What is ACT 2131: Cost & Management Accounting all about? • Financial accounting versus Management accounting • How does accounting relate to the types & structure of business • How do accounting measure successful business endeavors? • Does accounting measure personal success? NH PBL SAMPLE SET

  14. YOUR PBL PRESENTATION SHOULD COVER • The list of LEARNING ISSUES • Must be extracted directly from the PBL set NH PBL SAMPLE SET

  15. 2. KNOWLEDGE CONTENT • Area of study in accounting – Financial accounting versus management accounting • Classification or types of business activities-servicing, merchandising & manufacturing & any similarities & differences in their financial reporting NH PBL SAMPLE SET

  16. KNOWLEDGE CONTENT • Legal structure of business - sole-proprietorship, partnership & company, their characteristics, weaknesses and strengths & similarities & differences in their financial reporting NH PBL SAMPLE SET

  17. KNOWLEDGE CONTENT • Financial statements – types, purposes & elements (Assets, liabilities, Owners’ Equity, Revenue & Expenses) reported in financial statements • Interpretation of Financial Statements – horizontal & vertical analysis, specifically ratio analysis NH PBL SAMPLE SET

  18. IDENTIFICATION OF THE PROBLEM • How do you measure the success of a business enterprise? NH PBL SAMPLE SET

  19. 3. ANALYSIS OF THE PROBLEM • THE MEASURE OF SUCCESS FOR A BUSINESS? • With reference to the Financial statements of a business: • Balance sheet – shows financial position • Income/ P&L statement – measures business performance • Cash Flow statement – shows liquidity • Compare with industry averages / targets set/past records NH PBL SAMPLE SET

  20. ANALYSIS OF PROBLEM • Do financial statement analysis – • Horizontal analysis – trend – not possible data insufficient • Vertical analysis – do ratio analysis, specifically liquidity ratio, operational ratios, solvency ratios &profitability ratios NH PBL SAMPLE SET

  21. RATIO ANALYSIS-LIQUIDITY RATIOS • Current ratio = Current assets/current liabilities 20072008 RM120,000/60,000 RM165,000/50,000 = 2.0 = 3.3 NH PBL SAMPLE SET

  22. LIQUIDITY RATIOS • Acid test ratio: • Current assets – (inventory + prepayments) / Current liabilities 2007 RM(120,000-35,000)/60,000 = 1.5 2008 RM(165,000-60,000)/50,000 = 2.1 NH PBL SAMPLE SET

  23. PROFITABILITY RATIOS • Return on investment = Net Profit/ Total Owner’s Equity 2008 = RM (25,000/55,000) x 100% = 45.6% NH PBL SAMPLE SET

  24. PROFITABILITY RATIOS Return on investment = Net profit/Total investments 2007: = RM(15,000/320,000) x 100% = 4.69% 2008 = RM(25,000/345,000) x 100% = 7.25% NH PBL SAMPLE SET

  25. OPERATIONAL RATIOS • Receivables turnover ratio: Credit sales /average inventory = RM 400,000/(65,000+60,000)/2 = RM 400,000/RM62,500 = 6.4 times • Average collection period: 365 DAYS/Receivables turnover ratio = 365/6.4 = 57 days NH PBL SAMPLE SET

  26. OPERATIONAL RATIOS • Inventory turnover ratio: Cost of goods sold/ average inventory = RM (198,000/ (60,000+50,000/2) = RM 198,000/55,000 = 3.6 times NH PBL SAMPLE SET

  27. Operational ratios • Average payment period: = 365 days/Inventory turnover ratio = 365/3.6 = 101 days NH PBL SAMPLE SET

  28. SOLVENCY RATIOS • DEBT/EQUITY RATIO = Total liabilities/ Total Investments 2007 = RM (280,000/320,000) x 100% =87.5% 2008 = RM(290,000/345,000) x 100% =84% NH PBL SAMPLE SET

  29. SOLVENCY RATIOS • Debt/Equity ratio: Long-term liabilities/Total Investment 2007 = RM (220,000/320,000) x 100% = 68.75% 2008 = RM (240,000/320,000) x 100% = 75% NH PBL SAMPLE SET

  30. CONCLUSION • Personal success versus business success • Based on the following factors; • Need for independence • Positive trend – one year in business • Supported by satisfactory ratios • Sheema is doing alright, more than alright – business and personally! NH PBL SAMPLE SET

  31. TILL NEXT TIME • THANK YOU FOR COMING & FOR YOUR COOPERATION NH PBL SAMPLE SET

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