General information and requirements

This is an individual assignment due for submission on Thursday 16^th April at 11.59pm, 2020.

Assignment Length

Each question provides a guide as to the approximate word length of each answer. It is recommended you are close to these limits, but you do not need to achieve them exactly.

Please ensure your overall assignment is +/- 10% of the total word limit. Assignments that vary significantly from these guidelines will be marked down.

Submission

All submissions must be typed in a minimum 11 font, with 1.5 line spacing using word and submitted via the submission link on Moodle as a pdf file. Please refer to the online marking rubric for marking guidance.

Referencing

All submissions will be reviewed by a program called “Turnitin” and this will identify instances of plagiarism (copying). This is a very serious offence and can result in you receiving no marks for the assessment task. Refer to the subject learning guide for additional details regarding plagiarism.

Please ensure if you have copied information you use quotation marks and appropriate referencing.

If you reword someone else’s work you still need to refer to the author(s) in your sentence. For example, Ashman (2020) discusses how……. – whilst this is not a quote you need to reference the idea. The library provides specific guidance for referencing.

This assignment requires you to analyse real events. If you copy financial reports from the internet it will be obvious and no marks will be awarded, even if correctly referenced. The purpose of the assignment is to develop your analytical skills which are not those of an investment advisor. A small amount of referenced information will be acceptable, the focus is to be on your interpretation.

Assignment Presentation

Refer to the “Assignment Part 1 Presentation Guide” available under the “Assignment Parts 1 and 2” tab.

Graduate Capabilities

This subject assesses the following graduate capabilities:

Writing                                                 3 marks

Critical thinking                                 4 marks Creative Problem-solving             4 marks Ethical behaviour                             4 marks

Late Assignment Penalty

“The standard penalty for late submission of assessment tasks is 5% of the marks for that task for each delay in submission of a day or partial day up to a maximum of five (5) working days after the due date.”

Presentation

Assignments must be presented in accordance with the “Assignment Part 1 Presentation Guide” available under the “Assignment Parts 1 and 2” tab.                                                                                                 (3 marks)

Question 1                                                                                                                                                               (6 marks)

Extract from The Age, Sunday 8^th March, 2020.

“Washington: A US congressional committee investigating Boeing said a “culture of concealment” at the company and poor oversight by federal regulators contributed to two deadly crashes involving grounded 737 Max.” (Full article below)

Required: 

1. Review the above statement and discuss the importance of strong corporate governance and ethical decision making to try and prevent such
   • Ensure you include a short discussion of corporate governance (125 words) and
   • A short discussion of ethical considerations in respect to the APES 110 code of professional conduct (125 words). (3 marks)
2. Discuss whether Boeing’s corporate governance and ethical considerations have been applied in accordance with expectations from regulators and society. Include a reflection in relation to these points as to what you think occurred to cause Boeing to make the decisions they made (150 words).
3. Include 1 past example illustrating the results of poor corporate governance and ethical decision making (not Boeing) to illustrate your discussion (100 words). (Parts b & c = 3 marks)

Question 2                                                                                                                                                          (3 marks)

1. Explain the purpose and use of the Statement of profit or loss, Statement of changes in equity, Statement of financial position (also known as the Balance Sheet) and of the Statement of cash flows. Explain why the Statement of cash flows differs from the Statement of profit or loss. (125 words).
2. Briefly describe the 3 main business structures; sole trader, partnership and company, how they finance the business and 1 advantage and 1 disadvantage of each structure (do not repeat these advantages or disadvantages) (125 words).                                                                           

Question 3                                                                                                                                                          (3 marks)

Extract from CRN “Total loss”: Dick Smith shareholder’s cautionary tale, by Rodney van Royden,

March 28, 2017

“[Dick Smith Holdings] would need to see a substantial reduction in EBITDA from even our guidance before we even get close to our number with the banks. So no concern from my end.’ - Dick Smith leadership team

- 28 October 2015 Conference Call Recording – Trading Update

Approximately two months later, Dick Smith Holdings was placed into voluntary administration and receivership having covertly well exceeded ‘their number with the banks’. The oldest and longest serving Australian electronics retailer – DSH – was in fear of being unable to repay their debt.

DSH appointed McGrath Nichol as administrators (to run the business whilst it was in the legal status of administration). The secured creditors (DSH lead bankers NAB and HSBC) also concurrently appointed Ferrier Hodgson as receivers. A basic difference between the two is that administrators primarily act for all creditors whilst receivers primarily act for the interests of the secured creditors.

McGrath Nicol later uncovered that Dick Smith Holdings had racked up a debt of nearly $400 million by the time of the demise.

After more than 45 offers were received to buy the business, none were deemed acceptable by Ferrier Hodgson, and the business was liquidated with hundreds of millions still owed to creditors.”

Required:

Using the Dick Smith Holdings (DSH) extract above review the 2015 DSH Annual report https://www.asx.com.au/asxpdf/20150818/pdf/430kvhrl8cpg0l.pdf and explain the key points that caused the business to collapse and where the senior management team should have identified there were serious problems with its operations. Hint: focus on inventory, supplies, borrowings and cash flows and use the Annual report figures to support your discussion (200 words).