案例资料(完整版).doc

Assessment task 3 Outcome(s) covered 3, 4 and 5 Assessment task instructions Read the case study and answer the questions that follow. Following the successful launch the cycling shorts, Elite plc has decided to embark on a major expansion and launch a complete range of cycle wear. This is due not only to the successful trial period but sales of running wear have fallen throughout the year. This is down to the popularity of cycling increasing with many runners changing their preferred sport. This expansion will double the number of products that the company produce and sell and will require major investment in buildings, plant and machinery, materials and workforce. The buildings will cost around ￡1,000,000 and have an expected life of 50 years; the plant and machinery will cost ￡100,000 and have an expected life of 10 years. In order to fund the expansion extra financing will be required by Elite plc, however the Finance Director is overseas on business and is unable to provide the Board with the financial information they require other than the profit and loss, balance sheet and cash flow statements for the years’ ended 31 July 2011 and 2012, which she has supplied to you (Appendix 1). At a recent Board meeting the situation was discussed in order to find suitable financing for this expansion, the Managing Director is keen to obtain the most suitable source of finance as he believes that it will have an impact on the accounts. The Sales Director suggested that they should consult shareholders on this matter because, other than the Board, they are the only other interested party and users of the accounts published by Elite plc. Due to the absence of the Finance Director the Board was unable to find out what sources of finance were currently being used by Elite plc. The Managing Director for the Board has asked for your advice addressing their concerns and some other questions he has. You are expected to examine the financial statements i