Mock Exam
Department School of Business
Module Code MN7244
Module Title Accounting Analysis and Valuation: Private and Public Sectors
Exam Duration (in words) Two hours (Online exam)
CHECK YOU HAVE THE CORRECT QUESTION PAPER
Number of Pages Four
Number of Questions Three
Instructions to Candidates
All questions are compulsory.
The wordcount is given for each question.
Total: 100 marks
The exam is 100% of the total module marks.
FOR THIS EXAM YOU ARE ALLOWED TO USE THE FOLLOWING:
Calculators Permitted calculators are the Casio FX83 and FX85 models
Books/Statutes provided
by the University
No
Are students permitted to
bring their own
Books/Statutes/Notes
No
Additional Stationery No
Question 1
You are assessing the performance of a retail company, Beta. Below are the statements of
profit or loss and the statements of financial position for the company at the end of the two
financial years 2020 and 2021.
Statement of Profit or Loss 2021 2020
￡000 ￡000
Revenue 650 610
-Cost of goods sold 400 380
-Depreciation 50 50
Operating Profit 200 180
-Interest expenses 30 25
Profit before tax 170 155
-Tax expenses 90 70
Net profit 80 85
Statement of Financial Position 2021 2020
￡000 ￡000
Assets
Non-current assets 2,100 2,000
– Accumulated Depreciation 500 450
Total Non-Current Assets 1,600 1,550
Current Assets
Inventory 500 200
Trade r
eceivables 450 600
Bank 300 400
Total Current Assets 1,250 1,200
Total Assets 2,850 2,750
Equity and liabilities
Equity
Contributed Equity 900 900
Accumulated Retained Earnings 550 500
Total Equity 1,450 1,400
Liabilities
Non-current liabilities
Long-term loans 700 600
Current liabilities
Trade payables 550 650
Other payables 150 100
Total Current Liabilities 700 750
Total Liabilities 1,400 1,350
Total Equity and Liabilities 2,850 2,750
Page 4 of 4
MN7244
All Candidates
Requirements:
a) Calculate and interpret appropriate financial ratios to assess the liquidity of the company
over 2020 and 2021. [10 marks]
b) Calculate and interpret appropriate financial ratios to assess the profitability of
the company over these two years. [10 marks]
c) Using the DuPont Analysis technique, discuss the change in Return on Equity
(ROE) over 2020 and 2021. [10 marks]
[30 marks]
Question 2
Critically discuss the claim that financial statements may not faithfully represent the financial
performance and position of a business and explain the limitations of financial statements
and reporting and hence ratio analysis. (400-500 words)
[30 marks]
Question 3
Critically discuss the main differences between private and public sector entities and the
implications of these differences for accounting and accountability. (500-600 words)
[40 marks]
END OF EXAM PAPER