The Chief Finance Officer has presented to the Board of Directors of a Public University the Annual

Financial Report and Statement for approval. As a member of the Board, you have been asked to

study the Financial Report and prepare a paper for further discussion at the next Board meeting.

The University has a student population of 12,000 with1,900 staff comprising of 1,000 academic staff

and 900 Non Academic. In 2018, the University had 1600 staffs. The University has completed the

construction of the main campus that will allow an increase of student capacity to 20,000.

Question 1 :

Your first task is to study the Assets and Liabilities of the University.

a) What are Assets? Please also discuss the value of asset over time. Give examples of

University assets that will increase in value and assets that will decrease in value over time.

Hint: if you buy a car for RM 100,000 in 2016, how much money will you get if you sell your

car now in 2020?

b) Total Assets for 2019 compared to Assets for 2018? Discuss the sudden increase in value of

the Assets.

c) What are Liabilities? Total Liabilities for 2018 and give your comments on Assets/Liabilities

of the University. What does it mean if the Liabilities are more than the value of the Assets?

Observation, Conclusion and Suggestions for further actions.

[30 MARKS]

[CO3, PO11]Question 2 :

Your second task is to study Revenue and Expenditure.

a) What are the key revenues and the total Revenue for 2019? Based on the revenue, who is the

most important client of the university? What must you do to retain this client?

b) What is Capital Expenditure? ( in the Government University a Development Fund is set up

for this expenditure) What is Operating Expenditure? What was the total expenditure of the

University for 2019? What does it mean if Revenue is less than Expenditure? Why had this

happened?

Comment on how well the Expenditure was managed in 2019.

c) What would you consider as Fixed Costs for the University?

Hint: consider a situation where the students have to be away from the campus for 1 year.

Will the lecture halls be used, if not in use would the airconditions be turned on, and if they

are not switched on, will your utilities electric bills be low?

d) What would be the Fixed Cost and Variable Cost per Student? Estimate the Cost Per Student

Per Year borne by the University. Compare this to the fees paid by the students. How can the

Cost per Student per Year be reduced ?

Observation, Conclusion and Suggestions for further actions.