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BSBFIM601 Manage finances / Assignment Student Name: Student ID: Assessment Type: Assignment Other: Assessor’s Name: Assessment Outcome: ☐ Satisfactory ☐ Not Yet Satisfactory Student Declaration: By submitting this assessment via Moodle, I declare that this is my own work and had not been copied or plagiarised from any other source. Please refer to the Student Handbook for more information. Assessment Conditions: Each assessment criteria is recorded as either Satisfactory (S) or Not Yet Satisfactory (NYS). A student can only achieve a ‘Satisfactory’ Assessment Outcome for the entire assessment when all assessment Criteria listed below are ‘Satisfactory’. A student who is assessed as ‘Not Yet Satisfactory’ is eligible for re-assessment with their trainer. All assessment answers must be typed, include this assessment cover sheet and uploaded in ‘WORD’ version to moodle. Assessment Criteria Element Performance Criteria S Develop and use emotional intelligence 1 Plan for financial management 1.1 Review and analyse previous financial data to establish areas which have generated a profit or loss ☐ 1.2 Undertake research to review reasons for previous profit and loss ☐ 1.3 Review business plan to establish critical dates and initiatives that will require or generate resources in the next financial cycle ☐ 1.4 Analyse cash flow trends 1.5 Review statutory requirements for compliance and liabilities for tax ☐ 1.6 Review existing software and its suitability for financial management ☐ 2 Establish budgets and allocate funds 2.1 Use previous financial data to determine allocations for resources ☐ 2.2 Make informed estimates of new items for inclusion in budget ☐ 2.3 Prepare budgets in accordance with organisational requirements and statutory requirements ☐ 3 Implement budgets 3.1 Circulate budgets and ensure managers and supervisors are clear about budgets, reporting requirements and financial delegations ☐ 3.2 Manage risks by checking there are no opportunities for misappropriation of funds and that systems are in place to properly record all financial transactions ☐ 3.3 Review profit and loss statements, cash flows and ageing summaries ☐ 3.4 Revise budgets, as required, to deal with contingencies 3.5 Maintain audit trails to ensure accurate tracking and to identify discrepancies between agreed and actual allocations 3.6 Ensure compliance with due diligence 4 Report on finances 4.1 Ensure structure and format of reports are clear and conform to organisational and statutory requirements S 4.2 Identify and prioritise significant issues in statements, including comparative financial performances for review and decision making 4.3 Prepare recommendations to ensure financial viability of the organisation ☐ 4.4 Evaluate the effectiveness of financial management processes ☐ ☐ ☐ ☐ FINANCIAL MANAGEMENT: ASSESSMENT WEEK 2 (20 marks) ASSESSMENT ACTIVITY: SHORT ANSWER RESPONSES 1. Describe at least one (1) business that is profitable and explain why you think it is enjoying financial success. 2. While the evidence suggests otherwise, there is a common view that many new businesses fail within the first year of operation. Why do you think a new business might not succeed? [Skip Breadcrumb Navigation] 3. Explain the following fundamental accounting concepts: · Business Entity Concept · Dual Aspect Concept · Money Measurement Concept 4. Explain the following fundamental accounting concepts: · Objectivity Concept · Going Concern Concept · Periodicity Concept 5. Explain the following fundamental accounting concepts: · Cost Concept · Conservatism Concept · Materiality Concept 6. Explain the following fundamental accounting concepts: · Realisation Concept · Matching Concept · Full Disclosure Concept 7. Provide four (4) examples of investment decisions 8. Provide five (5) examples of financing decisions 9. Provide three (3) examples of financial management decisions. 10. Explain the difference between financial accounting and management accounting. 11. Provide five (5) examples of ratios that can be used for analysis and what they mean 12. Provide the formulas for the following ratios: · Gross Profit · Net Profit · Inventory Turnover Ratio · Debt to Assets Ratio · Return on Investment WEEK 3 (20 marks) ASSESSMENT ACTIVITY: RESEARCH 1. Research the following website http://ato.gov.au/ and summarize the services, facilities and products the Australian Tax Office provides for individuals and business. 2. Explain and find one (1) example of a Bilateral or Regional Trade Agreement [Skip Breadcrumb Navigation] 3. Explain the Trade Practices Act. What is it? Who does it apply to? 4. Explain the following key Australian Taxation requirements: · PAYG Withholding · Company Tax · Goods and Services Tax (GS.) · Financial Probity · Australian Business Number (A.B.N) · Business Activity Statement (B.A.S) · Superannuation · Fringe Benefits Tax (F.B.T) · Income Tax 5. What does International Commercial Terms (INCOTERMS) mean? 6. Explain what the role of the following: World Trade Organization (WTO) 7. What is GST(Goods and Services Tax and how is it calculated )? WEEK 4 (20 marks) 1. Prepare a Profit & Loss Statement and Balance Sheet using the information given below. 2. Explain how the business is affected by the completed Profit and Loss Report. From the following financial Information Prepare a Profit & Loss Statement and Balance Sheet; Food Sales $25 000 Beverage Sales $42 000 Rooms Sales $33 000 Conference Sales $45 000 Opening Food Stock $10 000 Food Purchase $20 000 Closing Food Stock $20 000 Opening Beverage $25 000 Beverage Purchase $40 000 Closing Beverage Stock $25 000 Advertising $1 200 Rates (Council Fees for emptying Rubbish Bins, Landscaping and Street Cleaning) $1 500 Decorations (Christmas Trees or Flowers for Table Centre Pieces) $700 Repairs & Maintenance $2 300 Laundry $2 900 Office Supplies (Pens, Stationary) $2 500 Insurance $1 500 Wages $58 000 Cash in Bank $38 866 Retained Earnings for Previous Year -$41 790 Linen & Glassware $510 Liquor $2 558 Food $4 996 Equipment $5 200 Accounts Payable $10 000 Capital $70 000 Accounts Receivable (A/R) $480 3. Referencing the Accounting equation, for the following figures complete a Balance Sheet Inventory: Food $25,000 Inventory: Beverage $23,800 Bank Loan $15,500 Furniture & fittings $12,000 Trade Debtors $18,300 Bank Account $7,500 Computers $8,000 Petty Cash $1,200 GST payable $895 Buildings & Improvements $9,500 Trade Creditors $9,500 BALANCE SHEET TEMPLATE Assets $ Liabilities $ Total Liabilities Proprietorship/Owner’s Equity Total Total Week 5: (10 marks) ASSESSMENT ACTIVITY: RESEARCH Q1. Professional ethics is the application of ethical principles by professionals who have an obligation to those who rely on their services. Give examples of professional care: Q2. Codes of ethics are the most concrete form of communication by which professions acknowledge their obligations to society. The role of a financial manager involves discharging one’s responsibilities while ensuring compliance with all the obligations espoused in the code of ethics. Give an example how a financial manager can apply code of ethics on making decisions. Q3. What are “Business Ethics” and Professional “Ethics”? Q4. What is Integrity? Q5. How often does an organization need to perform an audit trail to make sure all transactions are recording with due diligence? How does integrity play a big role in this section? Q6. CASE STUDY: You have been the finance director of a clothing retailer for ten years. The company’s yearend is 30Th June, and you are finalising the year end accounts. You have recently been advised by the warehouse manager of a significant level of slow moving stock. The stock in question is now more than nine months old and would normally have been written down some months previously. The shareholders are trying to sell the company, and the managing director (the majority shareholder) has told you that it is not necessary to write down the stock in the year end accounts. You are sure that the managing director wants the financial statements to carry an inflated stock valuation because he has found a prospective buyer. The managing director has indicated to you that, if the proposed deal is successful, all employees will keep their jobs and you will receive a pay increase. What would you do? Week 6: Cash Budget and Debt Collection (10 marks) TASK 1: Cash budget: service industry Dr Healer is the manager of a medical clinic and is concerned about the cash flow shortages which arose somewhat unexpectedly recently in the practice. At 30 June the bank account showed an overdraft of $50 000. Dr Healer believes that the cash flow problems stem from lack of attention to outstanding patient accounts and the purchase of expensive medical supplies in large quantities at irregular intervals. The good doctor has asked you to help design a spreadsheet to investigate the cash flow problems. You discover the following data: Revenue: May $120 000 (actual) June $145 000 (actual) July $50 000 (budget) August $150 000 (budget) September $140 000 (budget) Past experience shows that 40% of the consultation revenue is collected in the month of the visit, 30% in the following