BSB61015 Advanced Diploma Of Leadership And Management In Business

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?

 

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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 (10 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)	$10,480

Answer 1:

Profit and Loss Statement

	$	$

 BALANCE SHEET 

Assets	$	Liabilities	$
		Total Liabilities
		Proprietorship/Owner’s Equity
Total		Total

Answer 2: 

Week 5 (10 marks)

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:

 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 is Business Ethics and professional ethics? 4. 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 (20 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 month, 20% in the second month after the visit, and 10% was never collected. 

From July new credit policies are expected to result in a collection pattern of 60%, 20%, 10% and 10% respectively.

The cost of medical supplies was $40 000 in June and is budgeted for $60 000 in August. Half of the suppliers’ accounts are paid in the month incurred and half in the following month. Salaries of $40 000 per month and other costs of $25 000 per month are paid in the month incurred.

Required:

1. Prepare a cash budget for the 3 months, July to September to examine the cash flows projections (Use the spreadsheet template to prepare the cash budget).
2. You are aware that there are some suppliers’ payment due in July and August. What relevant personnel you are required to discuss/negotiate the possible cash shortfall?
3. What possible contingency plan you can implement to avoid the forecasted cash flow shortfall
4. Task 2: Alternative debt collection policies

As the manager of Corby and Danes Ltd, you are concerned about the current collection policy from credit customers.  The current policy is that all sales are to be made on credit, with the expectation that 70% of all accounts receivable are collected in the month immediately following the sale:  20% in the second month, 8% in the third month, and the balance written off as bad.

The actual sales for the four months January to April were as follows:

January $40 000; February $50 000; March $60 000; April $60 000

The forecast sales for the next four months are:

May $70 000; June $80 000; July $80 000; August $80 000 

You need a report that will show how much cash you can expect to collect each month from accounts receivable for the period February to August.  You also like to know what the cash flow patterns would be if either of the two policies below were to be adopted from now (ie from May) on.

Alternative policy:

                        80% of the accounts receivable to be collected in the month following the sale, 10% in the second month, 8% in the third month and the balance written off as bad 

Required:  Show what the existing report on cash collection from accounts receivable looks like. 

2. Show how the additional reports revealing the cash flow situation under the proposed alternative policy would look. 

3. After analysing the data which policy you would recommend to improve the collection process for the month of May, June and July

1. Current policy:

Collections from accounts receivable
	Feb	Mar	Apr	May	June	July	Aug
	$	$	$	$	$	$	$
From sales in:
Jan   ($40 000)
Feb. ($50 000)
Mar. ($60 000)
Apr. ($60 000)
May ($70 000)
June ($80 000)
July ($80 000)

2. 
   Alternate policy:

Collections from accounts receivable
	Feb	Mar	Apr	May	June	July		Aug
	$	$	$	$	$	$		$
From sales in:
Jan ($40 000)
Feb. ($50 000)
Mar. ($60 000)
Apr. ($60 000)
May ($70 000)
June ($80 000)
July ($80 000)

Recommendation:  Week 7(20 marks) Task 1 You are required to research, identify and evaluate available financial management software applications for implementation in a small business or enterprise.

As a foundation to support your research and evaluation you are to prepare and deliver a written response addressing the following key criteria Price

• Usability
• Features and Functions
• Suitability
• Compatibility with other Software Applications
• Technical Support
• Training Opportunities
• Pros and Cons
• Your own personal Recommendations

For this response, it is essential that you develop something more than a common-sense approach.

Your plans need to be supported by wide-ranging research, providing a strong rationale for changes and recommendations proposed. 

Task 2: CREATE AND WRITE A FORMAL BUSINESS PLAN  BRIEF

 Develop a formal business plan for a small business or enterprise nominated by your Trainer and Assessor.

To demonstrate competency, you will need to consider in your analysis the capabilities and resources of the new enterprise, vision, mission, trends and developments in the marketplace, comparative market information, and legal and ethical restraints on the proposed business activity.

ASSESSMENT REQUIREMENTS

For this report, it is essential that you develop something more than a common-sense approach.

Your plan will need to be supported by wide-ranging research, providing a strong rationale for changes proposed.

The business plan or project plan must present a comprehensive and logical position which is followed through with control measures for implementation and review.

Key benchmarks to address and include in your presentation and business plan are as follows:

• Analyse and interpret business vision, mission, values and objectives

• Analysis of the strengths and weaknesses of a range of business plans 

• Implementation of a business plan including evaluation of performance against documented indicators in key results areas 

• Consult with key stakeholders to develop performance objectives and measures through consultation with key stakeholders 

• Review market requirements for the product or service, profile customer needs and research pricing options

• Identify financial, human and physical resource requirements for the business 

• Consider any permits or licenses that may be required for new activity

• Knowledge of performance measurement approaches and benchmarkingYour business plan will need to cover all core aspects of business planning, including marketing, financial, human resource, risk management and operational planning. 

• Legal and insurance issues should be reviewed and corresponding recommendations made for legal compliance embedded in your plan.

• Finally, the business plan should provide a forecast for the long-range direction of the business and its strategic success.

RELEVANT INSTRUCTIONS

1. The analysis and strategy demonstrates a knowledge and understanding of relevant business, management or industry theory.
2. Evidence of critical thinking in preparing the responses for the Business Plan
3. The strategy is incisive and includes a concise, relevant treatment of the issues and addresses the assessment criteria.
4. The strategy critically discusses and analyses the topic, range statement, performance criteria and foundation skills of the unit descriptor
5. All sources are referenced consistently and comprehensively using the recommended referencing system as prescribed in the subject description/outline.
6. Use of language is appropriate to academic writing, the industry context, Business Planning, Marketing, Human Resource Management principles, Financial Planning, Risk Management themes and the assessment criteria
7. The responses are succinctly and clearly written or presented in English
8. Overall presentation is professional including spell and grammar checked judicious use of headings, font size, layout etc.

1. Describe at least one (1) business that is profitable and explains why you think it is enjoying financial success.

A business that is profitable is YouTube channel. The business has been enjoying financial success these days because of various subscribers and views.

 

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?

There are many reasons for the failure of a new business in its first year of operation. Some of the reasons can be : ·         No differentiation in the market ·         Not customer oriented ·         Not able to communicate value propositions ·         Leadership breakdown ·         Wrong strategy

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3. Explain the following fundamental accounting concepts:

• Business Entity Concept

According to this concept, the transactions associated with the business shall be recorded separately from its owners or other businesses.

• Dual Aspect Concept

According to this concept, every transaction has a double effect and shall be recorded on two different accounts.

• Money Measurement Concept

According to this concept, every transaction that is recorded shall be measured in terms of money.

4. 
   Explain the following fundamental accounting concepts:

• Objectivity Concept

According to this concept, it states that the financial statements in an organization shall always be based on some solid evidence.

• Going Concern Concept

It implies that the business will continue its operations in future and will not discontinue its operations for many reasons.

• Periodicity Concept

According to this concept, the accountants will report the net income and cash flows of the company in each accounting period.

5. Explain the following fundamental accounting concepts:

• Cost Concept

This concept implies that the assets shall be recorded at the cash amount at the time when they are acquired.

• Conservatism Concept

According to this principle, the liabilities and expenses are recognized as soon as possible as there is uncertainty about the outcome but the revenues are recognized only when they are received.

• Materiality Concept

According to this concept, the important matters in accounting shall be disclosed and the trivial matters are disregarded.

 

6. Explain the following fundamental accounting concepts:

• Realisation Concept

According to this concept, the revenues can be recognized only when the services for the same are rendered or goods delivered.

• Matching Concept

In general, this concept means that the expenses are matched with the incomes that are generated from these expenses.

• Full Disclosure Concept

It requires the company to disclose all the important information related to the company so that the people associated with the company can make informed decisions.

7. 
   Provide four (4) examples of investment decisions

·           ·         Investment in R&D (research and development) ·         Investment in plant and machinery ·         The decision of entering a new market ·         The takeover of a company

8. 
   Provide five (5) examples of financing decisions

·         Capital investments ·         Debt financing ·         Revenue from sales ·         Paying for capital projects ·         Equity financing

9. 
   Provide three (3) examples of financial management decisions.

·         Issuing new credit for paying old debts ·         Opening new store ·         Extending credit to customers

10. 
    Explain the difference between financial accounting and management accounting.

Financial accounting	Management accounting
Reports on the results of entire business	It is reported at a detailed level like a profit of a product or product line.
Pays less or no attention to the overall system	It pays attention to small issues and finding ways to sort it out
Historical oriented	Future-oriented

11. 
    Provide five (5) examples of ratios that can be used for analysis and what they mean

·         Liquidity ratios: focuses on the ability of the firm to pay short-term debts. ·         Debt Ratios: focuses on the ability of the firm to meet its long-term obligations. ·         Turnover ratios: measures the firm’s efficiency for using its assets for the production of sales. ·         Profitability ratios: focuses on the ability of the firm to generate the profits. ·         Market value ratios help in knowing or studying the market value of the firm.

 

12. Provide the formulas for the following ratios:

• Gross Profit

Gross profit= Revenue-COGS/ total revenue

• Net Profit

Net Profit =Revenue-(operating expenses +cogs and +tax and interest)

• Inventory Turnover Ratio

Inventory Turnover Ratio = COGS/Average Inventory

• Debt to Assets Ratio

Debt to Assets Ratio = Total Liabilities / Total Assets

• Return on Investment

Return on Investment = gains –investment costs/investment costs

WEEK 3 (20 marks) 

ASSESSMENT ACTIVITY: RESEARCH
1.Research the following website and summarize the services, facilities, and products the Australian Tax Office provides for individuals and business.

Services: ·         Lodging tax returns’ ·         Capital gain tax ·         Assessing Income ·         Paying tax

Products: ·         Registration ·         Paying the ATO ·         Small businesses

2. 
   Explain and find one (1) example of a Bilateral or Regional Trade Agreement

The agreements between two nations at a time are called bilateral trade agreements. Example The transatlantic trade and investment partnership that would remove the current barriers to trade between European Union and the United States.

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3. Explain the Trade Practices Act. What is it? Who does it apply to?

This act is the legislative vehicle for the competition law in Australia it is now known as The Competition and Consumer Act 2010. It promotes fair trading and competition so that consumers can be protected.

The act applies to consumers, companies, businesses and shareholders, stakeholders of the company.

4. 
   Explain the following key Australian Taxation requirements:

• PAYG Withholding

Under this, the employer can withhold the tax from certain of the payments that are made to others. The payments include: ·         Payments made to workers under the labor-hire agreement ·         Payments to employees ·         Payments under voluntary agreements

• Company Tax

It is also called corporate tax or corporation tax and it is a direct tax that the jurisdictions impose on the capital and income or the legal entities and corporations.

• Goods and Services Tax (GS.)

It is a value-added tax that is levied on goods and services that are sold for domestic consumption. The costumers pay the GST but the government remits the same from the business that is selling the goods and services.

• Financial Probity

Probity basically means integrity, honesty, and uprightness. The name in itself is summed up in moral values. So financial probity means to be open and honest in all the financial and commercial matters that are related to funding and research.

• Australian Business Number (A.B.N)

 

ABN which is commonly known as Australian Business Number. It is an 11 digit number that helps the business to be identified by the community and business.

                   

• Business Activity Statement (B.A.S)

BAS is required to be lodged if a business is registered for GST. It helps the company to pay its GST, PAYG withholding tax, and other taxes.

• 
  Superannuation

It is a pension program that the company creates for its employee's benefits. It is also known as company pension plan.

• Fringe Benefits Tax (F.B.T)

The tax that the employers pay for the benefit of the employees in place of salary or wages is known as Fringe benefits tax.

• Income Tax

The tax that is imposed by the government on the financial income that is generated by all the entities is known as income tax.

 

5. What does International Commercial Terms (INCOTERMS) mean?

A series of pre-defined commercial terms that are published by the International chamber of commerce and that relates to the international commercial law is known as INCOTERMS.

 

6. Explain what the role of the following: World Trade Organization (WTO)

It is the umbrella organization that has the responsibility for overseeing that all the agreements have been negotiated and implemented just before it came into existence. It is also responsible for settling disputes among the various members.

 

7. What is GST(Goods and Services Tax and how is it calculated )?

GST or Goods and services tax is the tax that is levied on goods and services that are sold for the domestic consumption.

For calculating GST the GST rate is multiplied by the total value of supplies and advances.

WEEK 4(10 marks)

1. Prepare a Profit & Loss Statement and Balance Sheet using the information given below.

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)	$10,480

Answer 1: 

Profit and Loss Statement 

Opening Stock (opening food stock+ opening beverage)	35000	Sales	145000
Purchases (food purchases+ beverage purchases)	60000
Carriage Inward	Nil
Wages	58000	Closing Stock	45000
Gross Profit	37000	( food + beverage)
	190000		190000
Advertising                                                        1200
Insurance	1500	Gross Profit	37000
Rates	1500
Decoration	700
Office Laundry Food Linen and Glassware Liquor Repair   Net profit	2500 2900 4996 510 2558 2300   16336
Total	37000	37000	90

BALANCE SHEET

Assets	$	Liabilities	$
Cash at bank	38866	Bills Payable	10000
Bills receivable	10480	Capital	70000
Equipment	5200	Net profit	16336
		Total Liabilities	96336
		Retained earnings	(41790)
Total	54546	Total	54546

Answer 2:

The profit and loss report helps in understanding the profitability of the business by extracting various important figures.

Week 5 (10 marks)

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:

It is correct that professional ethics is the application of ethical principles by professionals who have an obligation to those who rely on their services. The examples of professional care are Licensed practical nurses who hold a license of a physician. 

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 the code of ethics on making decisions.

 A Financial Manager shall provide competent, timely and accurate information that presents in a fair manner the potential disclosure issues like legal ramifications 

Q3. What is Business Ethics and professional ethics?

Answer:

Business ethics is the study of the business policies and practices that are related to controversial issues like corporate governance, bribery, and corporate social responsibility.

On the other hand, professional ethics is concerned with personal and corporate standards of behavior that is expected by professionals.

Q4. What is Integrity?

Answer:

It is the fundamental value that is sought by the employers in the employees. It is the quality of being honest and has strong moral principles.

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 finalizing 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?

Answer:

In the above case, I understand that the managing director is the majority shareholder wants not to write down the stocks in the year-end accounts so that he can carry on the inflated stock valuation and the business can be sold at a high price. But, I being the finance director has some ethics as a professional so according to those code of ethics, I shall fairly disclose the true picture of the company. Whereas, being with the company for last 10 years I would need to work according to the company will along with that the company assured me that all the jobs of the employees will be kept. So, I think I will go with the decision of the company being ethical, not correct but correct for the welfare of many people. Week 6 (20 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 month, 20% in the second month after the visit, and 10% was never collected. 

From July new credit policies are expected to result in a collection pattern of 60%, 20%, 10% and 10% respectively.

The cost of medical supplies was $40 000 in June and is budgeted for $60 000 in August. Half of the suppliers' accounts are paid in the month incurred and the half in the following month. Salaries of $40 000 per month and other costs of $25 000 per month are paid in the month incurred.

Required:

1. Prepare a cash budget for the 3 months, July to September to examine the cash flows projections (Use the spreadsheet template to prepare the cash budget).
2. You are aware that there is some suppliers' payment due in July and August. What relevant personnel you are required to discuss/negotiate the possible cash shortfall?

Answer:

In order to discuss the possible cash shortfall, one can discuss the payment terms and increase the payment dates.

3. What possible contingency plan you can implement to avoid the forecasted cash flow shortfall

Answer:

The contingency plan that can be implemented to avoid the forecasted cash flow shortfall is the company can prioritize and identify the risks and can address all the business critical operations.

Monthly Revenue	120000	145000	50000	150000	140000
Particulars	May	June	July	August	September
Opening Balance (A)	0	0	-50000	-37500	-3500
Inflow
Revenue May Month	48000	36000	24000
Revenue June Month		58000	43500	29000
Revenue July Month			30000	10000	5000
Revenue August Month				90000	28000
Revenue September Month					84000
Total Inflow (B)			97500	129000	117000
Outflow
Medical Supplies Cost		-20000	20000	30000	30000
Salaries			40000	40000	40000
Another cost			25000	25000	25000
Total Outflow ©			85000	95000	95000
Closing Balance			-37500	-3500	18500

Task 2: Alternative debt collection policies

As the manager of Corby and Danes Ltd, you are concerned about the current collection policy from credit customers.  The current policy is that all sales are to be made on credit, with the expectation that 70% of all accounts receivable are collected in the month immediately following the sale:  20% in the second month, 8% in the third month, and the balance written off as bad.

The actual sales for the four months January to April were as follows:

January $40 000; February $50 000; March $60 000; April $60 000

The forecast sales for the next four months are:

May $70 000; June $80 000; July $80 000; August $80 000 

You need a report that will show how much cash you can expect to collect each month from accounts receivable for the period February to August.  You also like to know what the cash flow patterns would be if either of the two policies below were to be adopted from now (ie from May) on.

Alternative policy:

                        80% of the accounts receivable to be collected in the month following the sale, 10% in the second month, 8% in the third month and the balance written off as bad. 

Required: 

1. Show what the existing report on cash collection from accounts receivable looks like. 

2. Show how the additional reports revealing the cash flow situation under the proposed alternative policy would look. 

3. After analyzing the data which policy you would recommend improving the collection process for the month of May, June, and July

1. Current policy:

	Collections from accounts receivable
	Jan	Feb		Mar	Apr	May	June	July	Aug
			$	$	$	$	$	$	$
Actual sales in:	40000		50000	60000	60000
Forecasted Sales						70000	80000	80000	80000
Jan   ($40 000)	28000		8000	3200
Feb. ($50 000)			35000	10000	4000
Mar. ($60 000)				42000	12000	4800
Apr. ($60 000)					42000	12000	4800
May ($70 000)						49000	14000	5600
June ($80 000)							56000	16000	6400
July ($80 000)								56000	16000
August									56000
Total Inflow	28000		43000	55200	58000	65800	74800	77600	78400

 

2. Alternate policy:

	Collections from accounts receivable
		Jan	Feb	Mar	Apr	May	June	July		Aug
		$	$	$	$	$	$	$		$
From sales in:
Actual sales		40000	50000	60000	60000
Forecasted sales						70000	80000	80000		80000
Jan ($40 000)		32000	4000	3200
Feb. ($50 000)			40000	5000	4000
Mar. ($60 000)				48000	6000	4800
Apr. ($60 000)					48000	6000	4800
May ($70 000)						56000	7000	5600
June ($80 000)							64000	8000		6400
July ($80 000)								64000		8000
August										64000
Total Inflow		32000	44000	56200	58000	66800	75800	77600		78400

3. 
   Recommendation:

After analyzing the data I would recommend the alternative collection policy through the inflows from both ways are almost same the second one seems to be more advantageous. Week 7(20 marks)

Task 1 You are required to research, identify and evaluate available financial management software applications for implementation in a small business or enterprise.

As a foundation to support your research and evaluation you are to prepare and deliver a written response addressing the following key criteria:

• Price
• Usability
• Features and Functions
• Suitability
• Compatibility with other Software Applications
• Technical Support
• Training Opportunities
• Pros and Cons
• Your own personal Recommendations

For this response, it is essential that you develop something more than a common-sense approach.

Your plans need to be supported by wide-ranging research, providing a strong rationale for changes and recommendations proposed.

Task 2: CREATE AND WRITE A FORMAL BUSINESS PLAN

BRIEF

 Develop a formal business plan for a small business or enterprise nominated by your Trainer and Assessor.

To demonstrate competency, you will need to consider in your analysis the capabilities and resources of the new enterprise, vision, mission, trends, and developments in the marketplace, comparative market information, and legal and ethical restraints on the proposed business activity.

ASSESSMENT REQUIREMENTS

For this report, it is essential that you develop something more than a common-sense approach.

Your plan will need to be supported by wide-ranging research, providing a strong rationale for changes proposed.

The business plan or project plan must present a comprehensive and logical position which is followed through with control measures for implementation and review.

Key benchmarks to address and include in your presentation and business plan are as follows:

• Analyse and interpret business vision, mission, values, and objectives 

• Analysis of the strengths and weaknesses of a range of business plans 

• Implementation of a business plan including evaluation of performance against documented indicators in key results areas 

• Consult with key stakeholders to develop performance objectives and measures through consultation with key stakeholders 

• Review market requirements for the product or service, profile customer needs, and research pricing options 

• Identify financial, human and physical resource requirements for the business 

• Consider any permits or licenses that may be required for new activity

• Knowledge of performance measurement approaches and benchmarking

• Your business plan will need to cover all core aspects of business planning, including marketing, financial, human resource, risk management and operational planning.

• Legal and insurance issues should be reviewed and corresponding recommendations made for legal compliance embedded in your plan. 

• Finally, the business plan should provide a forecast for the long-range direction of the business and its strategic success.

RELEVANT INSTRUCTIONS 

1. The analysis and strategy demonstrate a knowledge and understanding of relevant business, management or industry theory.
2. Evidence of critical thinking in preparing the responses for the Business Plan
3. The strategy is incisive and includes a concise, relevant treatment of the issues and addresses the assessment criteria.
4. The strategy critically discusses and analyses the topic, range statement, performance criteria and foundation skills of the unit descriptor
5. All sources are referenced consistently and comprehensively using the recommended referencing system as prescribed in the subject description/outline.
6. Use of language is appropriate to academic writing, the industry context, Business Planning, Marketing, Human Resource Management principles, Financial Planning, Risk Management themes and the assessment criteria
7. The responses are succinctly and clearly written or presented in English
8. The overall presentation is professional including spell and grammar checked judicious use of headings, font size, layout etc.

Business Plan:

• Executive summary
• Enterprise description
• Product description
• Industry analysis
• Competition analysis
• Swot analysis
• Marketing Sub-plan
• Operations Sub-plan
• Budget
• Selected Options
• Milestone schedule