BSBFIM501 - Manage Budgets And Financial Plans - Access Financial Plans - Metropolitan INC Case Study - Finance Assignment Help

Assignment Task

The purpose of this assessment is to assess the student in the following learning outcomes: 

1.1 Access budget/financial plans for the work team
1.2 Clarify budget/financial plans with relevant personnel within the organisation to ensure that documented outcomes are achievable, accurate and comprehensible
1.3 Negotiate any changes required to be made to budget/financial plans with relevant personnel within the organisation
1.4 Prepare contingency plans in the event that initial plans need to be varied
2.1 Disseminate relevant details of the agreed financial plans to team members
2.2 Provide support to ensure that team members can competently perform required roles associated with the management of finances
2.3 Determine and access resources and systems to manage financial management processes within the work team
3.1 Implement processes to monitor actual expenditure and to control costs across the work team
3.2 Monitor expenditure and costs on an agreed cyclical basis to identify cost variations and expenditure overruns
3.3 Implement, monitor and modify contingency plans as required to maintain financial objectives
3.4 Report on budget & expenditure in accordance with organisational protocols
4.1 Collect and collate for analysis, data and information on the effectiveness of financial management processes within the work team
4.2 Analyse data and information on the effectiveness of financial management processes within the work team and identify, document and recommend any improvements to existing processes
4.3 Implement and monitor agreed improvements in line with financial objectives of the work team and the organisation
4.4 Petty cash calculation

CONTEXT & SCENARIO
You (acting as Peter) have recently joined as a general manager at Metropolitan INC. (a diversified organisation) that operates various small business branches across Sydney. As the general manager, who not only looks after the overall operation of the business but also attends meetings with the directors and investors when proposing any changes and expansion of the business. You will act as Peter (General Manager) to progressively completing the organisational tasks one after another within the simulated environment for the various other businesses owned by Metropolitan INC. Your trainer will be one of the important stakeholders for your work and will act as the Director of Operations. Your trainer will advise you and approve your financial plans and relevant plans that you will prepare for the various businesses of the organisation.

Metropolitan furniture is one of the big operations for the company but registered as a small business. Peter has asked to prepare a proposed budget for the forthcoming quarter.  He consults with the sales manager and finds that:

Estimated sales are as follows:

In consultation with the production manager he estimates that the cost of goods sold is to be budgeted at 45% of the sales figure. The salaries are expected to be $65,000 per month. When sales exceed $260,000 in any one month, the sales team is entitled to an additional 5% commission on the excess sales over this figure. Other expenses are estimated to be $35,000 per month. The owner of the organisation is concerned about the cash flow which was not thought of before. The owner is of the opinion that the collection of cash from sales is slow and this could possibly lead to cash flow problems to the organisation. As Peter has never forecasted cash flow before he sets about collecting information on this.
Peter estimates that 80% of the total sales are going to be cash sales where the bill is settled when the goods are purchased or delivered. 10% of the month’s sales settle the accounts owed in the month following sales. Others (i.e. 10% of the month’s sales) settle in the month after.

Additional information for Cash Flow Statement:
The organisation gets a month’s credit on its purchases. That is, the accounts for the purchases (COGS) made in one month is settled in the following month.

• All salaries are paid in the month as they are incurred.
• The additional commission is paid in the month after the month in which it was earned.
• Other expenses are paid in the month they were incurred.
• The bank balance at the beginning of the first month is estimated to be $40,000.

1. Show the profit and loss calculations for the April, May and June
2. Show the cash flow projection calculations for April, May and June
3. Will the business have adequate financial provision to pay tax? Why? Visit the ATO website (www.ato.gov.au) and find out what is the tax rate (%) they will have to pay
4. If the cash flow statement and the P & L are productive, then what are the relevant people Peter needs to communicate if he establishes a business plan? How can Peter ensure that documented outcomes are achievable, accurate and comprehensible?
5. If the P & L showing good profit trend and the forecasted cash flow statement returns positive results, then marketing and operational departments may tend to expand their budget and therefore the business may have cash shortage in future. Does Peter require a contingency plan?

Task 1: Change Analysis and Decision Making
Does the above cash flow statement show a positive /negative position on the end of December? Do you (acting as Peter) require negotiating any immediate changes with relevant personnel for a better outcome? If so, justify your answer:

Task 2: Cash Flow Outcome Analysis
Do you (acting as Peter) need to worry about the outcome of the cash flow statement of the above calculation? 

How can you prepare contingency plans in the event that initial plans need to be varied ?

How can you Implement, monitor and modify contingency plans as required to maintain
financial objectives?

How can you report the above budget and expenditure in accordance with organisational
protocols?

Task 3: Petty Cash
Metropolitan stationary shop is another small business in Eastern Sydney. Acting as Peter, you want to keep on track of all the small expenses and asked the accounts manager to collect and collate for analysis, data and information on the effectiveness of financial management processes within the work team and present the petty cash book for the month of January.

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