BSBESB403-Business Ventures Plans for Finance Report Writing – Accounting and Finance Assignment Help

Assignment Task

Task

Introduction:

Financial management involves planning, reporting and maintaining records on the financial activities of the business. Financial information is the basis of business insight and decision-making. Therefore, it is critical that you set realistic budgets, and gather financial data and action reports that are timely and accurate, to
ensure you and your stakeholders have the right information at the right time. 

• Prepare to plan finances.
• Develop a financial plan.
• Plan to acquire finance.

Section 1 introduction:

In this section, you will learn about preparing to plan finances:

• Identify and document costs associated with production and delivery of business products and services.
• Set profit targets according to business venture requirements and workplace procedures.
• Calculate prices based on costs and profit margin, as an hourly charge-out rate for labour or unit price for products.
• Calculate break-even sales point to establish business viability and profits margins.
• Identify appropriate pricing strategies in relation to market conditions to meet business profit targets.
• Prepare projected profit statement to supplement the business plan.

Introduction:

The amount you charge your customers for your products or services must be carefully planned. You must charge enough to recover the costs of purchasing the product and/or providing the service, and make a profit.

To calculate your selling prices, you need to:

1. Calculate the total cost of the unit or service.

2. Add the profit level you want to the product cost subtotal.

Calculating your direct and indirect costs, as well as overheads, will allow you to calculate your hourly rate for labour. This is shown in the following steps:

1. Determine total annual costs of direct labour and calculate the per hour rate.

2. Determine the total annual costs of indirect labour and calculate the per hour rate.

3. Determine overhead costs of running your business for the financial year and calculate as an hourly rate.

4. Combine direct labour, indirect labour and overhead hourly rates to arrive at your hourly charge out rate.

Section 1:

Scenario:

Joshua’s next step is to set projected profit targets for Constellation Cafe’s pre-made meals for the first 12 months. Based on the unit cost of meals and estimated sales per week, he sets a profit target of $50,000 for the first year of operation. He also identifies the working capital for the venture by determining the
current asset and liabilities, which he presents in a balance sheet.Joshua identifies the non-current assets that cannot be quickly converted to cash and develops an asset management strategy to provide overall direction for the management of these assets. This strategy involves the immediate write-off of assets worth less than $20,000 in the year of purchase, and graduated depreciation of assets that cost more than $20,000 over a period of three years.Joshua prepares cash flow projections to identify the amount needed by the business to cover the costs of the first month so that adequate finance is put in place. He then selects budget targets and creates
financial reports to communicate this information with management and enable the ongoing monitoring of financial performance.

This questionnaire includes multiple choice and true or false questions. There are five (5) questions, each with only one (1) correct answer. Choose the most correct answer for each.

Question 1:
The three types of costs for a business are:

a)  Fixed, variable and constant
b)  Material costs, capital costs and overheads
c)  Materials, equipment and labour
d)  Fixed, variable and overheads

Question 2:
Costs of goods sold (COGS) include:

a)  Costs of indirect labour
b)  Costs of materials required to produce the goods
c)  Taxes
d)  Overheads

Question 3:
Capital costs are ongoing recurring costs incurred by a business.

a)  True
b)  False

Question 4:
Break-even point means:

a)  The point where a business is making a profit
b)  The point where a business is making a loss
c)  The point where a business is making neither a profit nor a loss
d)  All of the above

Question 5:
Which of the following is NOT an example of a pricing strategy that a business could use?

a)  Variable pricing
b)  Mark-downs
c)  Multiple pricing
d)  Price fixing

Section 2 Introduction:

This section deals with developing a financial plan.

• Identify working capital requirements necessary to attain profit projections
• Identify non-current asset requirements and consider alternative asset management strategies
• Prepare cash flow projections to enable business operation in accordance with business plan and legal requirements
• Identify capital investment requirements accurately for each operational period
• Select budget targets to enable ongoing monitoring of financial performance

Scenario:

Joshua has already identified the projected profits and budget targets for Constellation Cafe’s new premade meals. He identified that there will be an extended period of negative cash flow, and now Constellation Cafe’s manager has asked Joshua to research and identify suitable sources of finance to cover expenses throughout this period.Joshua researches different sources of finance with the goal of securing a low-cost finance option on optimal terms. He starts by considering Constellation Cafe’s short and long-term needs, comparing overdrafts and loans, and researching different funding providers.He selects a bank loan and negotiates the terms of the loan in order to reduce the fees and achieve a competitive interest rate. He documents the strategies he used to select this financing option, reports this to management and receives approval and authorisation.

Question 1:

To set profit targets, you need to consider:

a)  Fixed and variable business costs
b)  The return on investment
c)  The return on any borrowed capital
d)  All of the above

Question 2:

Working capital is:

a)  Another word for cash
b)  The money and assets available to fund and grow the business
c)  The amount of time that elapses between investing in a product or service and receiving payment for that product or service
d)  All of the above

Question 3:

Current assets include:
 

a)  Cash, accounts receivable and long-term assets
b)  Cash, fixed assets and long-term investments
c)  Cash, accounts receivable and inventory
d)  Cash, inventory and fixed assets

Question 4:

Cash flow can be improved by:

a)  Increasing costs
b)  Decreasing turnover
c)  Slowing payments of expenses
d)  Decreasing your customer numbers

Question 5:

You must register for GST if your business has a GST turnover of $70,000 or more?

a)  True
b)  False