Variance Analysis and Debtor Management

This assignment requires a thorough analysis of variance reports and debtor schedules. Students must calculate key ratios like debtor days and interpret the results within the context of the provided financial data. The assignment emphasizes understanding how these financial metrics reflect overall company performance and potential areas for improvement.

Running head: MANAGE FINANCE
Manage Finance
Name of the Student:
Name of the University:
Authors Note:

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Table of Contents
Budget Variance..............................................................................................................................2
Debtors ageing ratio.........................................................................................................................3
Reference.........................................................................................................................................4

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Budget Variance
Houzit Pty Ltd
Variance to Budget
1 Quarter ended September-2015
Actual Results Budget-Qx Actual-Qx $ %
Variance F or U
Variance
Sales $3,394,247.63 $3,371,200.00 -$23,047.63 -1% U
– Cost Of
Goods Sold $1,934,721.05 $1,955,296.00 -$20,574.95 -1% U
Gross Profit $1,459,526.59 $1,415,904.00 -$43,622.59 -3% U
Gross Profit % 43% 42% -1% -2% U
Expenses
– Accounting
Fees $2,500.00 $2,500.00 $0.00 0% F
– Interest
Expense $21,127.00 $28,150.00 -$7,023.00 -33% U
– Bank
Charges $400.00 $380.00 $20.00 5% F
– Depreciation $42,500.00 $42,500.00 $0.00 0% F
– Insurance $3,347.50 $3,348.00 -$0.50 0% F
– Store
Supplies $749.84 $790.00 -$40.16 -5% U
– Advertising $200,000.00 $150,000.00 $50,000.00 25% F
– Cleaning $3,256.45 $3,325.00 -$68.55 -2% U
– Repairs &
Maintenance $16,068.00 $16,150.00 -$82.00 -1% U
– Rent $660,127.00 $660,127.00 $0.00 0% F
– Telephone $2,999.36 $3,100.00 -$100.64 -3% U
– Electricity
Expense $6,695.00 $5,245.00 $1,450.00 22% F
– Luxury Car
Tax $12,000.00 $12,000.00 $0.00 0% U
– Fringe
Benefits Tax $7,000.00 $7,000.00 $0.00 0% F
–
Superannuation $37,404.00 $37,404.00 $0.00 0% F
– Wages &
Salaries $415,600.05 $410,500.00 $5,100.05 1% F

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– Payroll Tax $19,741.00 $19,741.00 $0.00 0% F
– Workers’
Compensation $8,312.00 $8,312.00 $0.00 0% F
Total
Expenses $1,459,827.21 $1,410,572.00 $49,255.21 3% F
Net Profit
(Before Tax) -$300.62 $5,333.00 $5,633.62 -1874% U
Income Tax -$90.19 $1,600.00 -$1,690.19 1874% F
Net Profit -$210.44 $3,733.00 $3,943.44 -1874% U
Table 1: Variance Re4port
(Source: Created by Author)
Debtors ageing ratio
Particulars 2013/14 2014/15 2015/16
Trade Debtors 850,000 975,000 1212231.04
Sales 14,550,100 15,714,108 16971236
Debtor Days 21 23 26
Table 2: Debtor Schedule
(Source: Created by Author)

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Reference
Franks, J., 2014. LibGuides: Graduate Accounting Empirical Research: Accounting & Finance
Databases.
Unda, L.A., 2015. Board of directors characteristics and credit union financial performance: a
pitch. Accounting & Finance, 55(2), pp.353-360.