BSBFIM601 Manage Finances Assessment Tasks

This document contains the assessment tasks for BSBFIM601 Manage Finances. It includes knowledge questions and competency outcomes. The assessment tasks are used to measure the understanding and underpinning skills and knowledge of this unit of competency. It is important to read the instructions carefully and provide detailed answers.

ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
ASSESSMENT INSTRUCTIONS
Overview
Prior to commencing the assessments, your assessor will explain each task and the terms and submission
of your task. Please consult your assessor if you are unsure of any questions. It is important that you
understand adhere to the terms and conditions and address each task. The assessor will support you
throughout this process.
Written work
The assessment tasks are used to measure your understanding and underpinning skills and knowledge of
this unit of competency. When answering please ensure you address each criterion and sub-point,
demonstrate your research of each of the questions and cover the topic in a logical and structured
manner.
Active participation
It is a condition of enrolment that you actively participate in your studies. Active participation is
completing all tasks on time. If you do not participate you will be required to report to Student Services
Coordinator.
Academic Integrity
Academic Integrity is about the honest presentation of your academic work. It means acknowledging the
work of others while developing your own insights, knowledge and ideas.
As a student, you are required to:
• Undertake studies and research responsibly and with honesty and integrity
• Ensure that academic work is in no way falsified
• Seek permission to use the work of others, where required
• Acknowledge the work of others appropriately
• Take reasonable steps to ensure other students cannot copy or misuse your work
Plagiarism
Plagiarism means to take and use another person's ideas and or manner of expressing them and to pass
them off as your own by failing to give appropriate acknowledgement. This includes material sourced
from the internet, RTO staff, other students, and from published and unpublished work.
Plagiarism occurs when you fail to acknowledge that the ideas or work of others are being used, which
includes:
• Paraphrasing and presenting work or ideas without a reference
• Copying work either in whole or in part
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ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
• Presenting designs, codes or images as your own work
• Using phrases and passages verbatim without quotation marks or referencing the author or web
page
• Reproducing lecture notes without proper acknowledgement
• Handing in assessments without the adequate acknowledgement of sources used, including
assessments taken totally or in part from the Internet
If it is identified that you have plagiarised within your assessment task, then we will organise a meeting
to discuss this with you.
Collusion
Collusion means unauthorised collaboration on assessable work (written, oral or practical) with other
people. This occurs when a student presents group work as their own or as the work of someone else.
Collusion may be with another RTO student or with individuals or students external to the RTO. This
applies to work assessed by any educational and training body in Australia or overseas.
Collusion occurs when you work without the authorisation of the teaching staff to:
• Work with one or more people to prepare and produce work
• Allow others to copy your work or share your answer to an assessment task
• Allow someone else to write or edit your work (without rto approval)
• Write or edit work for another student
• Offer to complete work or seek payment for completing academic work for other students.
Both collusion and plagiarism can occur in group work. For examples of plagiarism, collusion and
academic misconduct in group work please refer to our policy on Academic integrity, plagiarism and
collusion.
Plagiarism and collusion constitute cheating. Disciplinary action will be taken against students who
engage in plagiarism and collusion as outlined in our policy.
Proven involvement in plagiarism or collusion may be recorded on students’ academic file and could lead
to disciplinary action.
Copyright
You must be careful when copying the work of others. The owner of the material may take legal action
against you if the owner's copyright has been infringed. You are allowed to do a certain amount of
copying for research or study purposes. Generally, 10% or one chapter of a book is acceptable, where the
participant is studying with, or employed by, an educational institution.
Competency Outcomes
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ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
Each activity in this assessment tasks will be marked as either Satisfactory or Not Satisfactory.
If your work is marked as Not Satisfactory you will be provided with feedback from your assessor and
then given time to complete the task. Your assessor will provide you with a timeline in which you will be
required to submit your task. Resubmission timeline will be determined by the assessor and based on the
extent of the re-submission.
When you have completed all tasks in this document you will be granted an overall competency outcome,
which will be either Competent or Not Yet Competent.
If your work is marked as Not Yet Competent you will be asked to resubmit the assessment tasks as
indicated by your assessor. You will not be able to gain competency if any of your tasks are not fully
completed.
Assessment Appeals Process
If you are dissatisfied with the outcome of one of the assessment tasks or the final outcome of the
assessment task because you feel that the result is unfair or incorrect, you may request to have the task/s
or overall assessment task reviewed. If you are still dissatisfied with the outcome, you may lodge a
formal assessment appeal. Refer to SBTA’s Complaints/Appeals Policy and Procedure.
Application of the unit
This unit describes the skills and knowledge required to undertake budgeting, financial forecasting and
reporting and to allocate and manage resources to achieve the required outputs for the business unit. It
includes contributing to financial bids and estimates, allocating funds, managing budgets and reporting
on financial activity.
It applies to individuals who have managerial responsibilities which include overseeing the management
of financial and other resources across a business unit, a series of business units or teams, or an
organisation. It covers all areas of broad financial management. In a larger organisation, this work would
be supported by specialists in financial management.
Assessment matrix
Element Assessment Tasks
1. Plan for financial
management
1.1/1.2/1.3/1.4/1.5/1.6 Tasks 1 & 2
2. Establish budgets
and allocate funds
2.1/2.2/2.3 Tasks 1 & 2
3. Implement budgets 3.1/3.2/3.3/3.4,3.5 Tasks 1, 3 & 4
4. Report on finances 4.1/4.2/4.3/4.4 Tasks 1, 3 & 4
Performance evidence
 plan for financial management
 read and review profit and loss statements, cash flows and ageing
Tasks 1, 2, 3 & 4
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ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
summaries
 prepare, implement and revise a budget which aligns with the business
plan, is based on research and analysis of previous financial data and cash
flow trends, and meets all compliance requirements
 contribute to financial bids and estimates
 establish a budget and allocate funds in accordance with statutory and
organisational requirements
 communicate with other people including:
o reporting on financial activity and making recommendations
o identifying and prioritising significant issues
o ensuring managers and supervisors are clear about budgets.
 analyse the effectiveness of existing financial management approaches
including reviewing financial management software, managing risks of
misappropriation of funds, ensuring systems are in place to record all
transactions, maintaining an audit trail and complying with due diligence.
Knowledge evidence
 identify the requirements for financial probity
 describe the principles of accounting and financial systems
 explain Australian, international and local legislation and conventions
that are relevant to financial management in the organisation
 outline the requirements of the Australian Tax Office, including Goods
and Services Tax, Company Tax, Pay As You Go.
Task 1.5
Tasks 1.6, 1.9, 1.10
Tasks 1.1, 1.2, 1.3, 1.4
Tasks 1.7 and 1.8
Foundation skills Reading, writing, oral communication, numeracy,
navigate the world of work, interact with others, get
the work done
Tasks 12,3,4
Dimensions of
competency
Task skills, task management skills, communication
management skills, analysis & problem-solving
skills
Tasks 12,3,4
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ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
Assessment Task 1: Knowledge questions
Instructions to the students
The knowledge test will establish your underpinning knowledge in this unit of competency. It is
important that you read each question carefully and provide detailed answers in the space provided. You
can research the answers using the Internet, however, your answers must be in your own words. Your
assessor will be checking to ensure that you have not copied from any other students in your class.
Questions:
Read all the questions below in class with your colleagues and your trainer and assessor, and provide
answers to each question below.Answer guide: This assessment task is to be typed. Answers must be a minimum 2 paragraph (150
words) unless otherwise specified in the actual question.
1.1 Research and explain the following Australian, international and local legislation and conventions
that are relevant to financial management in the organisation and how it is relevant. Record your
answers in the table below. (350 - 400 words)
Relevant legislation or
convention
Explanation
Australian Securities
and Investments
Commission Act 2001
(Cth)
Is an independent body of the government of Australia that that
regulates the corporate sector. Australian Securities and Investments
Commission Act was established in the year 1998 upon the
recommendations of Wallis Inquiry. This act mainly enforces and
controls laws concerning company and financial services with the
objective of protecting consumers of Australia. ASIC keeps the names of
businesses and companies of Australia online whereby they can be
searched and found. Among the categories of organizations that can be
retrieved online include associations, companies, foreign companies and
managed investment schemes. In the ASIC’s registers, both current and
historical information about an organization is kept and made easily
accessible to anyone interested in it.
Corporations Act 2001
(Cth)
This act which outlines the laws concerning business entities both at
interstate and federal level in Australia. The corporates act deals mainly
with companies as well as other entities like the case of partnerships and
managed investment schemes. This act plays a critical role in regulating
the process of formation, registration and operation of companies and at
the same time outlines the duties of officers and matters of fundraising.
Through the Corporation Act 2001, corporations are ensured that they
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ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
are formed in the right way and the operate rightly in accordance with
the law. And since in the formation of almost every corporation it
requiring seeking of enough capital, this Act also outlines the process of
acquiring funds for the corporation.
Competition and
Consumer Act 2010
(Cth)
Competition and Consumer Act 2010 is an act that was passed and is
usually monitored by the parliament of Australia. This act is also
referred to as the Trade Practices Act 1974. The Act provides legislation
to matters of competition law and aims at promoting competition,
offering protection to the general consumers and encouraging fair
trading practices in Australia. There are four organizations that have
been established by this Act with the task of administering it. These
organizations include; the National Competition Council, Australian
Competition Tribunal and Australian Energy Regulator. The Competition
and Consumer Act 2010 is much relevant since it helps to ensure healthy
competition in the Australian market where business entities do not
engage in unfair competition tactics that affect others negatively and at
the same time the Act protects consumers against any form of
exploitation that they may receive from business entities. It ensures that
consumers are charged reasonable prices for the products or services
provided in the market and the products are safe and of good quality.
1.2 Explain the significance and objective of “Accounting Standard AASB 101and where is the standard
application. (Guide: 250 words).
The Australian Accounting Standard Board is an agency that outlines and specifies the standards of
financial reporting that are applicable in the Australian economy business entities both in public and
private sectors. This board also facilitates the development of financial reporting standards globally
and also has a hand in the standard setting of the Australian society globally. The AASB is crucial since
it keeps on check the operations of companies in Australia and their financial operations with the sole
objective being to protect creditors, consumers and investors in Australia. Through this board, the
accounting process of business entities is standardized such that there are no variations that may
promote unhealthy accounting practices. When accounting records and financial operations or rather
records are kept clear and straightforward, other stakeholders to business entities such as investors
and creditors are usually secure and any of their dealings with the companies is quite certain. The
Australian Accounting Standards Board is applied among entities that are not controlled by the
Corporations Law. These accounting standards are also applied in the preparation of financial
statements by all entities. In summary, the AASB provides accounting standards that is should be
applied by; all the entities that are needed to conduct reports on their finances by the Corporations
Act 2001, governments in organizing reports of finances relating to the government at large and any
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ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
other sector related to it, and all entities both in public and private either for-profit or non-profit
sectors that prepare financial statements that are for general purpose.
1.3 Explain in 150 words, “IPSAS 1 - Presentation of Financial Statements and explain what are the key
differences between IPSAS 1 and AASB 101?
IPSAS 1 provides a basis in which general-purpose financial statements ought to be
presented so as to ensure they are comparable with the financial statements of the entities
in the previous periods and also, with those of other entities in the public sector. IPSAS 1
lays out the general requirements for organizing and conducting financial statements that
are prepared the accrual basis of accounting and guides the content of the financial
statements. AASB provides accounting standards that is should be applied by; all the entities
that are needed to conduct reports on their finances by the Corporations Act 2001, governments
in organizing reports of finances relating to the government at large and any other sector related
to it, and all entities both in public and private either for-profit or non-profit sectors that prepare
financial statements that are for general purpose. Also, the Australian Accounting Standards
Board is applied among entities that are not controlled by the Corporations Law. These
accounting standards are also applied in the preparation of financial statements by all entities.
1.4 Research and explain the “Financial Management and Accountability Act 1997 (FMA Act)” and how
it applies to financial management in an organization.
The FMA Act has its purpose in providing a guideline for handling public money and property.
An accounting system concerning public money is established by this Act relying on the
Consolidated Revenue Fund. This Act applies in the management of an organization’s finances
through collection and custody of public money, performing of fund appropriations and
payments, reporting and auditing among other activities.
1.5 Explain what are the legislative requirements that a public authority must comply with to maintain
financial probity? Write your answer in 250 - 300 words.
Financial probity is the quality of having or embracing truthfulness and integrity when handling
financial records and producing financial statements. For a public authority to ensure financial
probity there are a number of requirements that it has met. Firstly, the public authority should be
able to apply public sector values whereby informed decisions are made based on merit.
Secondly, the public authority should be in the position to treat tender participants fairly and
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ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
equally. For instance, the authority should put in place a process in which questions and
clarifications are received and responded to. Also, the public authority should enable
transparency and easy access to financial statements. Thirdly, the public authority should
emphasize auditable, transparent and accountable financial handling process. This will be done
creating and keeping appropriate records of all financial documents and other relevant records
related to financial management. Fourthly, the public authority should ensure there’s a high level
of commitment to financial management activities. In this commitment, the public authority must
conduct themselves in a manner that is fair and honest. The expenditure on, be it a tender, it
should be based on agreement amongst all the key stakeholders
1.6 Explain the following principles of accounting and financial systems, (Guide: 250 – 300 words):
a) Accrual principle
b) Cost principle.
c) Going concern principle.
d) Revenue recognition principle.
Accrual principle is the idea that specifies that accounting transactions should be recorded during
the time period in which the actually take place and not the time in which the cash transactions
related to them take place. The accrual principle is a significant requirement in almost all
accounting fields such as the International Financial Reporting Standards among others. For
instance, accrual principle is properly used in recording revenue especially when you have
invoiced your customer unlike when the customer has paid you and also when recording wages
during the time earned unlike when it is been paid.
The cost principle is a concept that equity, asset and liability investment to be initially recorded at
their original acquisition cost. This idea is mostly used in recording transactions, it is much
appropriate to deal with original purchase cost as an objective and a reliable evidence of value.
Going concern principle is a concept in accounting that specifies that a company will keep on
operating even in the foreseeable future. The meaning of the going concern principle becomes
much evident especially when the value of a business that is operating is compared with the value
of another business that is being liquidated.
Revenue recognition principle is an accounting requirement that specifies that revenues should be
indicated in the income statement in the time in which they are earned and not in the time of
collection of the cash. According to this principle, in case there’s some doubt in regard to whether
a customer will make the payment, the seller is required to consider including an allowance for
doubtful accounts as per the amount expected to be reneged by the customer.
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ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
1.7 It is important that all business complies with the Australian Tax Office. Research the following
requirements of the Australian Tax Office and explain how they are applied in the financial
operation of the business. (Guide: 250 – 300 words)
Company Tax In Australia, companies have been taxed depending on their size. For
instance, small business entities whose annual revenue is less than $2
million have been eligible for a 28.5% tax rate. Initially, Australia
embraced a classical dividend taxation system whereby both the revenue
and of the company and dividends paid to shareholders have taxed a
system referred to as a double taxation.
PAYG withholding Pay As You Go (PAYG) withholding in Australia requires the employer
when they are making payments to employees to withhold some amount
that they send to the Australian Taxation Office. This requirement by the
Australian Taxation Office targets payments made to employees and
contractors. The employer can only withhold an amount from payments
upon registering for PAYG withholding.
Goods and Services
Tax
This is a value-added tax on the sales of almost all goods and services
through it usually exempts some goods and services such as healthcare,
some kinds of food and housing items. Businesses in Australia are
registered for goods and services tax and as result, they have to charge the
customers this kind of tax on all taxable goods and services provided by
the business.
Fringe Benefits Tax
(FBT)
Fringe benefits tax is a levy charged on benefits that are provided by the
employer and are not cash based. It is the employer who is targeted by
this kind of tax and not the employee. Non- cash benefits that are levied
this tax include mobile phones, briefcases and laptops that are transferred
from the employers to the employees. However, some benefits are
exempted from FBT including remote area housing, employee relocation
expenses among others.
Business Activity
Statement (BAS)
BAS is usually a form that is handed over to the Australian Taxation Office
by business entities that are registered to report their tax liabilities
including Goods and Services Tax, Fringe Benefits Tax, Pay As You Go
withholding and Luxury Car Tax. Businesses in Australia are required to
submit this statement on a quarterly basis through some other entities
may be mandated to report more frequently.
Superannuation
Guarantee Scheme
This is a scheme provided by the government of Australia to encourage its
population to accumulate part of their salary to provide them with some
income the time they retire. Businesses are required by the Australian Tax
Office to make superannuation contributions from the wages and salaries
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ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
of their employees which is later refunded once the employees retire.
1.8 What is the requirement of the Australian Tax Office when establishing a new business? Explain in
50-100 Words.
When coming up with a new business in Australia the Australian Tax Office (ATO) requires you
to apply for a business number and a unique business name. An Australian Business Number
(ABN) is usually an 11-digit number that is uniquely designed for a given business and serves
as an identifier for the company or business to the government.
As soon as it is identified the funding source it is necessary to register with ATO the correct
taxes such as Goods and Services Tax (GST), Pay as You Go (PAYG), Fringe Benefits Tax (FBT),
where some of them are compulsory.
1.9 How does diligence apply to the role of a Company Director? (Guide: 100 words)
Company directors are very vital people in any company or organization since they are the
heads and being at the top, they influence the performance of the company. It is therefore
critical for company directors to have a high level of diligence as this helps a lot in the
operations of the company. Any company in operation is usually confronted by a number of
risks ranging from financial, regulatory, board performance risk and reputational risk.
These kinds of risks can affect a business or company significantly hence it is only through
the diligence of the company directors that the company is able to stay immune to all these
risks.
1.10 An understanding of financial management requires knowledge of the relationship between
financial management and accounting, accounting principles, and accounting standards. Explain the
following accounting principles (Guide: 450 – 500 words)
Accounting
Principle
Explanation of the concept
Business entity This principle is used to establish that all the transactions referred to a
specific business or organisation have to be kept apart from other and
different business or organisation. Recording separately allows to exclude
assess or liabilities not related to the business assessed.
Monetary unit This principle is refered when the usage of a stable unit of currency only
should be used in record transactions.
For instance, in the United States of America, they have a dollar while in
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ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
another place like the United Kingdoms the pound forms the monetary unit.
Beyond domestic usage of monetary units, the monetary units are usually
related to each other internationally through the values in the exchange
rate. Monetary unit specifically refers to currency and overtime money has
been used as a unit of measurement in accounting. The monetary unit is
mostly used in the expression of economic events and business transactions
in monetary terms.
Materiality
Principle
The materiality principle specifies that an accounting standard could be
despised if the net effect of doing so has a very small or insignificant impact
on the financial statements such that it does not mislead the reader of those
financial statements. The material concept varies depending on the size of
the business entity. The materiality concept is very vital especially when
deciding how a transaction should be recorded. Some transactions could be
recorded as part of the closing process as eliminating some transactions
could significantly make the process of issuing financial statements less
time-consuming.
1.11 Assume that you are working as an Accountant for an organisation. The organisation wants to
conduct financial statement audit as part of closing the financial books and before filing the income
statement during closing. Explain in 350-400 words, the four (4) steps that you will take to conduct
the audit.
In order to conduct a financial statement audit it is necessary to follow correctly the four steps of
auditing. Firstly, the auditor or committee must plan how is going to be carried out the audit, which
process in specific as well as personal involved and design all the schedule and methods to meet
according to the evaluation, establishing what are the points and elements that are necessary to
know for meeting the objectives. Then, a phase of testing is followed, where the transactions, its
recording, documenting, the principles around them are going to be evaluated to see the efficiency
and if the personal have been capable in the control. As third step, an analytical testing of the
balance is important to meet the expertise and good practice of the financial area in the
organisation and check if they have had some difficulties about performing this activity or if the
process has been correct or has some issues. To finalise, gathering the previous data, the
accountant, auditor or committee can prepare the audit report to inform the financial department,
stakeholders and related about the findings in the organisation and allow them to meet the
opportunities of improvement or the congrats for the processes.
1.12 Explain the following methods of analysing a financial statement, in 30-50 words each:
a. Vertical analysis
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ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
b. Horizontal Analysis
c. Ratio Analysis
d. Trend Analysis
a. The vertical analysis involves analysing financial statement proportionally whereby each line item
is listed as a percentage of another on a financial statement. It is mostly within a financial
statement that a vertical analysis is used so that it can be easier to identify the relative account
balances proportions.
b. Horizontal analysis is applied in the analysis of financial statements to compare historical data
such as line items over periods of accounting. In horizontal analysis, there are two options which
could be used which are absolute comparisons or percentage comparisons.
c. Ratio analysis involves analysing in a quantitative manner the information in the financial
statements of a company. It’s through ratio analysis that the management is able to evaluate the
different aspects of the operating and financial performance of a company such as its liquidity and
solvency.
d. Trend analysis is a technique that tries to foresee future movements in stock price based on a
trend that has been observed recently. Trend analysis usually assumes that the events of
yesterday will definitely give one a rough idea of the events of tomorrow.
1.13 How is the following calculated in a Profit and Loss Statement?
a. Gross profit
b. Gross profit margin
c. Operating profit
d. Net profit
Write your answer in 100-150 words.Gross profit is usually what a business remains after deducting the operating costs of a business
from its total sells. In simple terms, gross profit is the difference between revenue and cost of
goods sold.
Gross profit margin is usually calculated from dividing gross profit by revenue.
Operating profit is a figure used in accounting to measure the profit earned from a business’
operations without including deductions of interest and taxes. Operating profit is calculated by
deducting the cost of goods sold from the operating revenue.
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ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeksNet profit could also be referred to as net income which is obtained by subtracting the cost of
goods sold, operating expenses, other expenses, interest and taxes from the total revenue of the
business.
1.14 How often should you review a business plan and explain why? Write your answer in 100-150
words.
A business should be reviewed at least once in a year. I will consider updating a business plan at
least once a year simply because of factors such as new financial year, changes in the market, need
for financing, competition, changes in management, new products and services. A company that is
growing is expected to have new products and services almost every year and this to be possible a
business plan has to be drawn. Also, the current market for products and services is very
competitive and for your business to remain competitive it has to keep strategizing its objectives
over and over again. Lastly, when a business is planning to expand its operations it has to seek for
financial and this need is met by having an updated business plan.
1.15 How would you use the following ratios to analyse the organisation’s cash flow? Explain in 30-50
words each:
a. Cashflow solvency
b. Cashflow margin
c. Cash flow return on assets
a. Cash flow solvency is a concept that expresses the ability of an enterprise to pay or meet
its obligations. Cash flow solvency is usually expressed as operating cash flow over the
liabilities of a company’s operations. Using cash flow solvency one can analyze an
organization’s cash flow by observing the number of times the annual income is higher
than the liabilities of a business.
b. Cash flow margin is a type of profitability ratio that is commonly used by businesses. Cash
flow margin is obtained by dividing cash flows from operations by net sales. Using the cash
flow margin one can analyse an organization’s cash flow by measuring the amount of
money that is generated from the organization’s operations per every dollar in sales the
business makes.
c. Cash flow return on assets is an indicator that is used by firms to evaluate how an asset or
an investment performs. Cash flow return on assets is computed by dividing cash flow by
the market value of capital employed. CFROI could be used to analyse an organization’s
cash flow by observing rates of percentage changes of the cash flows to the market value of
BSBFIM601 Assessment Task V24 October 2017 P a g e | 13

ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
the capital employed.
1.16 When choosing an accounting software for your business, what should you consider as important
factors? List any six (6).
a. User-friendly software
b. Multi-currency transactions
c. Web-based application
d. Integration with other business software
e. Secure data
f. Customer support
g. Pricing of accounting software
1.17 Why is it required to use previous financial data to determine allocations for resources for the next
budget? Explain in 50-100 words.
When distributing resources for the next budget it is usually vital to use the past financial data
mainly because it provides a basis for comparison that guides better decision making. Also, it’s
quite impossible to allocate resources for the next budget with absolutely no idea of the previous
year’s financial details of your firm hence the previous financial data provides some useful
background in planning the next budget. Lastly, the previous financial data enables one to forecast
the future much easily unlike when you absolutely nothing to rely on.
1.18 Assume that a manufacturer determines that its cost of electricity and supplies for the factory are
approximately $10 per machine hour (MH). It also knows that the factory
supervision, depreciation, and other fixed costs are approximately $40,000 per month. Typically,
the production equipment operates between 4,000 and 7,000 hours per month. Based on this
information, what would be the flexible budget for each month?
FLEXIBLE BUDGET
Minimum Maximum Average
4000 7000 5500
Machine Hour 10 40000 70000 55000
BSBFIM601 Assessment Task V24 October 2017 P a g e | 14

ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
Other Fixed Costs 40000 40000 40000
Total budget required monthly 80000 110000 95000
1.19 List any ten (10) basic steps to follow when preparing a budget.
1. Have a strategic plan
2. Layout business goals
3. Project your revenues
4. Have fixed cost projected
5. Have variable cost projected
6. Have annual goal expenses
7. Target profit margin
8. Have board approval
9. Review the budget
10. Deal with budget variances
1.20 List five (5) circulation methods that are used to circulate budgets to managers and supervisors of
the organisations.
1. Emails
2. Printed copies of the budgets
3. Intranet
4. Discussion forums
5. Chat rooms
1.21 Answer the following:
a. What Is Financial Statement Fraud? Write your answer in 30-50 words.
b. How can reconciliation of bank accounts and management review of periodic account
reconciliations (bank reconciliations, petty cash, etc.) and bank statements manage
misappropriation of funds? Write your answer in 50-100 words.
a. Financial statement fraud is a misrepresentation of the financial records of a company
BSBFIM601 Assessment Task V24 October 2017 P a g e | 15

ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
or an organization deliberately by misstatement or omission of some amounts in the
financial records to cheat on financial statement users.
b. Through reconciliation of bank accounts, one is in the position of ensuring that all
payments and receipts are recorded in not only in the bank but also in the ledger. Also,
through the reconciliation of bank accounts, any misuse or misappropriation of public
funds is detected earlier in advance and corrective measures are taken.
1.22 List five (5) basic types of financial statement fraud that you can find when reviewing financial
statements.
1. Fictitious sales
2. Improper expense recognition
3. Incorrect asset valuation
4. Hidden liabilities
5. Unsuitable disclosures
1.23 Explain in 150-200 words, the “Budget Revision Process”.
The budget revision process is a way by which specialises in budget perform some alterations with the
objective of improving the company’s financial position. This process starts with analyzing the budget
to get to know the budget of the business is doing currently. As the analysis goes on, the budget
specialist needs to look for the needs of the business in terms of revenue and expenses to operate
with no risk of having a debt. Secondly, the budget specialists go ahead to identify the troubled areas
in both the side of spending and revenues. For instance, a business will experience a troubled
spending especially when the spending levels supersede the limitations of the budget. In order to get
the identification and the limitations are revised it is possible to follow the third step, which is to
implement and for that, the business owners make changes to the budget by reducing expenditure in
order to use the extra money to pay off any liabilities. Lastly, the budget specialists will monitor and
revise on the changes made to ensure they are being actualized.
1.24 Considering yourself as an Accountant, answer the following questions:
a. What is due diligence? Write your answer in a single sentence.
b. When should you perform due diligence? Write your answer in 30-50 words.
BSBFIM601 Assessment Task V24 October 2017 P a g e | 16

ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
c. What should you review? Write your answer in 30-50 words.
a. Due diligence refers to the examination of a business or a person before signing an
agreement.
b. Due diligence should be performed especially when buying another business to help in
understanding the healthy state of the business’ cash flows, assessing the size of the
products and services of the company and identifying the presence of some main
competitors in the market.
c. When performing a due diligence a number of things will be reviewed. These include
human resources, customers or rather market, commercial, information technology,
competitors and financial books among others.
1.25 Answer the following:
a. What is the benefit of conducting a risk analysis for financial statements item and its accompanying
notes? Write your answer in 30-50 words.
b. Explain in 250-300 words, the four (4) practical steps in conducting a risk analysis.
a. The advantage of performing a risk analysis for financial statements is that it helps to minimize
future losses to the organization by identifying any risks to its financial statements. These risks
include fraud and other forms of cheating on financial records by the members of staff.
b. An effective risk analysis needs to four steps which are Identify Hazards, where mostly a
committee is designed to evaluate the places and situations that could represent potential
incidents and those where the workers can be involved by performing their own activities.
Then, with this analysis, the risk has to be assessed, conducting evaluations about the possible
implications that can mean for a worker being involved in it and the impacts, which can not
just affect the person, also the business and the progress of a project. The third step is to
control the risk, establishing strategies to follow and those that the workers, visitors and any
kind of stakeholder have to follow when is in the workplace to about these hazardous
opportunities and as fourth step, establish risk control by reviewing, every time is occurring
and a person finds in trouble with risks.
BSBFIM601 Assessment Task V24 October 2017 P a g e | 17

ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
1.26 Explain how can planning help the business become viable and profitable? Write your answer in
50-100 words.Planning in any business is very instrumental in assisting an organization in becoming
profitable. It is through the process of planning that the business is in a position to identify areas
of poor performance and corrective action taken. It is also by planning that the goals of the
business are set and strategies are laid down to guide the business into achieving those
particular goals. As a result, through planning the business is able to stay on track hence
remaining profitable.
1.27 How is an organisation's financial performance measured and managed? Write your answer in 50-
100 words.
The financial performance of an organization can be measured by looking at its operating
cash flows, working capital, and current ratio, debt to equity ratio, accounts payable
turnover, accounts receivable turnover, inventory turnover, and return on equity, quick ratio,
and customer satisfaction among others. Increase or decrease in all these aspects signifies as
to whether the organization is performing well or not and gives the management an idea on
how to approach the situation.
BSBFIM601 Assessment Task V24 October 2017 P a g e | 18

ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
Assessment Task 2: Plan for financial management and prepare budgets
and allocate funds
Instructions to the students
In this task you will demonstrate the skills and knowledge on how to analyse previous financial data,
undertake research to review reasons for previous financial results, analyse financial trends and review
statutory requirements and tax liabilities.
Instructions to the Students
This assessment task requires you to determine the requirements to undertake budgeting, financial
forecasting and reporting requirements for an organisation. You will need to read the below given case
study, analyse the information provided and complete the given tasks.
CASE STUDY
Assume that you have been appointed as the Business Manager at Pearl Food Distributors PTY LTD.,
having been a store manager for past three years. It is a 12-store chain located in Victoria and is a
leading food distributor, providing a high-quality distribution service of food ingredients to cater for
cafes, restaurants, pizzerias and manufacturers.
Pearl Food Distributors PTY LTD. has become a customers’ preferred supplier for quality food
ingredients & products.
It has grown over the past five years from a single store to the current chain. It prides itself on quality
food ingredients and their timely delivery. This has been the main reason that the company has seen
stagnant increase in the sales and profits. At present, it employs over 120 staff.
It is a proprietary limited company (ACN 007 249 989) registered with the Australian Securities and
Investment Commission.
Computer software requirement
The current accounting information system used by Pearl Food Distributors has not been able to
provide adequate and sufficient analysis of its revenue and expenditure that has led to difficulties in
making informed estimates of future profits.
The future estimates of the profits that the company can make are not based on the statistical figures
and facts. They are merely predictions of top management. The Board of Directors feel that to have
BSBFIM601 Assessment Task V24 October 2017 P a g e | 19

ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
more realistic figures on the company’s future growth and profit, they need to use an accounting
software that can analyse the past results and trends that took place in previous years. This will not
only help them to identify the future profits but will also help them to expand the business.
So, they have decided to use a new system that can manage the financial information more effectively
and have the capabilities to analyse the data and provide realistic statistics to create budgets and
forecasts to provide the owner and leadership team the ability to measure where the company was at
and where it is headed financially. The senior management team believe that better information will
allow them to prepare for the future, allocate resources more efficiently and improve profit margins.
The senior management wants you to recommend a new system. They have provided you with the
guidelines for selection of the new system. The system must:
 comply with all the legislative requirements.
 calculate all payroll requirements
 prepare information for compliance requirements
 track stock, work in progress, orders, jobs and other task management requirements
 handle multiple bank accounts and automatically imports and processes bank data
 handle foreign currency
 be able to produce separate financial reports for each business or department within the
business
 easily integrate with other systems you are operating such as online payments, point of sale
equipment, customer relationship management records, stock records and payroll software
 keep detailed records on customers, including what they buy, how often they buy and when
they buy produces reports such as ‘dashboard’ reports. Ask whether such reports can be
configured to meet your requirements without impacting maintenance and support
 allow you to manage permissions so that users only have access to the parts of the system that
is relevant to their work
 allow users to securely access data remotely (cloud computing)
 have no ongoing license fees
They are well aware of the fact that checking the software for the requirements will take time. The new
budget is also expected to be projected this month. So, they want this to be done after preparation of
the budget for year the 2018/2019.
BSBFIM601 Assessment Task V24 October 2017 P a g e | 20

ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
2.1. The end of financial year 2017/2018 is approaching near. The decision on new accounting system
is still to be made. However, to get accurate predictions, the CEO of the organisation gathered
information from the company’s accountant and the internal auditor and conducted analysis of the
past outcomes and they want the budgets to be prepared based on this analysed information and the
budget plan summary.
The CEO has provided you the following information from the previous financial year budgets to
review and analyse and establish areas which have generated a profit or loss. You must undertake
research to review the reasons for the previous profit and loss and discuss this with your CEO. (see
attached):
 Business plan summary
 Income statements for year 2016/17 and 2017/18
 Statement of financial position
 Notes from meeting with the accountant
 Budget policies and procedures
Document your analysis and discussions once you have reviewed and analysed the financial data
(Guide: 250 words).
Analysis
It is evident that the sales from one financial year to the next has improved, but also the expenses have
been increased steadily as it is evident in the sales figure where between the Income statements for year
2016/17 and 2017/18 had a 13% more compared with the first evaluated. In order to this progress, the
predictions and expectations for the current financial year are hoping the same situation and that is why
the predictions take into account the numbers and percentages that are going to increase due to the
changes that every financial year has with respect to the previous one.
An important factor which influences the calculations and the figures and it is not possible to control is
the inflation, that determines a notable change in some of the numbers. This impact cannot be controlled
by the organisation due to there are external forces which define what is increasing in order to the index
of each element that works around the inflation.
Other factor that determine the forecast for the next financial year is the normal change of costs such as
rent, salaries, taxes which are changing every year and makes any business to be aware of the predictions
in order to establish a realistic scenario where those expectations do not encourage wrong motivations
about revenues. The analysis always has to be truthful, considering the worst scenario and the how the
business has been going. The success of the predictions always depends on a good management,
BSBFIM601 Assessment Task V24 October 2017 P a g e | 21

ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
maintaining a good team who knows the numbers of the organisation and is aware of keeping the
necessary expenses and collaborate with the other areas in the business to let the company grows.
BSBFIM601 Assessment Task V24 October 2017 P a g e | 22

ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
Business Plan Summary
BSBFIM601 Assessment Task V24 October 2017 P a g e | 23
Business Plan Summary – 2018/2019
1. Sales are expected to grow to 18,000,000 in next financial year.
2. Expenses will be same as previous year. Though, some of the expenses will increase. Some
expenses will increase by direct amount and other expenses will be accounted with the inflation
rate. Information on expenses that will have increase by direct amount is given in meeting notes.
3. Inflation rate for expenses is given below. The expenses that will be impacted by inflation are as
follow: (further information on expenses in given in meeting notes with accountant)
a. Cleaning, repair and maintenance expenses (3%)
b. Electricity (3%)
c. Wages and salaries (10%)
d. Fringe benefit tax (5%)
e. Website and marketing expense (10%)
4. Profits will be built by making a secure customer base. Loyalty cards will be given at the stores.
The total cost to do so will be $12,000 to be included in advertising expenses.

ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
Income statements for year 2016/17 and 2017/18
Pearl food distributors Pty LTD.
For 12 months ended
Profit & Loss Actuals 2016/17 2017/18
Revenue
Sales 12,600,000 14,260,000
– Cost of Goods Sold 5,200,000 6,100,000
Gross Profit 7,400,000 8,160,000
Expenses
– Interest Expense 90,000 88,000
– Depreciation expenses 160,000 160,000
– Insurance expenses 24,000 24,600
– Store Supplies - 4,300
– Advertising 246,000 260,000
– Cleaning, Repairs & Maintenance 82,000 84,000
– Rent 2,500,000 2,750,000
– Website marketing expenses 14,000 16,000
– Electricity Expense 30,000 32,000
– Fringe Benefits Tax 34,000 38,000
– Wages & Salaries 2,200,000 2,400,000
– Superannuation 209,000 228,000
BSBFIM601 Assessment Task V24 October 2017 P a g e | 24

ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
– Workers’ Compensation 44,000 48,000
Total Expenses 5,633,000 6,132,900
Net Profit (Before Tax) 1,767,000 2,027,100
Income Tax 530,100 608,130
Net Profit 1,236,900 1,418,970
Statement of financial position
Pearl food distributors Pty LTD.
Statement of Financial Position
As at 30 June 2016/17 2017/18
Assets
Current Assets
– Cash on Hand 90,000 98,000
– Cheque Account 180,000 220,000
– Deposits Paid 1,200,000 1,200,000
– Trade Debtors
– Merchandise Inventory 1,600,000 1,720,000
Total Current Assets 4,185,000 4,468,000
Fixed Assets
– Cost of motor vehicle 600,000 600,000
– Accumulated Dep (120,000) (120,000)
– Cost of Furniture & Fixtures 2,400,000 2,600,000
– Furniture & Fixtures Accumulated Dep (720,000) (780,000)
BSBFIM601 Assessment Task V24 October 2017 P a g e | 25

ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
– Cost of Office Equip 500,000 500,000
– Office Equip Accumulated Dep (100,000) (120,000)
Total Fixed Assets 2,560,000 2,680,000
Total Assets 6,745,000 7,148,000
Liabilities
Current Liabilities
– Credit card 32,000 36,000
– Trade Creditors 700,000 730,000
– GST Collected 1,260,000 1,426,000
– GST Paid (840,000) (890,000)
– Superannuation Payable 209,000 228,000
– income Tax Payable 530,100 608,130
Total Current Liabilities 1,891,100 2,138,130
Long-Term Liabilities -
– Bank Loans 1,800,000 1,600,000
Total Liabilities 3,691,100 3,738,130
Equity
– Owner/Shareholder’s Equity 700,000 700,000
– Retained Earnings 1,000,000 1,200,000
– Dividends Paid (397,100) (497,230)
– Current Year Earnings 1,767,000 2,027,100
Total Equity 3,053,900 3,409,870
BSBFIM601 Assessment Task V24 October 2017 P a g e | 26

ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
Notes provided by the CEO:
Notes from meeting with Accountant:
 Sales target for the year 2018/2019 set in business plan are 18,000,000. The
proportion expected from the analysis of previous study for each quarter is as follow:
Quarter 1: 22%
Quarter 2: 30%
Quarter 3: 21%
Quarter 4: 27%
 All the expenses other that the “Rent expenses and interest expense” will be incurred
in the same proportion. Rent and interest will be paid in equal amount in each
quarter.
 Rent expense will increase by 10% this year.
 Interest expense for the current year will decrease by the amount of $6,000.
 A new expense is to be included in the new budget that will be under the name of
cleaning labour charges. 60% of the amount from cleaning expenses will be included
in this expense. Only 40% will be accounted in cleaning expense.
 Depreciation will be same as previous years.
 Expected increase in expenses: (inflation rate given in business plan summary)
o Cleaning expenses
o Repair and maintenance
o Electricity
o Wages and salaries
 Statutory requirements
o Superannuation: 9.5%
o Company tax: 30%.
BSBFIM601 Assessment Task V24 October 2017 P a g e | 27

ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
o Workers compensation: 2%
 Based on the analysis of historical data, it is expected that the debtors balance at the
end of each quarter is expected to be 15% of the sales made. Furthermore, it is
expected that 1% of debtor balance will be overdue for 90 days, 4% overdue for 60
days and 10% for 30 days.
For GST cash flow budget:
 Statutory requirements: 10% of recorded sales. No capital purchase is recorded for
this year. Though the expenses where the GST will be paid include.
o Insurance expense
o Cleaning expense
o Advertising expense
o Rent expense
o Cleaning, Repairs & Maintenance
o Electricity expense
o Website marketing expense
 GST cash flow is to be maintained to maintain audit trial. This will ensure that there
are discrepancies between agreed and actual allocations for cash flow analysis for
GST are identified.
Pearl food distributors Budgeting Policy and Procedures
Budget Development Process
The standard process for developing budgets will follow the following steps:
1. Identify budget objectives
2. Gather previous years financial data.
3. Gather anticipated changes in budget from the stakeholders.
4. Incorporate identified trends.
5. Develop budget based on the formats provided in MS excel.
6. Final approval.
Budget Objectives
BSBFIM601 Assessment Task V24 October 2017 P a g e | 28

ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
Pearl food distributors prepares budgets to meet various company objectives. Budgets are
prepared:
● To have more realistic figures on the company’s future growth and profit.
● To predict cash flow.
● To comply with the statutory and legislative requirements.
● To allocate funds.
● To have birds eye view on the trade debtors.
Budget Variances and Schedules
● KPI’s that should be monitored:
○ Variance in sales
○ Variance in gross profit
○ Variance in total expenses as percentage of sale
● Budget variance is to be calculated for each quarter. It should be completed within the
last week of the quarter.
● Reports on variance is to be provided to the CEO of the organisation.
● Priorities in investigation of the variances”
○ Identifying the primary cause of the variance.
○ Identify the reasons that led to this cause.
● Accountant has the responsibility to manage compliance due dates.
BSBFIM601 Assessment Task V24 October 2017 P a g e | 29

ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
2.2. The CEO now would like you to prepare the following budgets for 2018/19 financial year:
a) Sales and profit budget
b) GST Cash flow budget
c) Debtor ageing summary
The budgets must be prepared on quarterly basis. When preparing the budgets, you must ensure that
you must:
 Conduct a detailed analysis on previous financial data to identify different quarters of the
financial-year that have generated a profit or loss and to accurately determine the allocation
of resources for each quarter of budget.
 Ensure that you critically review the ‘Business plan summary’ given in the case study to
establish critical dates of the transactions and allocate the same in the budget for next
financial-year.
 Make informed estimates of new items given in ‘Business plan summary’ for inclusion in
budget
 Review statutory requirements given in the case study to prepare a budget that is compliant
and correctly documents the company’s liabilities for tax.
The following formats will be used when preparing Pearl food distributors budgets. You must create
similar templates in MS-Excel to prepare budgets and attach the budgets to this task for review by
your assessor.
Sales and Profit Budgets:
QUARTERLY STATEMENT OF THE INCOME
Pearl food distributors Pty LTD.
Income Statement Q1 Q2 Q3 Q4
Revenue 22% 30% 21% 27%
Sales 1800000
0 3960000 5400000 3780000 4860000
Cost of Goods Sold
8709580
1916107.
6
2612874 1829011.8 2351586.6
BSBFIM601 Assessment Task V24 October 2017 P a g e | 30

ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
Gross Profit
9290420
2043892.
4 2787126 1950988.2 2508413.4
Expenses
Interest Expense 82000 20500 20500 20500 20500
Depreciation expenses
160000 35200 48000 33600 43200
Insurance expenses 24600 5412 7380 5166 6642
Store Supplies 4300 946 1290 903 1161
Advertising 272000 59840 81600 57120 73440
Cleaning, Repairs &
Maintenance 33600 7392 10080 7056 9072
Cleaning and Labour charges
50400 11088 15120 10584 13608
Rent 3025000 756250 756250 756250 756250
Website marketing expenses
17600 3872 5280 3696 4752
Electricity Expense 32960 7251.2 2175.36 456.8256 123.342912
Fringe Benefits Tax 39900 8778 11970 8379 10773
Wages & Salaries 2640000 580800 792000 554400 712800
Superannuation 228000 50160 68400 47880 61560
Workers’ Compensation
48000 10560 14400 10080 12960
Total Expenses
6658360
1558049.
2
1834445.3
6
1516070.82
6
1726841.34
3
Net Profit (Before Tax)
2632060 579053.2 789618 552732.6 710656.2
Income Tax
789618
173715.9
6 236885.4 165819.78 213196.86
Net Profit
1842442
405337.2
4 552732.6 386912.82 497459.34
BSBFIM601 Assessment Task V24 October 2017 P a g e | 31

ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
GST Cash Flow Budget
GST Cash Flow Statement 2018/19
Gst Collected 18000000 1800000
Gst Paid
Insurance expense
24600 2460
Cleaning expense 50400 5040
Advertising expense
272000 27200
Rent expense 3025000 302500
Cleaning, Repairs &
Maintenance 33600 3360
Electricity expense
32960 3296
Website marketing expense 17600 1760
Gst Paid 345616
GST Payable 1454384
Aged Debtors
AGED
DEBTORS
BUDGET
TOTAL Qtr. 1 Qtr. 2 Qtr. 3 Qtr. 4
Total
Debtors
$1,80,00,000
.00
$39,60,000.
00
$54,00,000.
00
$37,80,000
.00
$48,60,000
.00
Current $1,80,00,000
.00
$27,00,000.
00
$8,10,000.0
0
$5,67,000.
00
$7,29,000.
00
30 Days $18,00,000.0 $2,70,000.0 $81,000.00 $56,700.00 $72,900.00
BSBFIM601 Assessment Task V24 October 2017 P a g e | 32

ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
0 0
60 Days $7,20,000.00 $1,08,000.0
0 $32,400.00 $22,680.00 $29,160.00
90 Days $1,80,000.00 $27,000.00 $8,100.00 $5,670.00 $7,290.00
BSBFIM601 Assessment Task V24 October 2017 P a g e | 33

ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
ASSESSMENT TASK 3: PRESENTATION
Instructions to the student
In this assessment task you will be required to demonstrate your ability to present and interact with
other stakeholders such as CEO, senior managers and supervisors. Your assessor will observe your ability
to interact and demonstrate your ability to present to a group. In this assessment task:
 Your role will be to act as Business manager.
 Your trainer will act as Chris (CEO of the business)
 Your trainer/assessor will allocate the role of Senior managers and Supervisors (2 each) to
the students present in the classroom. If there are insufficient number of students in the class,
then, your trainer/assessor will take on multiple role switching roles based on the task
requirements.
 You will first document the budgetary notes and distribute it to the senior managers and
supervisors.
 You will then deliver a presentation on the budgets prepared in part 1 of this assessment task.
 At last, you will engage in discussion with the stakeholders (Senior Managers, Supervisors
and CEO) to address their issues.
3.1. Read the scenario below and complete the activity.
SCENARIO
You have successfully prepared the budget for the financial year 2018/2019. As per the company’s
procedures, the budget must be approved by the stakeholders before its implementation.
So, the CEO of Pearl food distributors Pty LTD “Jeff Hardy” has called a meeting with you, senior
managers and the supervisors. The CEO also provided you with the information that he wants to
discuss the best option for the new accounting system based on the company guidelines of selecting
the accounting software (provided in the case study) in this meeting.
The CEO of the organisation has asked you to prepare and deliver a presentation to provide an
overview of the information contained within the budget. Before delivering the presentation, he
wants you to prepare key notes from the budget and disseminate them to the stakeholders (Senior
Manager, Supervisors and CEO of the company).
The key points that the notes must include are as follow:
 Major reasons for the previous profits and losses.
BSBFIM601 Assessment Task V24 October 2017 P a g e | 34

ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
 Assumptions made within the budget.
 Notes to implement and monitor the budget expenditure on regular basis.
Attach the notes to the task. (Guide: 250 – 300 words).
The predictions for the financial year 2018-2019 follow the same patrol of the last financial years,
where have been many changes, increased expenses but with more incomes. From the last meeting
the stakeholders showed confidence and ambition to get more revenues, based on the fact that the
finances and its management in the organization are working according to the expectations and there
are not thoughts about this is close to change if the procedures and methods remain for this period as
well.
The budget depended more on index such as inflation rate, some changes in percentages which are
influences for factors regardless the own management on the organization and the calculations have
to take them into account to give an accurate definition of them and can work over expectations that
can be met and easy to understand. Internal factors also are considered in this, for example the
participation of the areas which interact with clients due to they are those who allow get those
figures. From finance area, there must be an encouragement on those activities, making clear the
expectations and the waited budget to work for these objectives and considering that it is better to
keep close those numbers.
The budget was developed through quarter analysis which allows to know the progress of sales and
loss easily by reviewing these figures according to the expected. By monitoring will be easy to control
the progress of the finance and take actions when it is necessary. But this requires the participation of
everyone in the financial management as well as the managers.
3.2. After distributing the budget notes to the stakeholders (Senior Managers, Supervisors and CEO),
he wants you to prepare a presentation that must include the following:
 Overview of the following budgets:
o sales and profit budget
o GST cash flow budget
o debtor ageing summary
Note: You must use Microsoft PowerPoint to deliver your presentation. You can use screenshots of
budgets you prepared in the spreadsheets in your presentation.
 Reporting requirements for each quarter.
BSBFIM601 Assessment Task V24 October 2017 P a g e | 35

ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
 Financial delegations of Senior managers, store managers and supervisor for budget
implementation.
 Reasons for previous profit and loss for each quarter.
(Guide: Approx. 8 – 10 slides).
3.3. After the completion of the presentation, you will be required to address the concerns of the
stakeholder’s present during the meeting and address the questions and concerns of the Senior
managers.
The following questions are to be discussed with the stakeholders (Senior Managers, Supervisors and
CEO). You must document the discussions and feedback from the stakeholders in the space below.
a) Senior Manager 1:
What are the current statutory requirements for tax compliance? (150 – 180 words).
According to the meeting between the CEO and the accountant, the agreed statutory
requirements are the 10% if the record sales. Additionally, for this year capital purchase will not
recorded. Besides, for the GST paid, will be include expenses such as insurance, cleaning,
advertising, rent, electricity, website marketing as well as cleaning, repairs and maintenance.
In that order the budget has to consider these elements to develop the forecast of the assessed
financial year and it is compromise of the whole team to keep these elements as they are
predicted. Moreover, this tax compliance always has to estimate accurately to know from the
beginning which part of the capital has to be kept to pay when it is requested.
b) Senior manager 2:
Which is the most suitable commercially available financial-management accounting software for
Pearl food distributors Pty LTD and explain why? (Guide: 350 – 400 words).
Nowadays there are plenty of choices about financial management accounting software in the
market. Depends on the activity of the business is possible to get the right one to fit it in the
company and allow to manage the finances and all the related around it. Pearl food distributors
Pty LTD based its activity us provider of goods, like food is to many clients and based on this fact,
BSBFIM601 Assessment Task V24 October 2017 P a g e | 36

ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
the chosen software has to fulfil the requirements to process this kind of information, record
correctly figures and make predictions based on the data.
According to websites such as softwareadvice.com where users review the software related to
certain activity, its features, compatibility, price and the size of the business, there are two
software in particular that can be suitable to the organisation. The first one is Microsoft Dynamics
CRM which can be integrated with other applications such as MS Word or MS Excel and develop
of the control of finances through there. This in particular is suitable for medium-small sized
companies and all the platforms. It is recommended for 73% of the surveyed people and ranked
with 4 stars. The second well-ranked software and more completed as the Microsoft option is E2
Shop System, which has lot of options to manage the finances of the company and assess the
activity through charts and records that any accountant will be able to understand. This is also for
medium-small sized companies and just compatible with Windows OS, even though it is more
recommended as the previous one.
The decision would be made for the second options due to is more complete and offer the
possibility to evaluate the financial activity of the organisation easy and by monitoring, the
records also will be helpful to understand progress and take actions straightaway they are
detected.
c) Supervisor 1:
What are the implications of probity in preparation and revision of budgets? (Guide: 150 words).
Good practices are always expected and asked from workers and the ones who get involved in
process where elements such as money are involved too. In areas as, financial management the
personal must show integrity with professionalism and experience to avoid take advantage of
their position also to help the company achieve the objectives.
For that, probity has to be applied with other skills like accuracy to work on budget, always
know every single detail of the numbers used, the calculations and doing all the activity with
careful because any wrong number or sign can change the whole analysis.
Probity is in this case so important and people working in the finances have to develop it and
show it to their team to display themselves as confident personal.
d) Supervisor 1:
What are the critical dates and initiatives that will require or generate resources for Pearl food
distributors Pty LTD. in the next financial cycle? (Guide: 100 words)
The second and fourth quarter are important in the next financial year, due to it indexes, 30% and
27% respectively, are higher than the other, meaning that these months the work will be
receiving more clients, requests and money and all the areas have to be involved in keep the
BSBFIM601 Assessment Task V24 October 2017 P a g e | 37

ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
company passing through this, making it strong by well management. The work in these two
periods of time has to get intensified and the workers have to sow their commitment to the
company to overcome the requirements.
e) Supervisor 2:
What other items do you think should be included in the budgets for the company? (100 words)
Even though the budget has showed the enough data to consider, making it accurate in the view
that it was expected, perhaps it would be necessary to include kind of small expenses such as
office resources, also unforeseen budget for unexpected situations would be important to be
included.
However, the important thing about budgeting is to include just the important points to consider
within the financial year which is going to be assessed, to evaluate according to the way that is
determined, the progress.
f) Supervisor 2:
What internal controls should be implemented to improve risk management for maintaining
audit trials? (Guide: 100 - 150 words)
If there is a possibility to implement a financial management software, it could allow to control
more accurately this area of the business, by monitoring and helping the audit trials to be more
fluent, due to it is easier to get the data about the progress of the finances through these tools.
As the budget was, this financial year is going to be determined by quarters, so assuming the
proper analysis for each quarter, control can be performed correctly and is possible to keep the
risk watched and give adequate time to establish contingency plans to treat the risk if it is
occurring.
ASSESSOR’S OBSERVATION CHECKLIST
Did the student demonstrate the following Yes No
Implemented statutory requirements for tax law compliance in the budget.  
BSBFIM601 Assessment Task V24 October 2017 P a g e | 38

ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
Recommend commercially available software.  
Discussed the following implications of financial probity:  
Outlined the following critical dates/initiatives that will require or generate
resources.  
Made informed estimates of new items for inclusion in budget:  
Appropriately recommend new or modified internal controls that could
improve risk management for maintaining audit trails.  
Developed an annual budget.  
Presented overview of the budget and responded to questions present by
Senior managers.  
Demonstrated ability to explain financial decisions and outcomes clearly and
used listening and questioning techniques to exchange information and obtain
agreement
 
Reviewed and analsysed numerical data and demonstrated ability to compare
and contrast complex numerical data to analyse and evaluate financial position
and processes
 
Selected and used appropriate conventions and protocols when presenting and
communicating with supervisors and manner to share information and seek
agreement.
 
Assessor feedback:
Signature: Date:
BSBFIM601 Assessment Task V24 October 2017 P a g e | 39

ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
Assessment Task 4: Establish budgets & allocate funds
Instructions to the students
In this task you are required to determine allocations for resources, make estimates of new items for the
budget and prepare a budget in accordance with organisational requirements and statutory
requirements. This task is in continuation with the previous task. In this task, you will monitor the
implementation of the budget that you have prepared in assessment task 2.
This task is divided into two parts:
 Part A requires you to prepare budget variance report.
 Part B requires you to prepare a report on effectiveness of existing financial-management
approaches.
CASE STUDY
After end of the first quarter of the financial year, Jeff Hardy, the CEO of the company called up a
meeting to discuss the analysis report provided to him by the accountant of the organisation.
This analysis report includes the outcomes of the actual budget analysis for the first quarter budget.
The outcomes of the analysis report outcomes are not as expected. Following are some of the vital
outcomes:
 Sales are 3% less than budgeted.
 Gross profits have been impacted as the expenses are same, but sales have gone down.
 The company had most part of their loan on variable interest rates. The interest rates have
increase and that has impacted the interest expenses. The interest expense for this quarter is
increase by $4500.
 2% of debtor balance will be overdue for 90 days, 6% overdue for Va60 days and 13% for 30
days.
 To maintain the sales, the stores had to further give discounts of 5% on each item. That has
impacted the budget.
You had discussion with the CEO. You both have agreed that this is largely due to the following
reasons:
 The economy overall is is in recession that is impacting the sales in the retail sector.
 The first quarter is generally impacted by the factors relating to public and school holidays.
The CEO is also concerned about the outcomes of the audit trial conducted by one of the internal
BSBFIM601 Assessment Task V24 October 2017 P a g e | 40

ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
auditors. Some of the outcomes are as follow:
 Cash record books not maintained properly.
 Some of the times the company books and third-party bank statements were not reconciled
appropriately.
4.1. Considering the outcomes of the analysis report, the CEO of the company wants you to prepare
budget variance report to manage risks that may occur in the organisation in case of
misappropriation of the funds.
This is also to be done to maintain audit trials for accurate tracking and identification of
discrepancies between agreed and actual allocations.
To do so, you are required to:
a) Prepare the actual budget based on the outcomes of the analysis report.
b) Compare the outcomes of the actual budget with the outcomes of the allocated budget (refer to
the assessment task 2).
c) Prepare budget variance report, GST, Cash Flow Budget variance report and debtor ageing
variance report in MS excel by following the structure of templates provided.
d) Ensure compliance with due diligence.
e) Circulate it to all the stakeholders to ensure mangers and supervisor are clear about budgets,
reporting requirements and financial delegations.
You must make sure that when conducting audit trial, you comply with due diligence in reviewing
financial statements.
BSBFIM601 Assessment Task V24 October 2017 P a g e | 41

ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
Sales and Profit Budgets variance report:
Actual Variance
13832200 41,67,800
8662000 47,580
691610 -6,91,610
58,61,810 34,28,610
-
-
2,60,000 12,000
84,000 -50,400
50,400
1,60,000 -
32,000 960
38,000 1,900
24,600 -
92,500 -10,500
27,50,000 2,75,000
4,300 -
2,28,000 21,660
24,00,000 2,40,000
16,000 1,600
48,000 960
-
61,32,900 5,48,080
20,27,100 5,82,340
6,08,130 1,74,702
14,18,970 4,07,638
BSBFIM601 Assessment Task V24 October 2017 P a g e | 42

ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
GST Cash Flow Budget variance report:
GST Cash Flow Statement Budgeted Actual
Gst Collected 18000000 1800000 1426000
Gst Paid
Insurance expense
24600 2460
Cleaning expense 50400 5040
Advertising expense
272000 27200
Rent expense 3025000 302500
Cleaning, Repairs &
Maintenance 33600 3360
Electricity expense
32960 3296
Website marketing expense 17600 1760
Gst Paid 345616 890000
GST Payable 1454384 536000
Aged Debtors variance report:
4.2. After preparing the budget variance report, the CEO of the organisation wants you to analyse and
prepare a report on effectiveness of existing financial-management approaches.
To do so, you are required to:
a) Analyse and review budget variance report, GST Cash Flow Budget variance report and
debtor ageing variance report:
BSBFIM601 Assessment Task V24 October 2017 P a g e | 43

ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
The budget variance report showcases major difference between the amount of sales,
interest expense, wages and salaries. The amount of rent has also been increased. Moreover
the main reason behind the increase is the inflation and the same has been reported in the
budget report. The GST cash flow resulted in altogether a different scenario. In the current
year the company has a GST payable amount if $1454384 and it have increased drastically
from the previous year. The debtors aging variance report shows the difference and the
major variance is because of the increase in sales and the increase in the number of the days
for which the debtors were given leverage for. To solve the issues the debtors shall be
minimised and the dealings shall be done in cash
b) Analyse the “Sales and Profit Budgets variance report”, identify and prioritise the significant
issues, including the financial performance.
 Identify variances.
The variances are majorly in all expenses except the interest expense and the
cleaning repairs and maintenance.
 Provide reasons for the variance.
The reason is that a new account has been created for the cleaning labour charges.
The interest expense has been reduced as the loan has been paid off.
Steps
The steps that can be taken are to remove the extra space and rent it to settle down the
increase in the rent. The operating costs shall be reduced and more turnovers shall be
generated to compensate for the salaries as an expense.
c) Conduct cash flow analysis to identify the debtor days. The analysis is to be conducted based
on the information provided in the assessment task 2.
BSBFIM601 Assessment Task V24 October 2017 P a g e | 44

ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
AGED DEBTORS
BUDGET
ALLOCATED ACTUAL VARIANCE
Sales 3960000 3137200 822800
% Debtors Sales 594000 470580 123420
Total Debtors 594000 470580 123420
Current 594000 470580 123420
30 Days 59400 9411.6 49988.4
60 Days 23760 28234.8 -4474.8
90 Days 5940 61175.4 -55235.4
d) Check the financial viability of the company by comparing the performance of the company
with the industry benchmarks for retail trade sector.
The financial viability of the company against the benchmarks have been sound with an
exception of two three expenses which have been discussed above. The budgeted viability
is fancier than the actual one. The expenses have been affected due to the economy failure.
Also majorly in the first quarter the public holidays played a major role. The loan rates are
more variable and the therefore the interest expense majorly increased from 88000 to
92500. The amount of the debtor balance also changes since the number of debtors due for
more than 90 days are in a difference by 55235.
e) Present recommendations about the financial viability for the organisation based on the
analysis of the issues given in the case study, the identified reasons and the organisational
performance.
BSBFIM601 Assessment Task V24 October 2017 P a g e | 45

ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
In terms of the financial viability the company is sound and in terms of the overall profit
the budgeted profit is more than the actual profit. Moreover the company should not have
offered discount in extra and the operating costs shall also be decreased. The interest
expenses when calculated actual have increased in comparison to the budgeted amount
from 82000 to 92500. The economy is facing recession and therefore the major impact on
the expenses is because of the same. The company shall hold the position till the recession
ends and thereafter implement the strategies and the internal control to measure the
variance.
f) Revise budget and include included the revised budget in your report and provide
recommendation to manage such contingencies in the future.
Pearl food distributors Pty LTD.
Income Statement
2016-17 2017-18 2018-19 Actual Variance
Revenue
Sales 1,26,00,000 1,42,60,000 1,80,00,000 13832200 41,67,800
Cost of Goods Sold 52,00,000 61,00,000 87,09,580 8662000 47,580
691610 -6,91,610
Gross Profit 74,00,000 81,60,000 92,90,420 58,61,810 34,28,610
-
Expenses -
Advertising 2,46,000 2,60,000 2,72,000 2,60,000 12,000
Cleaning, Repairs & Maintenance
82,000 84,000 33600
84,000 -50,400
Cleaning Labour Charge
- - 50400
50,400
BSBFIM601 Assessment Task V24 October 2017 P a g e | 46

ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
Depreciation expenses 1,60,000 1,60,000 1,60,000 1,60,000 -
Electricity Expense 30,000 32,000 32960 32,000 960
Fringe Benefits Tax 34,000 38,000 39900 38,000 1,900
Insurance expenses 24,000 24,600 24,600 24,600 -
Interest Expense 90,000 88,000 82,000 92,500 -10,500
Rent 25,00,000 27,50,000 3025000 27,50,000 2,75,000
Store Supplies - 4,300 4,300 4,300 -
Superannuation 2,09,000 2,28,000 2,49,660 2,28,000 21,660
Wages & Salaries 22,00,000 24,00,000 2640000 24,00,000 2,40,000
Website marketing expenses
14,000 16,000 17600
16,000 1,600
Workers’ Compensation
44,000 48,000 48,960
48,000 960
-
Total Expenses 56,33,000 61,32,900 66,80,980 61,32,900 5,48,080
Net Profit (Before Tax) 17,67,000 20,27,100 26,09,440 20,27,100 5,82,340
Income Tax 5,30,100 6,08,130 7,82,832 6,08,130 1,74,702
Net Profit 12,36,900 14,18,970 18,26,608 14,18,970 4,07,638
g) Review the financial management process based on your assessment of the issues, reasons
and organisational performance. Also provide recommendations for improvement in
improving financial management processes such as audit trails.
The internal control shall be implemented and based on the assessment and the rectification
of the issues it is recommended to the management to follow the audit process on the
quarterly basis and keep a check on the debtors and the variable expenses more.
BSBFIM601 Assessment Task V24 October 2017 P a g e | 47

ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
Apart from this the risk management committee shall be set up to fight against the risks of
such nature and the audit trails shall be conducted randomly to find out the variance and so
that the major path can be covered and crossed.
h) Identify and document some of the risks that the company can face in future based on the
outcomes of the audit trial conducted. Also identify the risk of misappropriation of funds and
document a risk management approach.
The risks the company can find out are the financial risk, reputational risk, business risk,
strategic risk as well as the compliance risk. Based on the outcomes of the audit trial the
successful business needs a comprehensive business plan and the business needs to comply
with the rules and the regulations and laws that are associated with the nature of the
business. Moreover the goodwill helps in increase of the business and the same gets
affected if the business falls into losses or when the loan is pending in high amount or the
amount of debtors which are due for more than 30 days are increasing more which will
ultimately affect the cash cycle of the business.
i) Ensure compliance with due diligence.
The theory behind the due diligence is involved in the process of the investigation and it
majorly contributes in the decision making of the company. The information is available
and the main purpose of this step is to ensure that the information is utilised in the positive
BSBFIM601 Assessment Task V24 October 2017 P a g e | 48

ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
manner. The process of the due diligence shall not extend to more than 60 days and the
letter of intent shall to be issued with the longer time frame.
Once you have conducted the above tasks, you are required to prepare a report addressing the
above in you report. You must ensure that the structure and format of you report are clear and
conform to the organisational and statutory requirements and include figures, charts, graphs and
submit the report your assessor who will act as the CEO to get it signed off. (Guide: 1000 words)
Report on the effectiveness of existing financial-management approaches/finances
 Issues
 Steps to resolve these issues
 Variances
 Reason for variances
 Steps to maintain gross profit margins
 Debtor days
 Financial viability of the company
 Your recommendations on the viability of the company
 Your recommendations for managing contingencies
 Recommendations for improvement in improving financial management processes.
 Risks that company can face in future based on the outcomes audit trial
 Risk of misappropriation of funds
 Risk management approach
 Compliance with due diligence
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ASSESSMENT TASKS
Qualification: BSB61015 Advanced Diploma of leadership and management
Cluster number and name: LMAD 4.2 Manage finances
Units of competency: BSBFIM601 Manage Finances
Student’s ID: Arturo Gonzalez 42999
Assessor’s name: Zsolt
Number of weeks for this cluster: 5 weeks
ASSESSOR’S OBSERVATION CHECKLIST
Did the student demonstrate the ability to: Satisfactory
Completed actual-to-budget variance report according to organisational
requirements  Yes  No
Completed debtor ageing ratio for required periods  Yes  No
Provided responses for issues that reflected in the case study.  Yes  No
Documented the steps to resolve complex issues.  Yes  No
Identify variances and discussed reasons for variance  Yes  No
Document the steps that should be taken to maintain gross profit margins after
increasing expenses and downturn in the amount of sales.  Yes  No
Debtors days identified were correct  Yes  No
Present recommendations about the financial viability for the organization  Yes  No
Provided recommendation to manage such contingencies in the future.  Yes  No
Provided recommendations for improvement in improving financial management
processes  Yes  No
Identified the risk of misappropriation of funds and document a risk management approach.  Yes  No
Develops and records information which incorporates a detailed analysis of factual
and forecasted information  Yes  No
Prepares documents using format, content and layout appropriate to audience,
purpose and regulatory requirements  Yes  No
Explains financial decisions and outcomes clearly and uses listening and
questioning techniques to exchange information and obtain agreement  Yes  No
Reviews and analyses numerical data embedded in organisational documentation
and legislation  Yes  No
Compares and contrasts complex numerical data to analyse and evaluate financial
position and processes.  Yes  No
Uses appropriate formulae to analyse financial data to assess and manage risk and
identify discrepancies  Yes  No
Recognises, understands and adheres to legislative and organisational
requirements in undertaking own work  Yes  No
Selects and uses appropriate conventions and protocols when communicating with
supervisors and managers to share information or seek agreement  Yes  No
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