Diploma of Leadership Assessment Report 2022

ADVANCE DIPLOMA OF LEADERSHIP 1
Student declaration:
To be filled out and submitted with responses
 I declare that this task is all my own work and I have not cheated or plagiarised the
work or colluded with any other student(s)
 I understand that if I am found to have plagiarised, cheated or colluded, action will be
taken according to process explained to me
 I have correctly referenced all resources and reference texts throughout these
assessment tasks
 I understand the rights to re-assessment
 I understand the right to appeal the decisions made in the assessment

ADVANCE DIPLOMA OF LEADERSHIP 2
Contents
Purpose of the report:.................................................................................................................3
Task 2:........................................................................................................................................3
Financial analysis:..................................................................................................................3
Review:...................................................................................................................................3
Significant movements in profit and loss:..............................................................................8
Significant movements in cash flows:..................................................................................15
Recommendations for improvements:..................................................................................16
Review of business plan:..........................................................................................................16
Benefits of changing accounting system from MYOB to XERO:...........................................18
Profit and sales budget:.........................................................................................................19
References:..............................................................................................................................24

ADVANCE DIPLOMA OF LEADERSHIP 3
Purpose of the report:
The main purpose of this report is to analyse the variances between the actual and the budget
data and figures, implement the budgets. Further, this report talks about the various rules and
regulations that each company has to follow and meet when it comes to conducting the
business operations.
Task 2:
Financial analysis:
Review:
The following table shows the calculated ratios:
(Amounts in $)
Particulars 2016 2017
Profitability ratios:
Gross profit margin: 68.87% 68.57%
Gross profit
68,73,420.0
0
79,63,600.0
0
Net sales
99,80,100.0
0
116,13,600.0
0

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Net profit margin: 5.45% 3.15%
Net profit
5,44,055.0
0
3,65,361.0
0
Net sales
99,80,100.0
0
116,13,600.0
0
Solvency ratio:
Debt ratio: 0.114536823 0.03350526
Debt
3,00,000.0
0
1,00,000.0
0
Equity
26,19,245.0
0
29,84,606.0
0
Short term liquidity:
Current ratio: 3.714793145 4.473696011
Current Assets
23,23,826.0
0
27,53,627.0
0

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Current Liabilities
6,25,560.0
0
6,15,515.0
0
Working capital ratio:
16,98,266.0
0
21,38,112.0
0
Current Assets
23,23,826.0
0
27,53,627.0
0
Current Liabilities
6,25,560.0
0
6,15,515.0
0
Total assets turnover ratio: 0.153479528 0.098742987
Net profit
5,44,055.0
0
3,65,361.0
0
Total assets
35,44,805.0
0
37,00,121.0
0
Profitability:
The gross profit has decreased due to the reason that there has been an increase in the amount
of the gross profit but a corresponding low increase in the amount of the net sales.
The net profit has decreased due to the reason that there has been a decrease in the amount of
the net profit but a corresponding low increase in the amount of the net sales.

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Solvency:
Debt ratio shows the riskiness that the company is exposed to. This ratio has reduced due to
the reason that the company has repaid the amounts that it had borrowed from outside and got
more equity capital into the business. The low ratio is not good since it means an increased
risk for the company.
Short term liquidity:
The current ratio has improved which is good since it shows an increased capability of the
company to meet its short term financial obligations.
The working capital of the company has increased which is gain not good for the company
since it merely means that the company has more cash blocked in its business operations.
Activity:
The total asset turnover ratio has decreased due to decrease in the net profit of the company
and increase in the assets employed into the business of the company. This is again not good
since it shows that the company is not utilising its business assets in the most efficient and
effective way.
The ratio analysis is a quantitative analysis of the data which is used in the calculations so
that the stakeholders could get enough information in this regard. These are the calculations
that are done for some multiple perspectives with regard to the working and the financial
performance such as liquidity, turnover, solvency and the profitability.
It is the method of analysing and comparing the financials by the way of computing the
financial statement value percentages instead of comparing each line item from the financial
statements.
The following are the advantages of using the ratios analysis:

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 The financials are simplified
 It assist in comparing the companies that are of different sizes
 It helps in understanding the trend analysis when it incorporates the comparison
between the single company over the period of time
 With the help of it, the company is able to gather some major data immediately. The
user could decide whether to invest into the company or not merely by looking at the
figures that have been calculated. He could understand the complete financials of the
company ("Ratio Analysis: Meaning, Advantages and Limitations | Accounting",
2019).
The following are the disadvantages of using ratios:
 The financials become very complicated ("Advantages and Disadvantages of Ratio
Analysis - What is Ratio Analysis?", 2019).
 There is work in many companies that exists in the enterprises which possess the
different environmental position such as the market structure etc. these are the factors
that affects the comparison which exists between the 2 organisations from the
different industries
 This financial accounting data is comprised of the views and the hypothesis. The
accounting criteria provides some different methods of accounting which goes on to
reduce the comparability and hence, the ratio analysis become less helpful when it
comes to the circumstances like these
 The calculations helps in the association between the prior date when are users of
these financials are more concerned about the current and the future data ("Ratio
Analysis: Meaning, Objectives, Advantages, Limitations & Examples", 2019)

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Significant movements in profit and loss:
The following table shows the relevant changes:
(Amounts in $)
Particulars 2016 2017
Change in
$
Change in
%
Reason
for
change
Sales 99,80,100
.00
116,13,600.
00
16,33,500.
00
16.37% the
increase
in the
sale
could
be due
to the
increase
in the
selling
price of
the
goods
or
increase
in the
volume
of the

ADVANCE DIPLOMA OF LEADERSHIP 9
goods
sold
Less: cost of goods
sold
31,06,680
.00
36,50,000.
00
5,43,320.
00 17.49%
the
increase
is due
to the
increase
in the
sale
which
is
alright
because
when
the
sales
increase
s, the
cost of
goods
sold
will
also
increase

ADVANCE DIPLOMA OF LEADERSHIP 10
-
Gross profit
68,73,420
.00
79,63,600.
00
10,90,180.
00 15.86%
the
change
is due
to the
increase
in the
sales
and the
cost of
goods
sold
Less: expenses: -
Wages 45,50,000
.00
55,50,000.
00
10,00,000.
00
21.98% the
increase
could
be due
to
increase
in the
number
of

ADVANCE DIPLOMA OF LEADERSHIP 11
workers
workin
g in the
compan
y
Superannuation
4,32,250
.00
5,27,250.
00
95,000.
00 21.98%
the
increase
could
be due
to the
increase
in the
number
of
laboure
rs and
workers
in the
compan
y
Payroll taxes 1,90,363
.00
2,38,863.
00
48,500.
00
25.48% change
in the
number
of
workers

ADVANCE DIPLOMA OF LEADERSHIP 12
would
increase
the
taxes
payable
on their
salaries
or
wages
too
Rent
4,50,000
.00
4,50,000.
00 - 0.00%
no
change
Advertising
1,20,000
.00
1,50,000.
00
30,000.
00 25.00%
the
change
is due
to
increase
in sales
Repairs 12,600
.00
12,900.
00
300.
00
2.38% the
change
is due
to more
sales of
the
compan

ADVANCE DIPLOMA OF LEADERSHIP 13
y
Cleaning
53,000
.00
54,000.
00
1,000.
00 1.89%
the
change
is due
to more
sales of
the
compan
y
Utilities
26,890
.00
35,050.
00
8,160.
00 30.35%
the
change
is due
to more
sales of
the
compan
y
Accounting fees
58,000
.00
51,000.
00
-
7,000.00 -12.07%
Insurance
67,530
.00
65,730.
00
-
1,800.00 -2.67%
Interest 10,987
.00
12,378.
00
1,391.
00
12.66% more
amount
borrow
ed by

ADVANCE DIPLOMA OF LEADERSHIP 14
the
compan
y
Depreciation
1,24,578
.00
2,94,485.
00
1,69,907.
00 136.39%
-
Net profit before
taxes
7,77,222
.00
5,21,944.
00
-
2,55,278.00 -32.84%
Less: taxes
2,33,167
.00
1,56,583.
00
-
76,584.00 -32.85%
decreas
e due to
decreas
e in the
amount
of net
profits
before
taxes
-
Net profit after
taxes
5,44,055
.00
3,65,361.
00
-
1,78,694.00 -32.84%
Significant movements in cash flows:
The following table shows the relevant changes:

ADVANCE DIPLOMA OF LEADERSHIP 15
(Amounts in $)
Particulars 2017 Reasons
Cash flows from operating
activities
4,94,879.0
0
Cash flows from investing
activities
-
2,18,600.00
this amount is negative
due to purchase of
property, plant and
equipment and
acquisition of portfolio
investments
Cash flows from financing
activities
-
2,00,000.00
this is negative due to
repayment of long term
borrowings
Recommendations for improvements:
The company must look for the ways through which its net profits could be improved. This
could be done through either increasing the sale or by reducing the expenses that the
company incurs. The company is merely employing more assets in its business when it is not

ADVANCE DIPLOMA OF LEADERSHIP 16
even able to utilise them in the most profitable manner. Hence, these things should be looked
into.
Review of business plan:
The following are the timeliness for the various filings:
Activity statements:
 Monthly activity statements have to be filed by 21 st of each month
 Quarterly activity statements have to be filed by:
Quarter 4 (April - June) –due 21 July
Quarter 1 (July–September) – due 21 October
Quarter 2 (October–December)– due 21 January
Quarter 3 (January–March) – due 21 April
Quarter activity statements lodged electronically:
Quarter 4 (April–June) – due 11 August
Quarter 1 (July–September) – due 11 November
Quarter 2 (October–December) – due 28 February
Quarter 3 (January–March) – due 12 May
("Activity statements", 2019).
Fringe benefit tax return:

ADVANCE DIPLOMA OF LEADERSHIP 17
This has to be filed and all the taxes thereon must be paid by 21st May of each year ("Fringe
benefits tax return", 2019).
Goods and services taxes:
GST instalments- 28 July
GST reports- 21 August
GST instalments- 28 October
Annual GST information report- 31 October
Annual GST return- 28 February
GST instalments- 28 April ("Goods and services tax", 2019).
Incomes taxes:
Individual, partnership and trust income tax returns- October 31
Income tax lodgment date- 1 December
Income tax return lodgement- 28 February ("Income tax", 2019).
PAYG Withholding taxes:
Withholding payment summaries to payees – 14 July amongst other such dates ("Pay as you
go (withholding and instalments)", 2019).

ADVANCE DIPLOMA OF LEADERSHIP 18
Benefits of changing accounting system from MYOB to XERO:
Xero is mainly for the smaller and the medium sized businesses and this is the software whose subscribers
have almost doubled in the years. This is a beautiful accounting software ("Xero vs MYOB: Which Will
Work Better for You? | Liston Advisory", 2019).
MYOB on the other hand has bene in the market for much long. This software has its own computer based
accounting packages and this is the brand which reflects its own repositioning efforts.
The following are its beneifts over MYOB: (Zinghini, 2019)
In terms of cost, Xero is better since they offer only one package and the pricing
structure is much more straight forward when compared with the others.
In terms of sign up and the process of installation, Xero is slick, easy and intuitive
In terms of accessibility, Xero could be used in any PC and MAC
Also, multiple reports of the financials could be run in this accounting software at the
same time
This software blends in with the third parties which enables the company in more
complex accounting of inventory
It allows the employee logins for time sheets etc
The data in the Xero accounting software is continuous and there is nor requirements
of scrolling it for years
This accounting software has many currencies available in its platforms and foreign
exchange rates could be computed in real time
The software has a huge online support system, forums etc. ("Xero vs MYOB |
Making the right decision for your business | Axsys", 2019).

ADVANCE DIPLOMA OF LEADERSHIP 19
Profit and sales budget:
The following is the desired budgets:
(Amounts in $)
Particulars Qtr 1 Qtr 2 Qtr 3 Qtr 4 2018
Sales
26,82,328
.50
34,76,553
.75
32,48,212
.54
41,07,651
.53
135,14,746
.32
Less Cost of goods
Sold
8,31,521
.84
10,77,731
.66
10,06,945
.89
12,73,371
.98
41,89,571
.36
Gross Profit
18,50,806
.67
23,98,822
.09
22,41,266
.65
28,34,279
.56
93,25,174
.96
Expense
Wages
14,42,612
.50
14,42,612
.50
14,42,612
.50
14,42,612
.50
57,70,450
.00
Superannuation
1,37,048
.19
1,37,048
.19
1,37,048
.19
1,37,048
.19
5,48,192
.75
Payroll Tax
39,654
.21
39,654
.21
39,654
.21
39,654
.21
1,58,616
.83
Rent
1,14,750
.00
1,14,750
.00
1,14,750
.00
1,14,750
.00
4,59,000
.00
Advertising
42,000
.00
42,000
.00
42,000
.00
42,000
.00
1,68,000
.00
Repairs
3,289
.50
3,289
.50
3,289
.50
3,289
.50
13,158
.00
Cleaning
13,770
.00
13,770
.00
13,770
.00
13,770
.00
55,080
.00
Utilities
8,937
.75
8,937
.75
8,937
.75
8,937
.75
35,751
.00
Accounting Fees
12,877
.50
12,877
.50
12,877
.50
12,877
.50
51,510
.00
Legal Fees - - - - -
Insurance
16,761
.15
16,761
.15
16,761
.15
16,761
.15
67,044
.60
Interest
3,920
.00
3,920
.00
3,920
.00
3,920
.00
15,680
.00
Depreciation
73,621
.25
73,621
.25
73,621
.25
73,621
.25
2,94,485
.00
Total Expenses
19,09,242
.04
19,09,242
.04
19,09,242
.04
19,09,242
.04
76,36,968
.18

ADVANCE DIPLOMA OF LEADERSHIP 20
Net Profit Before
Tax
-
58,435.38
4,89,580
.04
3,32,024
.61
9,25,037
.51
16,88,206
.79
Company Tax
-
17,530.61
1,46,874
.01
99,607
.38
2,77,511
.25
5,06,462
.04
Net Profit After
Tax
-
40,904.77
3,42,706
.03
2,32,417
.22
6,47,526
.26
11,81,744
.75
Assumptions
:
1
Costs subjects to inflation should increase 2%: rent/ repair / insurance / cleaning /
utilities - paid equal parts each quarter
2 Sales grown expect to remain the same as 2015/16 & 2016/17
3 COGS % expected to remain the same
Sales
Less COGS
4 Wages increase existing staff 1.9% + $115,000
5 Advertising increase by 12% - paid equal parts each quarter
6 Accounting fees increase by 1% - paid equal parts each quarter
7 Interest 5.6% on $280,000 ($20,000 repaid at end of month)
8 Superannuation - 9.5% of wages each quarter
9 Company tax is 30% of net profit each quarter
10 State payroll tax is 4.85% (when wages exceeds 625,000)

ADVANCE DIPLOMA OF LEADERSHIP 21
References:
Activity statements. (2019). Retrieved 9 October 2019, from
https://www.ato.gov.au/Business/Reports-and-returns/Due-dates-for-lodging-and-
paying/Due-dates-by-topic/Activity-statements/
Advantages and Disadvantages of Ratio Analysis - What is Ratio Analysis?. (2019).
Retrieved 9 October 2019, from https://byjus.com/commerce/advantages-and-
disadvantages-of-ratio-analysis/
Fringe benefits tax return. (2019). Retrieved 9 October 2019, from
https://www.ato.gov.au/Business/Reports-and-returns/Fringe-benefits-tax-return/
Goods and services tax. (2019). Retrieved 9 October 2019, from
https://www.ato.gov.au/Business/Reports-and-returns/Due-dates-for-lodging-and-
paying/Due-dates-by-topic/Goods-and-services-tax/
Income tax. (2019). Retrieved 9 October 2019, from
https://www.ato.gov.au/Business/Reports-and-returns/Due-dates-for-lodging-and-
paying/Due-dates-by-topic/Income-tax/
Pay as you go (withholding and instalments). (2019). Retrieved 9 October 2019, from
https://www.ato.gov.au/Business/Reports-and-returns/Due-dates-for-lodging-and-
paying/Due-dates-by-topic/Pay-as-you-go-(withholding-and-instalments)/
Ratio Analysis: Meaning, Advantages and Limitations | Accounting. (2019). Retrieved 9
October 2019, from http://www.yourarticlelibrary.com/accounting/ratio-analysis/ratio-
analysis-meaning-advantages-and-limitations-accounting/65204

ADVANCE DIPLOMA OF LEADERSHIP 22
Ratio Analysis: Meaning, Objectives, Advantages, Limitations & Examples. (2019).
Retrieved 9 October 2019, from https://www.toppr.com/guides/accountancy/accounting-
ratios/meaning-objectives-advantages-and-limitations-of-ratio-analysis/
Xero vs MYOB | Making the right decision for your business | Axsys. (2019). Retrieved 9
October 2019, from https://www.axsys.com.au/myob-vs-xero/
Xero vs MYOB: Which Will Work Better for You? | Liston Advisory. (2019). Retrieved 9
October 2019, from https://www.listonnewton.com.au/information-centre/xero-vs-myob-
which-will-work-better-for-your-business
Zinghini, F. (2019). Xero vs MYOB - What's The Best Accounting Software For Your
Business?. Retrieved 9 October 2019, from https://www.fieldgroup.com.au/xero-vs-
myob-accounting-small-business/