Financial Management: Sources of Information, Contingency Plan, Budget Analysis, Cash Management, and More

This article covers various aspects of financial management, including sources of information for cost estimation, external banking records, data analytics tools, contingency plans, financial planning, cash management, cost-volume-profit analysis, and more. It also discusses the stakeholders involved in the budget setting process, the golden rule of double entry bookkeeping, and factors affecting budget. The article concludes with a discussion on the usefulness of data analysis in financial management processes.

Running head: Financial Management
Financial Management
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Part A
1) The two sources for information on estimation of costs which might help a manager are:
 Budget Analysis
 Past expenses records
2) The three sources of external banking records that are used are keeping records are:
 Generalized Accounting Book: The book includes all journal and ledgers, which
is grouped into general and subsidiary categories.
 Cash Book: It includes all the accounting for payments done and receipts
collected.
 Banking or financial records: It includes cheque books, deposit book, and the
bank statements (Rostamkalaei and Freel 2016).
3) The company can use data analytics tools as a source for filtering and refining the data
available.
4) Contingency plan a risk management and an assessment tool, which perceives all
possible future events and circumstances. It is a post period plan after occurrence of an
event to cure risk. The plan is a type of fallback plan or plan B (Lestari et al. 2018).
The reasons for having a contingency plan are:
 Preparation: Everyone should be prepared for the worst and unforeseeable
circumstances, which can disrupt the daily operations of a business.
 Flexibility: Every business should be flexible and proper action could be taken if
any circumstances arises.
 For not creating an environment of panic in the business.

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 The best thing we should have a contingency plan is to reduce and eliminate
losses in these cases.
The steps for developing a preparing a contingency plan are:
 Identifying the underline the key risk, which can disrupt the business
environment.
 Prioritizing every and different kind of risks
 Customization of Contingency plan according to the business environment
 Maintaining learning and reviewing the plan with changing environment
The specific areas to include the contingency plan are:
 Insurance: In case of extreme natural events and loss of goods due to theft, fire
and others business can protect itself from insuring there products (Yong and Tan
2017).
 Setting up a dedicated emergency reserve fund.
 Proper training and guidance of work role to be played at the time of contingency.
5) Financial plan is all about setting financial goals and plans to achieve those in the long
term; it varies according to need and demands of investors.
It include the current financial position, goals and needs, requirement and return from
money along with defined period for investment, risks the investors is able to bear and
the asset class permissible to invest.
6) The external factors, which can affect the financial planning is the economy and the
environment where a business operates. The internal factors can be improper use of
funds, lack of skills to utilize the funds and others.

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7) Budget is a financial estimation of all expenses and receipt in anticipation of an event.
The objectives of a budget are defining goals and preplanning of all income and
expenses. The role of a master budget is to determine classification of expenses and
payment to be made (Inoue and Back 2015).
8) The table for the cost revenue variance is described in the excel sheet.
a) Based on the schedule the entity is performing well. It has tried to increase its net income
and has a bigger top line that is revenue.
b) The actions, which could be taken for flexible budget variance analysis is increase the
production and decrease the variable expenses for the company to generate and stabilize
the net income.
9) A good cash management involves keeping proper record and utilizing the cash
effectively and efficiently. It also shows the efficiency of utilizing those cash in short
term investments.
10) The analysis of cost volume and profit is an estimation of how changing volume of
production and costs incurred can affect the company daily operations and the financials
like the operating and net income (Said 2016).
The company can overview there expenses as to what amount is being spent into the
expenses and what is it earning and from where it needs to show efficiency. It also shows
the breakdown and differentiates between the fixed and variable costs incurred by the
company.
11) The three types of broad supplies under the GST legislation in Australia are:
 Taxable Goods and services
 GST Exempt

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 Input Taxable Good and services or Input Tax.
12) The possible reason for this variance is the extra payment above the standard labor rate
and the working hours or the volume of production can be the possible reasons for
variance in rate.
13) Factors to be considered while evaluating the financial information systems is the
background of the company, volatility in the financial statements shown, and goodwill
and credibility for which the financial information is gathered.
Part B
1. A. The five basic steps of accounting cycle are:
 Analyze and identify the company’s transaction.
 Maintaining records in the form of Journal
 Ledger Entries
 Posting of ledger entry into the trial balance
 Preparing Financial Statements from the same Trial Balance
B. The golden rule of double entry bookkeeping is for the real account debit side in which
all the recipients comes in and the credit what goes out in the form of expenses.
2) Depending on the size and complexity of the operation there can be many stakeholders in the
budget setting process. The two stakeholders which sold be involved are the investors,
shareholders and creditors of the company.
3) Cash flow shows the variability of cash in and out of the business in the daily operations of
the business or individual. It also shows the net available cash balance at the end of period after
all recipient and expenses of cash are been recorded (Li, Sougianni and Wang 2017).

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For example, an organization can control its cash flow through trend analysis and percentage
analysis of the different components of the cash flow in which the company is exposed.
4) Primary and secondary data are the two sources from where we can get data for analysis.
5) Data collected can help the effectiveness of the financial management processes by
identifying and analyzing costs, which the company pay for the same, regarding the revenue
generation and receipts for the company data analysis can help increase the effectiveness.
6) Factors affecting budget are:
 Variability in revenue and expenditure
 Changing Market conditions and business environment
 Legislative and political changes
 Volatility in operations of the company.

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References
Inoue, K. and Back, L., 2015. Column-integrated moist static energy budget analysis on various
time scales during TOGA COARE. Journal of the Atmospheric Sciences, 72(5), pp.1856-1871.
Lestari, P.U.J.I., Paripurno, E.T., Kusumayudha, S.B. and Nugroho, A.R.B., 2018. MODEL OF
COMMUNICATION PLANNING FOR CONTINGENCY PLAN OF DISASTER RISK
MANAGEMENT SINABUNG VOLCANO ERUPTION.
Li, S., Sougiannis, T. and Wang, I., 2017. Mandatory IFRS Adoption and the Usefulness of
Accounting Information in Predicting Future Earnings and Cash Flows.
Rostamkalaei, A. and Freel, M., 2016. The cost of growth: small firms and the pricing of bank
loans. Small Business Economics, 46(2), pp.255-272.
Said, H.A., 2016. Using Different Probability Distributions for Managerial Accounting
Technique: The Cost-Volume-Profit Analysis. Journal of Business and Accounting, 9(1), p.3.
Yong, H.N.A. and Tan, K.L., 2017. The Influence of Financial Literacy towards Risk Tolerance.
International Journal of Business and Society, 18(3), pp.469-484.