MANAGE BUDGET AND FINANCIAL PLANS INTRODUCTION 1 TASK 11 TASK A1 TASK B5 TASK 28 TASK A8 TASK B11 TASK 312 TASK A12 A budget variance report 23 TASK B25 Modified Contingency plan 25 Modified implementation plan 27 CONCLUSION 29 REFERENCES 30 INTRODUCTION Managing the budgets and financial plans are the prime requirement of the business on which making adequate ascertainment oftheoperational practices which will be effective in relation
INTRODUCTION Managing the budgets and financial plans are the prime requirement of the business on which making adequate ascertainment of the operational practices which will be effective in relation with improving the financial health of the organisation. In the present reports, there have been studies and analysis based various measures used for budget preparation and for financial planning. However, it will be consisting of variance analysis and measuring the outcomes to have effective control over expenses incurred in business process. Big ride bicycle has been suggested various strategies and steps that are required to be adopted in relation with making adequate operational control over expenses. Preparation of budgets and their analysis will be effective in reference with having control on gains and goals of business to achieve the targeted aims at the right time. TASK 1 TASK A The master budget has been prepared which in turn will be useful and adequate in bringing the accurate ascertainment of the performance. To analyse the accuracy of the data base on which there have been examination of the facts which will represent the outcomes(Ho, 2018). Thus, the actual results will be compared with the projected data set to analyse the differences in the performance and make effective decision to bring changes in the operational functioning of the business. Master budget: Master Budget FY 2011/2012 FYActualQ1ActualQ2ActualQ3ActualQ4Actual REVENUE Commissio ns$ 60,000.00 $ 80,000.00 $ 15,000.0 0 $ 20,000.0 0 $ 15,000.0 0 $ 20,000.00 $ 15,000.0 0 $ 20,000.0 0 $ 15,000.0 0 $ 20,000.0 0 Direct wages fixed $ 200,000.0 0 $ 200,000.0 0 $ 50,000.0 0 $ 50,000.0 0 $ 50,000.0 0 $ 50,000.00 $ 50,000.0 0 $ 50,000.0 0 $ 50,000.0 0 $ 50,000.0 0 Sales$3,000,00$3,100,00$750,00$700,00$750,00$1,000,00$750,00$700,00$750,00$ 1
Waste Removal $ 50,000.00$ 50,000.00 $ 12,500.0 0 $ 12,500.0 0 $ 12,500.0 0 $ 12,500.00 $ 12,500.0 0 $ 12,500.0 0 $ 12,500.0 0 $ 12,500.0 0 TOTAL EXPENSE S $1,401,50 0.00$1,301,25 0.00 $350,37 5.00 $325,62 5.00 $350,37 5.00 $ 324,375.0 0 $350,37 5.00 $325,62 5.00 $350,37 5.00 $ 325,625. 00 NET PROFIT (BEFORE INTEREST & TAX) $ 938,500.0 0 $1,678,75 0.00 $234,62 5.00 $344,37 5.00 $234,62 5.00 $ 645,625.0 0 $234,62 5.00 $344,37 5.00 $234,62 5.00 $ 344,375. 00 Income Tax Expense (25%Net) $ 234,625.0 0 $ 419,687.5 0 $ 58,656.0 0 $ 86,093.7 5 $ 58,656.0 0 $ 161,406.2 5 $ 58,656.0 0 $ 86,093.7 5 $ 58,656.0 0 $ 86,093.7 5 NET PROFIT AFTER TAX $ 703,875.0 0 $1,259,06 2.50 $175,96 9.00 $258,28 1.25 $175,96 9.00 $ 484,218.7 5 $175,96 9.00 $258,28 1.25 $175,96 9.00 $ 258,281. 25 Interpretation: As per considering the above listed table on which it can be said that, there have been various sources through which big ride bicycles have generated the revenue. As per the budgeted data set where sales of each quarter have been estimated as $750000, while in actual outcomes Q2 has sales of $1000000 and rest of the Q’s have 30% less than Q2 sales. Along with this, there have been analysis over the various expenses like wages, repairs and maintenance. However, on the basis of which there have been generation of effective revenue which in turn will be useful and effective to have the adequate management of operations. Thus, in analysing the results on which it can be said that, the actual outcomes from the business is representing comparatively higher profitability than compare to budgeted. Therefore, it is due to increment in the revenue as well as reduction in the operating expenses 4
of firm. In accordance with this, it will be suggested to the professionals of Big ride Bicycles that, analysing the alternatives to reduce the operating expenses in each quarter which will result in better profitability. TASK B Contingency plan: This is the plan which will be effective in respect with managing the operational functions of the business with reference to mitigate the unavoidable risks. There have been various objectives which are required to be meet by the business professionals in accordance with having effective control over organisational operations(Maher, 2018). However, in respect with ascertaining the impacts of changes incurred in the revenue and expenses of the organisation in each quarter where it can be said that firm has variations in the sales revenue which is the most challenging part as it will affect the growth and profitability of firm. Hovered, in relation with managing the business risks there are several techniques which are required to be implicated by professionals such as Contingency Plan Company name: Big Red Bicycle Pty Ltd Person developing the plan: Name:Position: Risk identified: Strategies/activities to minimize the riskBy whenBy whom Risk management:Managing the risks which threaten the organization in both positive and negative ways. It includes risks relevant with operations, finance, marketing as well as meeting the competition on the right time. There might be risks relevant with improper business management, financial governance etc. that can affect organizational Before Q2JohnBlack, ChiefFinancial Officer(CFO), StuartLaRoux 5
growth and performance. In Big Ride Bicycle there is requirement for controlling general andadministrationexpensesthatwillresultinimprovingtheprofitabilityoffirm (Ermasova and Ebdon, 2019). These are the risks which are required to be controlled and monitored as per defining the best way to overcome with the operational challenges. Operations General Manager and Pat Roberts Senior Accountant Contingency Planning: There have been various unforeseen events which are required to be considered by the business and effective plans are to be made by them to undertake events and mitigate the operational risks(Maher, Fakhar and Karimi, 2018). In this there are issues which can be relevant with financial crisis, operational drawbacks as well as in appropriate demands for the produced goods. The risks and issues which have been effecting the operational management and issues that can be adequate with reference to bring the best qualitative control. After Q1MichelleYeo ChiefExecutive Officer(CEO) andTom Copeland Managing Director Managing funds flow: inflows and outflows of the funds must be monitored and executed by the accounting professionals with reference to reduce chances of financial crisis.Itcanberelevantwithsales,profits,geographicalcoverage,productline managementandmarketshareofindividual(Srithongrung,2018).Anaccounting professionals is being required to undertake initiative for controlling the costs implicated in each activities. Between Q2-3PatRoberts Senior Accountant Simulating the future: Professionals at Big Ride Bicycle must make effective plans and operational ascertainment which brings them accurate determination of future risks. Thus, budget preparation in accordance with the market demands for the products (Saad, 2018). Thus, such reports or simulation will be effective in decision making as well After Q3Sam Gellar Sales General Manager andCharles Pierce 6
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