Rowlinson Knitwear Business Analysis

This assignment examines the business operations of Rowlinson Knitwear, a small knitwear company. It focuses on the influence of key UK legislation, such as health and safety regulations, data protection laws, and tax acts, on the organization's activities. The analysis also explores the importance of Customer Relationship Management (CRM) strategies for retaining customers and competing effectively in the market.

Managing and Running
SME

INTRODUCTION
For effective administration of micro organisation, here is a need to formulate scheme
and plan of action that provides direction to employees for attaining their objectives effectively.
Small organisations have their limited business operations and largely affected by the factors
which are present in business environment. But still, they provide great competition to large
companies which are operating in UK. In order to continue the business for longer time period,
there is requirement to concentrate on development of the innovative ideas. Rowlinson Knitwear
is a very micro business that offers education and corporal vesture in UK (Skolud and et. al.,
2016).
However, current assignment highlight about main considerations which are needed to be
addressed while planning and allocating resources, Customer Relationship Management (CRM)
and development of the small business transnationally and production of cash flow statements
which are showing the value of determinate and variable price. Also, applications of the thought
of break-even investigation on organisational situation, interpretation of key financial statements
as well as key legislation and regulations which have impact upon small business activities have
been discussed.
TASK 1
P1 Considerations which are addressed by small organisation while allocating resources
Rowlinson Knitwear is small manufacturing organisation which produces clothes for
school kids and corporate personnel. They don't have the direct resources to provide their
products to their end customers. In this regard, management of organisation needs to take the
support of retailer who helps to provide clothes to target customers. Their main objective is to
provide quality clothes at affordable prices. There are many factors which are needed to be
addressed by management while planning their future actions for accomplishment of their
common objectives. Such different factors which are needed to be considered are mentioned as
follows:
Employees and skills: Employees are the main assets of organisation. It is the duty upon
the HR department of organisation to assess their potential and provide appropriate training
programmes which helps in improvement of their existing skills. So, human resource department
of organisation is considered as an important part which provides the roles and responsibilities to

employees according to their capabilities. It helps in accomplishment of the desired targets of
organisation within stipulated period of time.
Vision, goals and objectives: It is very important for every organisation to define their
vision, goals and objectives clearly to everyone which is associated with business activities. This
provides the opportunity to the manager of Rowlinson Knitwear to produce outline of their
different functions which are needed to be performed by employees. Such framework provides
guidance to employees in performance of their individual tasks. Growth and success of the
organisation is determined according to the capability of organisation to achieve their goals,
mission and objectives. In this regard, management of Rowlinson Knitwear needs to provide
adequate training programmes for effective use of new technologies and techniques which
improves their working efficiency.
Financial resources: Funds are one of the important sources and considered as the
backbone of organisational functions. Lack of funds has adverse impact upon the business
operations of small organisation and it is not possible for management to running their business
activities in market. For effective management of funds in Rowlinson Knitwear, management of
organisation is need to oversee their fiscal accounts like P&L account, Balance sheet, cash flow
statements etc. It helps in interpretation of the profits and losses of organisation and
implementation of effective measures which improves overall financial performance in future
(Stanciu, 2015).
M1 Various tools in a analytical and construction way to design resources
The two techniques which are adopted by the management of Rowlinson Knitwear for
effective planning and allocation of resources are mentioned as follows:
 Gantt chart: It is a type of bar chart which provides information regarding project
schedule. This helps in ascertainment of the time period which is required to complete
specific project. It improves the efficiency of manager of organisation regarding effective
allocation of roles and responsibilities to all employees. This helps in formulation of
effective business structure which is more established which improves internal strength
of organisation.
 Critical path analysis: It is one of the effective methods which are used by the manager
of Rowlinson Knitwear to determine the different paths which are needed to be achieved

for completion of project. Under this, the longest path is selected which takes the highest
time to complete so, the whole project is completed within stipulated period of time.
M2 Importance of planning and allocating resources
There are large numbers of benefits gathered by Rowlinson Knitwear which are
mentioned as follows:
 It helps in achievement of profitable aspects in more efficient manner
 Improves internal strength of organisation through attainment of flexibility in operations.
 Development of the existing skills of employees
Optimum utilisation of given resources
D1: Critical assessment the use of suitable resources
As per the viewpoint of Winarno and Wijijayanti, (2018) different resources are required
for formulation of their final products and providence of business activities. Such sources are
named as material, labour, financial resources etc. All such resources help to compete in market
effectively.
TASK 2
P2 Various procedure of consumer interrelationship administration for small organization
Consumer relationship administration: It is the effective approach which includes
about the ability of organisation to have good interaction with existing and potential customer's.
For effective management of relation, management of Rowlinson Knitwear uses the history of
data analysis about customer's by focusing on their behaviours and preferences. It helps in
retention of their customers and improves their sales figure. This approach is used to learn more
about customers and providence best clothing product to target audiences. Under this approach,
data is collected with the help of different communication channels like website, telephone,
email, live chat etc.
Process of customer relationship management
Assessment of customer value: One of the major aspect which helps in maintenance of
effective relation with their customers. It is the obligation upon the management of organisation
is is to determine their requirements and preferences and understanding of their views about
quality and price of their existing products. The best method which helps in collection of their
views and feedbacks is to conduct market research. It also helps in knowing the current trends

which are prevail in market and suggestions of customers regarding improvement of their
existing products. All such activities helps in implementation of best practices which satisfies
their different needs and attain their trust and loyalty towards their product.
Implementation of effective communication channels: To maintain effective relation
with their customers, Rowlinson Knitwear need to develop effective communication channels. It
helps to keep in regular tough with them and grab the information about latest trends of clothes.
The different communication channels are organisational official websites, social media, IVR,
voice mobile etc. which helps to expand their reach towards their targeted customers.
Role of E-mail and digital marketing for effective relation: It is one of the effective
medium which provide information about their current operations and helps in adoption of such
programmes which helps in influencing the behaviour of customers. Application of digital
marketing platform has wide reach towards customer and contributes in bring awareness about
their products. It helps in attraction of large number of customers (Ali and Babiker, 2017).
P3 Development of small business as transnationally and its benefits and drawbacks
Transnational sales: It is important concept which helps the organisation about analysis
of their profit and revenues. It refers to the sale of organisational products and services across the
domestic boundaries as per the demand created in such market place. It is the duty of
organisation is to apply different kind of tactics as per the situations present in such specific
nation for the purpose of earning large number of profits and build their brand image in new
market. To attract the customers of new area need provide various benefits which helps to build
long term relationship with customers.
In this regard, organisation is need to provide large number of trial that offers the
possibility regarding expedition of several kinds of utility at international level. Now, the more
emphasis is provided by manager is to provide products at reasonable cost. All such activities
helps in expansion of the business functions. There are many advantages and disadvantages are
ascertained by business through expansion of their activities.
A business can be developed transnationally by launching products in multiple countries.
It will help to enhance profitability and sales which will increase liquidity and help to operate
business in more effective manner. It provides opportunity to the organisation to expand its
business in different geographical locations. To develop it in different nations the company is

required to take permission form the government of the country so that operations can be
executed in appropriate manner. Benefits and drawbacks of it are as follows:
Benefits
 Independence: Here, employer has full rights to take all decision regarding expansion of
business operations. Employer is need to such decisions at regular interval which
provides the opportunity to run their business properly.
 Lifestyle: In micro enterprise, distinct way of operative is provided which is considered
by staff members performing in organisation. Through which large number of benefits
are attained by employee.
 Foreign investment: When business is developed transnationally then it will help to
enhance foreign investment and maximise the profits by attracting customers and foreign
investors.
Drawbacks
 Financial risk: One of the most important risk which is faced by organisation during
expansion of business activities at international level. Small organisations doesn't have
adequate amount of funds.
 Large time period: For growth of business operations management need to use
innovative techniques and methods which takes large amount of time to get effective
results.
 Success cannot be estimated: It is not possible to estimate that the business will achieve
success in future sometimes transnational business get huge failure due to their weak
strategies and policies.
M3 Elements of customer relationship management process
Few major components that plays an important role in the process of customer
relationship management are mentioned below:
 Understanding market and customers: To attain good relation need to identifies the
current market trends and the desire of customers from organisation.
 Development of offer: Make changes in their existing products and deliver something
new which adds value in their product (Chauma, 2017).
 Acquire the trust of customer: For effective relation, need to acquire their confidence
towards their brand.

 Retain the customers: For retention of customer need to provide discounts on the basis
of their loyalty. It helps to build long term relation.
M4 Develop transnational operations with the use of internationalisation model
It is the obligation upon management of organisation is to formulate their operations with
the help of internationalisation model. It has four different parts which are mentioned below:
 Knowledge opportunity: Manager of organisation has the knowledge to grab the
opportunities effectively to achieve their predetermined goals.
 Relationship commitment decision: Providence of their products and services on timely
basis to their suppliers and customers for expansion of their business operations.
 Network positioning: Establishment of good networks in market with the help different
promotional tools.
 Learning curve: Need to adopt new programmes for introduction of their product.
D2 Critical evaluation of customer relationship management process at entire stage
The process of CRM includes use of 4C's which are mentioned below:
 Correlate: Creation of effective interaction with other departmental functions which
helps in better establishment of relation
 Combine: Establishment of connection between company and customer's
 Cognize: Collection of various information about different operational activities
 Connect: Process of establishment of connection with suppliers, consumer etc.
TASK 3
P4 Production of monthly cash flow forecast which is showing fixed and variable costs
Sources of finance
There are many sources which provides the opportunity to the management of
Rowlinson Knitwear to raise funds for performance of different business functions. It helps in
making the financial organisation more strong which are defined below:
 Bank loan: It is most common external source of finance. It helps the organisation to
easily take commercial loans from banks at fixed interest rate which paid annually by
organisation. Such finances are raised by organisation for long period of time (Cojoacă,
2017).

 Equity finance: It includes the issue of equity and preference shares by organisation
which are trade on stock exchange. One of the common method of raising long term
capital.
 Leasing and hire purchase: One of the method which helps in raise funds from the
leasing of their property and equipments to some other person for use. The funds are
come in the nature of rent or interest.
Forecasting and budgeting
Forecasting is important activity which helps in preparation of budgets which provides
standards of working for improvement of actual performance. The different tools which are used
by Rowlinson Knitwear for budgeting and forecasting are mentioned below:
 Time series data: as per this tool, management of organisation provides emphasis
regarding determination of the time period which is needed to complete specific project.
It brings an obligation upon all the employees is to perform and complete their activities
within given period of time. It helps to attain competitiveness in in their operations.
 Calculating a moving average: This tool helps to understand current preferences of
customer on the basis on current trends which are prevail in market. It helps to gain
loyalty (Durst, Yip and Lee, 2015).
Balance Sheet, P&L and cash flow statement of the Rowlinson Knitwear:
Year 2017 (value in £) 2018 (value in £)
Fixed assets 130 210
Stock 20 35
Debtors 70 55
Bank 20 30
Total 240 330

Creditors 120 180
Bank overdraft 90 70
Total 210 300
Working capital 30 80
Profit and Loss Account at the year ended
2017 2018
Sales 20 30
Cost of sales 10 15
Gross profit 30 45
Overheads 6 7
Net. profit 24 38
Cash flow Statement
Cash
distri
bute
d
Ja
n
Fe
b
Ma
r
Apri
l May
June
Jul
y Aug. Sep. Oct.
Nov
. Dec
Cas
h
dist
ribu
ted
Varia
ble
cost

Direc
t
mater
ial
15
00
12
50
125
0
130
0
145
0
1580
165
0 1458 1589 1685
198
5
178
5
150
0
Direc
t
labou
r
12
50
75
0 500 500 135
0
1400
143
5 1445 1474 1458
156
8
158
9
125
0
Over
head
10
00
50
0 500 700 270
0 2850
295
0 2987 2250 1850
165
0
125
0
100
0
Fixed
cost
Sellin
g and
distri
butio
n
75
0
75
0 750 800 850
950 850 650 720 715 785 795
750
Total
cost
use
45
00
32
50
300
0
330
0
635
0 6780
688
5 6540 6033 5708
598
8
541
9
450
0
Cash
surpl
us/
defici
t
28
00
0
26
25
0
242
50
219
50
180
20 1319
0
835
5 3915 32
-
3426
-
711
4
-
105
80
280
00
P5 Thought of break-even analysis
Break-even analysis: On of the important method which is used by the management of
Rowlinson Knitwear to identify their profitability. It also helps in determination of the sales
figure which is need to achieve by organisation monthly and annually. Breakeven point is
attained by the organisation when the profit and loss are equal to each other. This helps in

formulation of effective strategies which improves their sales at minimum cost and contributes in
earning of large number of profits.
In organisational context, there are many situations when organisation is need to forecast
about their production and sales figure (El-Rafei and et. Al, 2017). In this regard, Break-even
analysis plays an important role for reduction of their wastes and improvement of production
capacity. For ex., Fixed cost is 16000 and variable cost is 8 rupees per unit. Selling price is 10
per unit. BEP is calculated as:
BEP= Fixed cost/construction margin per unit or product= 16000/(10-8)= 8000.
P6 Representation of the major fiscal province and its share in booming administration
There are many financial accounts which are prepared by Rowlinson Knitwear.
Interpretation of such accounts helps in drawing important conclusions which contributes in
successful management of the operations. The different annul accounts are named as financial
statements, balance sheet, profit and loss account and cash flow statements which are defined
below:
 Financial statement: It comprises the overall financial position of organisation. All the
different accounts like cash flow, profit and loss account and balance sheet are considered

as financial statements which provides information regarding financial position of
organisation. Also, helps in determination of the assets and liabilities of organisation at
the end of year.
 Balance sheet: It is the statement which comprises the information about the assets and
liabilities of organisation. Such information is further used by investors about
determination of items which are owns and owes by organisation. It also helps in
determination of the amount which is invested by shareholders. It shows the information
about the assets which is used for different purposes in organisation. It shows the
goodwill of organisation.
 Profit and loss account: This account is prepared by the management of Rowlinson
Knitwear to ascertain their profits and losses which are attained by the organisation from
their different operations during one financial year. It also helps in determination of the
amount of expense and income on the basis of diversified business activities. It helps in
identification of the such areas where organisation has incurred unnecessary expenses. It
provides the opportunity regarding application of effective strategies which reduces such
expenses improves their overall profit margins (Javaid and Iqbal, 2017).
 Cash flow statement: One of the important statement which is prepared by Rowlinson
Knitwear to manage flow of cash in effective manner. It provides the opportunity to
perform their day to day functions effectively. It also helps in allocation of the the funds
to different departments in more appropriate manner which improves their overall
efficiency. It provides the information regarding flow of cash in and out in organisation.
Two different things which are captures by this statement are current operating results
and the changes which are occur in balance sheet. The different persons whom are
interested to use cash flow statements of organisation are lenders of creditors, investors,
accounting personnel, employees and shareholders.
Profitability ratios Formula 2017 2018
Gross profit ratio gross profit/net sales*100 146 165
Net profit ratio net profit/net sales*100 116
126.66666666
67

Liquidity ratios Formula 2017 2018
Current ratio Current assets / current liabilities 1.69:1 2.68:1
Acid test ratio
Current assets – inventories / current
liabilities 0.68:1 1.213:1
In order to analyse the position of the Rawlinson by evaluating the profitability as well as
liquidity position of the company. As, it has been seen that net profit ratio as well as gross profit
ratio is increase at faster rate from the last year with 20 and 10 % respectively. Gross profit ratio
of an organisation shows the profit making ability before paying any taxes, here Rawlinson
Knitwear has a gross profit ratio of 165 which better than the last year, similarly They have
earned net profit ratio of 126.666 which is again better than their last year's ratio. Liquidity
ratios shows liquidity ability of an organisation, and here from above ratios it’s clear that
Rawlinson Knitwear has a strong liquidity ability. In accordance with the liquidation position
which is more effectively for the company to make further investment in various project. They
would also have sufficient amount of capital as well as assets which will be taken into account
for appropriate decision making (Liquidity ratio, 2017).
M5 Analytic and Numerical tools to offer specific detail of break-even and cash flow
Huge role is played by analytical and quantitative techniques in determination about
break-even points and cash flows. These techniques are used by the organisation to improve their
internal strength and performance. It provides the opportunity regarding performance of
functions without any hindrances. Break-even point helps in determination of level of output
when organisation attains the situation of no profit and loss. On other hand, cash flow statements
help in effective management of cash flow and proper maintenance of working capital.
D3 Critical evaluation of key financial statement
Financial statement is the wider term which comprises different kind of important
documents like income statement, balance sheets and cash flow statements. All such accounts
contain different information regarding different things which are happen in organisation.
Balance sheet of organisation provides detail about assets and liabilities. It improves the decision
making power of investors. Profit and loss account provides the information regarding expenses
and incomes. It helps the management to decide about their profitability. On other hand, cash

flow statement helps in identification of amount of cash which comes in and out from
organisation (Ludmila and Stanislava, 2015).
TASK 4
P7 Key legislation and regulations which have outcome on the micro organizational activities
Here are many regulations and legislations are provided by UK government which is
need to follow by the all organisations. It is the obligation upon the management of Rawlinson
Knitwear is to effectively implement all such rules and regulations. It provides the opportunity to
gain the trust and loyalty of employees and customers towards their operations. It also helps in
gathering the support of government and society. If such regulations are not fulfilled by the
management of organisation, then adverse impacts are ascertained on their business operations
and also lowers down their profitability. The different key legislations and their impact upon the
activities of Rawlinson Knitwear are mentioned below:
 Tax and employment act 1976: This act brings an obligation upon the organisation is to
pay different taxes which are prevail in UK. Due to non-payment of such amount large
number of penalties are incurred which also has adverse impact upon the brand image of
organisation. Timely payment of taxes helps to gather the support of society.
 Health and safety act 1974: This act provides the rules and regulations about the safety
at workplace. It is the duty of the manager of Rowlinson Knitwear is to implement all
safety measures in organisation which helps in creation of positive environment in
organisation. It has positive impact upon the performance of employees. It helps the
employer to build good relation with their employees.
 Data protection Act 1998: As per this act not any employer of UK allowed to provide
the confidential information about the employee to any third person. The process of
transmission of information is done legally in organisation. It also brings restriction upon
the employees is not to provide confidential information to outsiders (Nowotarski and
Paslawski, 2015).
 Record keeping act 2006: This act brings an obligation upon management is to keep
proper record of all employees which are working in organisation. It improves the
capability of manager to identifies the skills of employees and adoption employee based
training programmes.

M6 Implications of key legislation
There are many legislations which has huge impact upon the organisational functions. It
provides the opportunity to the management of organisation is to take care of important issues
like health of employees, safety, data protection. It helps to attain the support of government and
society.
D4 Key regulations affected on small business
There are many regulations which are need to follow by organisation while providing
their services. Fulfilment of health regulations helps to attain the support of employees in their
different business functions which provides success in their business operations. Such
regulations also direct the employees which helps in improvement of their actual performance.
CONCLUSION
It has been concluded from the above report that Customer Relationship Management is
an important aspect for small organisation like Rowlinson Knitwear for retention of their existing
customers. It helps to give tough competition to their competitors. Effective planning plays an
important role in allocation of the different resources. Moreover, many legislation(s) are
provided by the government of UK which are needed to be implemented by the organisation for
ascertaining the support of society and government. In addition, fulfilment of all such regulations
provides an opportunity to attain the trust of employees on organisational activities and improves
their performance.

Online

Liquidity ratio. 2017.[Online]. Available through: <https://cleartax.in/s/liquidity-ratio>.