Financial Management and Operations: A Comprehensive Analysis

MBL502, Academic Analysis
FINANCE FOR MANAGERS
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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
Part - 1..............................................................................................................................................3
1.1 Constructing balance for the ABC Pty Ltd for the year ended 30 June 20220.....................3
1.2 Constructing Profit of Loss Statement for the ABC Pty Ltd for the year ended 30 June
20220...........................................................................................................................................4
1.3 Constructing Cash Flow statement for the ABC Pty Ltd for the year ended 30 June 20220 5
Part – 2.............................................................................................................................................6
2.1 Alternative sources of finance and five characteristics or features that are considered by
individual.....................................................................................................................................6
2.2 Three sources of finance that are suitable for start-up business............................................7
2.3 Three sources of finance suitable for growing- expansion firm............................................8
Part – 3.............................................................................................................................................9
3.1 Rate of diminishing value depreciation.................................................................................9
3.2 Firm’s additional EBIT in years 1 to 5 and the after tax incremental earnings.....................9
3.3 Calculating additional free cash flows in year 0 to 6.............................................................9
3.4 NPV of cash flows generated by project.............................................................................10
3.5 Project evaluation measures:...............................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
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INTRODUCTION
Financial management refers to the process including planning, directing, organising and
controlling of financial activities like procurement and the utilisation of the funds of enterprise. It
also involves application of the management principles to the financial resources of enterprise. It
could also be described as area or the function in organisation that is concerned with the
profitability, cash, expenses, credit and all the monetary transactions ensuring that the firm has
adequate mean for carrying out the operations of business satisfactorily (Bulturbayevich, and
et.al.,2020). Financial resources are limited and it is essential for the managers to make optimum
utilisation of the available financial resources for the growth and benefit of organisation.
Financial managers are required to carry out various operations like reducing the cost of finance,
ensuring that the funds are available whenever required and deals with effective utilisation of
funds. Present report focuses on financial management and various operations to be carried out
by the managers. It will provide numerical on financial statements, the different sources of
finance available to business for start up firm for the expansion planning. It will also cover the
financial analysis of investments or projects in which company is planning to invest funds for
increasing the efficiency and productivity.
Part - 1
1.1 Constructing balance for the ABC Pty Ltd for the year ended 30 June 20220
Statement of financial position for the year
30/6/2019
Particulars Amount
ASSETS
Non Current Assets
Plant & Equipment 310
Land & Buildings 1210
Vehicles 235 1,755
Current Assets
Accounts Receivables 235
Inventory 370
Cash 200 805
TOTAL 2,560
Shareholders' Equity
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Ordinary Shares 690
Preference Shares 260
Retained Earnings 170 1,120
Liabilities
Non Current Liabilities
Corporate Bonds 430
Bank Loan 320 750
Current Liabilities
Accounts Payable 270
Bank overdraft 330
Tax liability 90 690
Total Liabilities 1,440
TOTAL 2,560
1.2 Constructing Profit of Loss Statement for the ABC Pty Ltd for the year ended 30 June 20220
Statement of Profit or Loss for year ended
30/6/2019
Particulars Amount
Sales 992
Other income (dividend received) 50
Total Revenue 1042
Cost of Sales 569
(272+554-257)
Wages 117
Ineterest 27
Utilities 57
Loss from sale of Machinery 10
Rent 82
862
Earnings before tax 180
Tax -10
Earnings after tax 170
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