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ManAGING FINANCIAL RESOURCES AND DECISIONS INTRODUCTION 1 TASK 11

   

Added on  2020-01-15

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MANAGINGFINANCIALRESOURCES ANDDECISIONS
ManAGING FINANCIAL RESOURCES AND DECISIONS INTRODUCTION 1 TASK 11_1
Table of ContentsINTRODUCTION......................................................................................................................1TASK 1......................................................................................................................................1a) Preparation of cash budget................................................................................................1b) Surplus or Deficit of cash budget .....................................................................................1TASK 2......................................................................................................................................2a) Calculation of selling prices and determining business profits ........................................21) Selling price per unit.........................................................................................................22) Profits at sales of 800 units...............................................................................................2b) Selling price and profit determination...............................................................................31) Selling price per unit.........................................................................................................32) Profit at additional production of 400 units......................................................................3TASK 3......................................................................................................................................3a) Application of investment appraisal techniques................................................................3b) Critical evaluation of financial appraisal methods and report to MD...............................5TASK 4......................................................................................................................................6a) Explain the purpose of main financial statements and their formats in different..............6organizations .........................................................................................................................6b) Assessing the information need of different users of the financial statements.................6c) Calculation, comparison and analysing the financial ratio of Hotel and Beauty Salon...7TASK 5......................................................................................................................................8a) Finance sources, implication, cost and impact on financial statements............................81) Sources of finance.............................................................................................................82) Implication of financial sources........................................................................................83) Cost of financial sources...................................................................................................94) Impact on financial statements..........................................................................................95) Financial planning...........................................................................................................10CONCLUSION .......................................................................................................................10REFERENCES.........................................................................................................................11Books and Journals .............................................................................................................11
ManAGING FINANCIAL RESOURCES AND DECISIONS INTRODUCTION 1 TASK 11_2
Index of TablesTable 1: Cash budget of Perry bar Window Product..................................................................1Table 2: Total cost of the product..............................................................................................2Table 3: Calculation of Profits at sales of 800 units...................................................................3Table 4: Calculation of selling price per unit at additional production .....................................3Table 5: Calculation of Profits at sales of 1200 units.................................................................3Table 6: NPV of project A.........................................................................................................4Table 7: NPV of project B..........................................................................................................4Table 8: payback period of Project A.........................................................................................5Table 9: payback period of Project B.........................................................................................5Table 10: Computation of ratios for Hotel and Beauty Salon....................................................7
ManAGING FINANCIAL RESOURCES AND DECISIONS INTRODUCTION 1 TASK 11_3
INTRODUCTIONFinance plays a crucial role in every business organization because without havingadequate funds, company will not be able to operate efficiently. Perry Barr window Ltd isproducing a range of quality doors and windows for customers and builders. In the presentmarket, demand for quality windows products has been increasing at exponential rate.Therefore, company's MD decided to expand its production sites across various cities. Thisexpansion will contribute to high growth in sales, revenue and market share. In the presentreport, various financial as well as managerial tools will be discussed for taking effectivebusiness decision. TASK 1a) Preparation of cash budgetCash budget: It is a summarized statement of predicted cash revenues andexpenditures for the future period (Kemp and et.al, 2015). As per the scenario, cash budget isprepared here for Perry Bar windows product.Table 1: Cash budget of Perry bar Window ProductParticularJuneJulyAugustSeptemberRevenuesCash sales150000156000135000190000Total cash revenues150000156000135000190000ExpendituresCash purchases55000460008600074000Credit purchases2800036000Rent4500045000Other expenses22000240003000038000Loan instalment900090009000Total cash expenses13100079000153000193000Net cash balance(Surplus or Deficit)1900077000-18000-3000Opening bank balance180003700011400096000Closing cash balance370001140009600093000b) Surplus or Deficit of cash budget Cash budget helps to estimate net cash balance by comparing total cash revenues andexpenses (Amoako and et.al, 2013). Excess of cash incomes over the expenses is calledsurplus while lower the incomes than payments will imply deficit balance. As per thescenario, Perry Bars cash budget indicate that in the month of June and July, company hassurplus cash balance,. It means that cash revenues are comparatively higher than cash1 | P a g e
ManAGING FINANCIAL RESOURCES AND DECISIONS INTRODUCTION 1 TASK 11_4

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