Dermal Therapies Clinic Financial Analysis

This assignment requires you to analyze the financial statements of a small dermal therapies clinic. You'll calculate key financial metrics such as cost of goods sold, gross profit, net profit, and the break-even point. The analysis will help determine the clinic's profitability and identify areas for potential improvement.

TUTORIAL ACTIVITY WORKBOOK
WORKBOOK 2 FINANCIAL MANAGEMENT
On completion of Tutorial Activities for workbook 2 Financial Management, please email directly to your
Lecturer/Assessor.
This workbook containing Activity 13 to 23, must be completed, as an essential component of your assessment plan,
and is required to be completed before you sit your final exam assessment.
Please note that areas in green are for assessors only
No part of this workbook may be reproduced by photocopying or any other means without written permission from the
Australasian Academy of Cosmetic Dermal Science.

AACDS WORKBOOK COVERSHEET
Please submit to your AACDS lecturer.
Student’s Name LaShai Howard
Unit 1.4 Practice Management and Administration
Course
(Please select)
10510NAT Advanced Diploma of Cosmetic Dermal Science
52709WA Graduate Diploma of Cosmetic Nursing
52707WA Graduate Diploma of Dermal Therapies
51107WA Diploma of Management (Medispa Practice)
AACDS ASSESSMENT POLICY
Assessments Marked “Competent” or “Not Yet Competent”:
1. Must be completed by the due date specified in the student manual for each corresponding unit.
2. If a student fails to meet the due date as specified, this may incur additional fees to extend unit access.
3. If a student consistently achieves “Not Yet Competent” and demonstrates poor performance in all
assessments, AACDS reserves the right to terminate the student’s enrolment for the corresponding unit.
Graded Assessments/Exams:
1. Must be completed by the due date specified in the student manual for each corresponding unit.
2. A student will have the opportunity to resit a failed assessment, however on the second attempt the pass
mark will increase by 10%.
3. If a student fails on the second attempt, the student must re-enrol into the failed unit at the current full-fee
GR A D E (I F AP P LICA BLE ): Competent
Not Yet Competent
Please Resubmit this Assessment by:
AS S E S S M E N T FE E D BA CK F R O M LE CT UR E R :
COM P LE T I O N OF AL L T UT OR IAL AC TIV IT IE S :
Yes No
RE COM M E N D AT IO N T O S IT F IN A L E X AM
Yes No
AS S E S S O R ’S SIG N AT UR E : DAT E :
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ACTIVITY 13
RESOURCE LIST
Students need to consider a detailed costing of all the equipment and resources (machinery, furniture, equipment including stock) that their virtual medispa will need to acquire
to operate. It is recommended that students obtain real world quotes to ensure their resource list is as accurate as possible in its reflection of resource costs.
Yes No
Equipment Cost Furnishings Cost Supplies Cost
Ultraceuticals Microdermabrasion
machine
$6,000.00 Reception desk & chair $800.00 Disposable gloves $100.00
Microderbrasion Machine $3,000.00 Chairs $400.00 Fibrella facial wipes $100.00
Magi lamps $1,000.00 Stools $300.00 Paper (consultation forms) $60.00
Safety glasses $300.00 Sofa $300.00 Pens, folders & other stationery items $250.00
Omniflux LED machine $30,000.00 Coffee machine $150.00 Alcohol pads $150.00
IPL Machine $33,000.00 Aesthetic bed $2,000.00 Bed protector rolls $150.00
Needling Machine $3,000.00 Computers $3,000.00 Disposable razors $60.00
Ultrasonophoresis Machine $1,300.00 Printer $250.00 Cotton tips $30.00
Hot towel cabby $500.00 Mirror $100.00 Tissues $30.00
POS System/hardware $360.00 Towels $300.00 Paper Towel $45.00
Television $2,000.00 Fridge/freezer $400.00 Cleanser $127.60
Laminator $230.00 Microwave $120.00 Moisturiser $155.70
Phone $120.00 Coffee Table $200.00 Eye Cream $155.70
Reveal skin scanner $3,750.00 Lockers $350.00 Exfoliant $155.70
Camera $400.00 Table (staff room) $100.00 Vitamin A Serum $175.70
Total $$84,960.00 Total $$8,770.00 Total $$1,745.40
Assessor’s comments
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ACTIVITY 14.
ONGOING COSTS
In activity 14 students are asked to consider when further assets (resources, equipment, and machinery, not including stock) will need to be introduced (for expansion purposes)
or replaced - estimate what the relevant replacement/additional costs will be over three years. Consider also maintenance costs and consumables. It is again recommended that
students obtain as many real world quotes as possible to ensure their resource additions/replacement list is as accurate as possible in its reflection of resource costs.
Yes No
Schedule of assets to be purchased over the next three years
Asset Cost Yr. 1 Asset Cost Yr. 2 Asset Cost Yr. 3
Computer $3,000.00 Computer $200.00 Computer $300.00
Omnilux LED machine $30,000.00 Omnilux $0.00 Omnilux $0.00
Towels $500.00 Towels $100.00 Towels $200.00
Woods lamps $1,600.00 Woods lamps $0.00 Woods lamp $50.00
Reception desk & other furniture $1,000.00 Reception desk & furniture $200.00 Reception desk & furniture $100.00
Aesthetic beds $2,000.00 Aesthetic bed $0.00 Aesthetic bed $1,000.00
Microdermabrasion machine $14,000.00 Microdermabrasion machine $50.00 Microdermabrasion machine $50.00
Microdermabrasion wands $1,600.00 Microdermabrasion wands $800.00 Microdermabrasion wands $800.00
Computer software $1,600.00 Computer softare $400.00 Computer software $400.00
Computer system $3,000.00 Computer system $200.00 Computer system $200.00
Ultrasonophoresis $670.00 Ultrasonophoresis $100.00 Ultrasonophoresis $670.00
IPL/Laser system $33,000.00 IPL/Laser system $200.00 IPL/Laser system $200.00
Camera $400.00 Camera $0.00 Camera memory card $100.00
Needling Machine $3,000.00 Needles/kit $300.00 Needles/kit $300.00
Total $ $95,370.00 Total $ $2,550.00 Total $ $4,370.00
Assessor’s comments
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ACTIVITY 15 TO 19
BASIC BOOKKEEPING
Students are asked to complete basic book-keeping activities. Though the exercises are simple, to achieve competency
students are required to demand accuracy, which is the main outcome the task seeks to test. As in any accounting
activity if any items are not accounted for appropriately errors will occur that can be costly and time consuming to
resolve. You will need to embellish details as you see fit e.g. get cheque details from bank statements.
ACTIVITY 15
PETTY CASH
Question 1 Yes No
Complete the Petty Cash Worksheet below
Instructions:
You have a $100 float in your petty cash tin. Use the purchases listed below to reconcile your petty cash.
Milk $ 1.95
Magazine $10.95
Stamps $ 4.00
Courier $ 7.50
Cotton pads $ 5.30
Petty Cash Book March
Date Qty Item Purchased from Credit Debit
Cash Opening balance $ 100.00
1/2/17 1 Milk $ 1.95 $98.05 $1.95
10/2/17 1 Magazines $10.95 $87.10 $10.95
15/2/17 5 Stamps $ 4.00 $83.10 $4.00
16/2/17 1 Courier $ 7.50 $75.60 $7.50
28/2/17 2 Cotton pads $ 5.30 $70.30 $5.30
Total for month $29.70 $29.70
Assessor’s comments
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Question 2 Yes No
A cheque is then written out to bring the petty cash float back up to $100.00. How much will this cheque be written
out for?
Bank of Western Australia
Date: 1-Mar-17
Pay: Vertual Medi Spa or bearer
Amount: Twenty nine dollars & seventy cents
$ 29.70
Signature: LaShai Howard
Chq No. 000 108
Assessor’s comments
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ACTIVITY 16
MANAGING FINANCES I
Question 1 Yes No
Sample Cheque Book: Complete each cheque in full. Make the cheques out for the following:
 Rent $1000.00
 Insurance $542.26
 Wages $760.22
Bank of Western Australia Bank of Western Australia
Date: 1-Mar-13 Date: 15-Mar-13
Details: Pay: Landlord or bearer
Rent payment Amount: One thousand dollars only
$ 1000.00
$ 1000.00 Signature: LHoward
Chq No. 000 110 Chq No. 000 110
Bank of Western Australia Bank of Western Australia
Date: 1-Mar-13 Date: 18-Mar-13
Details: Pay: Insurance Firm or bearer
Insurance Payment Amount: Five hundred forty two dollars & twenty six
cents only
$ 542.26
$ 542.26 Signature: LHoward
Chq No. 000 111 Chq No. 000 111
Bank of Western Australia Bank of Western Australia
Date: 1-Mar-13 Date: 25-Mar-13
Details: Pay: Wages, D.Mellow or bearer
Wages payment Amount: Seven hundred sixty dollars & twenty two
cents only
$ 760.22
$ 760.22 Signature: L.Howard
Chq No. 000 112 Chq No. 000 112
Assessor’s comments
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ACTIVITY 17
MANAGING FINANCES I
Question 1 Yes No
Tick off the cheques that have been presented in both your cheque book butt and your bank statement.
Cheques that have not been presented and monies not banked will need to be totalled using a bank reconciliation
form in Activity 18 and entered into your cashbook in Activity 19.
BANK OF WESTERN AUSTRALIA
Sample Bank Statement
Account 003 431 564 399 00
Solutions Medispa
For Period ended 31st March
Date Chq No Details Debit Credit Balance
01/03/13 Opening Balance 1625.91
02/03/13 000108 Petty Cash 29.70 1596.21
15/03/13 000110 Rent 1000.00 596.21
17/03/13 Dep 24 Deposit 3097.26 3693.47
18/03/13 000111 Insurance 542.26 3151.21
20/03/13 DD Eftpos Australia Rental 100.00 3051.21
20/03/13 AP Drawings 500.00 2551.21
25/03/13 000112 Wages – D. Mellow 760.22 1790.99
27/03/13 Eft Linen Warehouse 370.50 1420.49
31/03/13 Dep 25 Capital Introduced 1000.00 2420.49
31/03/13 Bank Fees 56.00 2364.49
AP Fees 3.50 2360.99
Closing Balance at 31st March 2013 2360.99
Assessor’s comments
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ACTIVITY 18
SAMPLE BANK RECONCILIATION
Question 1 Yes No
Work out the reconciliation below for entry into your cashbook.
There are two cheques, which have not been presented.
 Cheque number 000113 for power $ 70.00
 Cheque number 000109 for stock $ 345.90.
Income of $ 965.20 from the last week of March has not been banked.
Name of the Business: Period to: 31 / 03 / 2013
Bank balance as per bank statement as at the 31/03/2013 $ 2360.99
Plus outstanding deposits
Date: 17 / 03 / 2013 $ 3097.26
Date: 31 / 03 / 2013 $ 1000
Total $ 4097.26 + $ 6458.25
Subtotal = $ 5062.46
Less unpresented cheques
Cheque no. $ 345.90
Cheque no. $ 70
Cheque no. $
Cheque no. $
Total $ 415.90 - $ 4646.56
Closing cash balance as per cash book = $ 7007.55
NB. Outstanding deposits are any money received by end of period (month) and recorded in cashbook but not yet banked and
unpresented cheques are cheques, w h i c h have been issued but not yet shown on the bank statement.
Assessor’s comments
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ACTIVITY 19
CASH BOOK
Question 1 Yes No
Using the information on the previous pages to fill in the example cashbook on the following page.
1. List each cheque in number order, showing date issued, to whom issued, cheque number and amount.
2. Split the amount of each cheque across the page in appropriate columns. The details column will explain any
amounts in the other column or any other useful explanations.
3. List each deposit showing date, details and the amount split into appropriate columns if necessary.
4. The last column gives a continuing true bank balance by adding or subtracting the entry
5. Using your bank statement check off the cashbook entries to the bank statement. Then enter in the cashbook any
items shown on the bank statements, which are not already written in, e.g. bank charges, interest.
6. Total all columns to end of the month.
7. The cashbook should be reconciled to the bank reconciliation to ensure it is error free.
8. You must add any deposits to the cash book which are not recorded on the bank statement and any cheques not
presented must be deducted
Note:
1.The cashbook, a records system for a business, is separated in 2 halves: payments (cash out) and receipts (cash in) - you can't
have payments in both halves as transactions will be either a payment (left side) or receipt (right side) – ensure you calculate
GST amounts if inclusive in the price by dividing by 11. Certain payments are isolated as special reports by a second entry eg rent
is recorded under Details column and then again under Rent column.
2.There are only 3 receipts $1000 capital introduction, $3097.20 deposit and $965.20 income. There is no GST on $1000 capital
expense, drawings, wages or bank fees (and AP Fees).
3.Once you have fully completed the cashbook, use this to fill in GST section of the BAS in Activity 20(2) ie to complete BAS
activities students should just use the Total Sales and Total Purchases from your cashbook and the GST components for BAS. Do
not complete PAYG income tax installment. Do not consider Export Sales, Input tax Sales, Capital Purchases etc or any other BAS
items.
4.You may like to print out activities 17 and 18 for ease of completion
Assessor’s comments
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ACTIVITY 19 – EXAMPLE OF CASH BOOK
Date Details
Chq Amount
of
payment
GST
Insur. Rent
Phone
Stock
Bank
Wages/
Drawing Other Receipts Other
GST Bank
No to Power Fees to Balance
Claim Water Pay
1/3/2013 Balance
Forward $1,625.91
2/3/2013 Petty cash
money 108 $29.70 $2.70 $1,485.51
Opening
stock 109 $10,000 $400 $31.45 ($9,054.94)
25/3/13 Rent 110 $63,000 630 $63,000 $90.91 ($117,775.97)
17/3/13 Deposits Dep24 $3,097.26 $281.56 ($121,154.79)
18/3/13 Insurance 111 $6,500 $49.30 $6,500.00 $49.30 ($134,364.39)
20/3/13 Eftpos
Australia DD $100 9.09 $100 $9.09 ($134,582.57)
20/3/13 Drawing $500 $41,650 ($176,732.57)
25/03/13 Wages 112 $60,000 ($236,844.57)
27/03/13 Linen Eft $370.50 $33.68 $33.68 ($237,282.43)
Power 113 6500 $6.36 $2,800 $6.36 ($246,708.15)
27/03/13
Additional
Capital
introduced
Dep25 $1,000.00 ($247,708.15)
27/03/13
Income
receipts $965.20 $87.75 ($248,761.10)
31/03/13 Bank fees
paid 1400 $56.00 ($250,217.10)
31/03/13 AP fees $3.50 $3.50 ($250,224.10)
31/03/13 ($250,224.10)
Total 1129 $4,062.46 $1,369.31 $220.79 ($257,005.66)
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ACTIVITY 20
WAGE-BOOK AND BAS
Activity 20A requires students to complete the wage book provided. The wage book is to be completed for one
employee of a certain position. Record all wage or salary payments in a period. Students may embellish with
hypothetical figures.
Activity 20.B requires students to complete a BAS statement provided from the information they are collated in
Activity 15 to 19. Complete the GST Calculation worksheet to complete the GST component of the BAS form. You will
only need to record the necessary fields in your workbook.
Question 1 Yes No
Complete the wage book on the next page using your weekly tax table to work out how much tax to deduct. Enter in
the amount of superannuation to be paid into the employees superannuation fund. Remember that superannuation
is calculated on Gross wages not Net wages.
Question 2 Yes No
On pages 14 to 16 are sample copies of the GST calculation worksheet and the BAS Form. Using the table after each
sheet fill in the fields that you would need to complete on the form. For the purposes of this assessment you will only
need to record the necessary fields provided after the GST Calculation Worksheet and the Business Activity Statement.
Assessor’s comments
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ACTIVITY 20A - WAGE-BOOK
Employee Name: D. Mellow Position: Receptionist Rate of Wages
Date Amount Per
Terms of Employment 1/4/2013 $30
Full Time Part Time
Permanent Temporary
Casual
Regular Daily Breaks for meals etc. are:
Employment Commencement Date: From: 1st April 2013 To: 31st Mar 2014
Employment Termination Date: From: To:
Ordinary Total Overtime Total Allowances Gross
Wages
Deductions Net
Wages
Paid
Employer
Super
Contrib.
Employee’s Signature
Hrs Rate Amount Hrs Rate Amount Tax Total
1500 40 60000 60000 12000 12000 48000
Transfer to
W1 on BAS W2 on BAS
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ACTIVITY 20B – GST AND BAS
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GST CALCULATION WORKSHEET
Complete the table below:
No Field Name Form
Ref
Value
1 Name
2 Total Sales (including any GST) G1 180000
3 G2 + G3 + G4 G5 90000
4 Total Sales subject to GST (G1 minus G5) G6 90000
5 Total Sales subject to GST after adjustments (G6 + G7) G8 90000
6 GST on Sales (G8 divided by eleven) G9 8181.88
7 Non-capital purchases (including any GST) G11 132000(120000*1+10%)
8 G10 + G11 G12 232000
9 Total purchases subject to GST after adjustments (G17 + G18) G19 232000
10 GST on purchases (G19 divided by eleven) G20 21090
Assessor’s comments
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BUSINESS ACTIVITY STATEMENT - BAS
Complete the table below:
No Field Name Form
Ref
Value
1 Total Sales G1 180000
2 Non-capital purchases G11 232000
3 GST on Sales 1A 8181
4 GST on purchases 1B 21090
5 1A + 1C + 1E +4 + 5A + 6A + 7 8A 9000
6 1B + 1D + 1F + 5B + 6B 8B 24000
7 Is 8A more than 8B? No
8 Your payment or refund amount 9 23000
Assessor’s comments
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ACTIVITY 21
ASSETS
Students are asked to classify the assets in their organisation as current, fixed or intangible. Consider the assets in
Activity 13 and 14 and create a list of these and other assets, tangible and non-tangible. Students should attempt to
have examples of both tangible and non-tangible assets types.
Question 1
Classify the assets in your organisation into their different groups Yes No
Current assets
Current asset include cash, stock, cash and account receivables. Apart from this, wood lamps, reception desk and furniture. Camera
and needling machine can also be included in current assets category.
Fixed asset
In category of fixed assets some assets that come are computers and related system, Omnilux LED machine, reception
desk and futniture, and microdermabraison machine. Apart from this, varied assets that can be included in fixed assets
are Microdermabrasion wands, Microdermabrasion machine, aesthetic bad and Unltrasonophoresis machine can be
included.
Intangible asset
In intangible category only software’s are included in the business.
Assessor’s comments
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ACTIVITY 22
FINANCIAL PERFORMANCE AND FINANCIAL POSITION
Complete the Activity 22 short answers referring to Appendix 1 on page 22 ‘Example of Optional Completion
Statement of Financial Performance and Financial Position’.
Question 1 Yes No
Review the Statement of Financial Performance. What does the ‘cost of goods sold’ item represent? Why does it add
in ‘opening stock’ and subtract ‘closing stock’?
The cost of sold goods is direct costs that are related to the production of goods such as the material used etc. By
adding into opening and closing stock overall profit can be measured and present stock can be identified. Cost of
goods sold is the cost of merchandise that was sold to the consumer. It is reported in the income statement when
sales revenues are added in the profit and loss account.
Question 2 Yes No
Review the Statement of Financial Performance. What does the gross profit margin (percent) represent? Calculate the
Net Profit Margin and what does it represent?
Annual accounts are used to determine the profitability performance and economic position of the organization.
Gross profit margin is the profit before tax paid. GP ratio= 273900/470000*100=58.28% Gross profitability ratio is the
ratio which shows the profit percentage of the organization.
NP ratio: It is the raio which measures the net profit in the financial year.
NP ratio= Net profit/ sales*100
NP ratio= 93300/470000*100=19.85%, So it can be interpreted that enterpreneur has gathered 19.85% net profit over
its total sales.
Question 3 Yes No
Review the Statement of Financial Position. What does the Net Assets item represent?
It is balance sheet of the company that accumulates assets and liability. By looking upon these aspects overall
financial position of the organization can be determined.
Net assets= TA- TL
TA: Total assets
TL: Total liabilities
=157462-70970
=86492
Both partners have equal rights in the business so net assets amount of individual partner will be 43246.
Question 4 Yes No
Review the Statement of Financial Position. What does the Capital/proprietorship item represent? Why is it equal to
the Net Assets figure?
Capital of proprietor ratio: It is also termed as equity ratio which defines the worth of shareholders in the business. In
the given case scenario it is found that 86492 is equal to net assets figures because net assets indicates the same
value, it quantifies the results of funded amount through owner capital.
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Assessor’s comments
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ACTIVITY 23
BREAK EVEN ANALYSIS
Complete the short answers and calculation based on the figures for ‘a small dermal therapies clinic’, detailed at the
end of Activity 23.
Question 1 Yes No
What is the difference between fixed and variable costs?
Fixed cost cannot be changed by production units whereas variable gets changes as per the output produced. Fixed
cost can be termed as payments that do not get changed by making changes in the output volume. However, variable
costs changes with changing the output volume. If production volume is high than fixed cost will remain same but
variables will be increased.
Question 2 Yes No
What is a break-even analysis and why is important for owner-managers to know what their breakeven point is?
Break even analyses is the point which indicates that if company reach to this point then it can recover its expenses
and can earn the profit. It is the point which equates revenues and expenditures and gives zero returns. By calculating
the break-even point optimum utilization of resources can be measured. With the help of this managers of the
company can utilize their resources well and can make sound decision in order to enhance sales volume of the entity.
A sale before BEP can be shown as loss driven business that affect business badly.
Question 3 Yes No
Examine the following figures from a small dermal therapies clinic. Calculate the break-even (annually and monthly)
using the formula given below - note also Gross Profit Margin = (Gross Profit/Sales) x 100.
BEP = TFC*100/ gross profit margin
= 56000/216000*100
= 25.93%
= 20720/25.93%*100
= $79,920
Monthly BEP= BEP annual/ Total months in a year
==$ 79,920/12 months
= $6,660
Figures for a small dermal therapies clinic
1) Sales $216,000
2) Opening stock $ 76,000
3) Purchases $120,000
4) Less closing stock ($100,000)
5) Cost of goods sold (2 + 3 - 4) $ 96,000
6) Wages or salaries $ 64,000
7) Fixed costs $ 20,720
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Projected profits
1) Sales $216,000
8) Less Cost of sales (5 + 6) $160,000
9) Gross profit $ 56,000
10) Less fixed costs ($20,720)
11) Net profit (9 – 7) $ 35,280
(Hint: Break even = Fixed costs x 100 / Gross Profit Margin)
Assessor’s comments
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APPENDIX 1
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