Financial Resources of a Selected Organization

[pic] Describe the recruitment documentation used in a selected organization Recruitment is the process of hiring, attracting, short listing and selecting the candidates for jobs within a company. In STEMCOR, HR manager find the demand of employees within organisation and fill vacancy through recruitment process. In STEMCOR, HR manager find the demand of employees within organisation and fill vacancy through recruitment process.

Unit 02: Business Resources
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Table of Contents
Introduction..................................................................................................................................3
P1. Describe the recruitment documentation used in a selected organization..........................3
P2. Importance of Employability skills and Personal skills.......................................................11
P3. Physical and Technological Resources of Stemcor..............................................................14
P4. Produce a formal report to the Board of Directors describing the internal and external
financial resource management and evaluation..........................................................................16
P5. (a) The current break-even point and chart for Scrumptious...............................................17
P5 (b) Budget and its importance in Scrumptious Cupcakes.....................................................19
P6. Income statement, balance sheet evaluation.........................................................................21
P7. Uses of ratio analysis and its interpretation..........................................................................23
Conclusion..................................................................................................................................27
References..................................................................................................................................28
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Introduction
Business resource is the economic and productive factor which is required to
accomplish an activity by following this factors. Resources planning helps small business to
manage resources perfectly that help to maintain the productivity in organization. The
organization should focuses on business resources in order to perform the business activities
(Burger and Luke, 2017) . It is very important for organization to manage all resources for
running a business within enterprises. Business resources are defined as human resources,
capital, labor and financial resources which help to attract the customers. Without business
resources a company can not run in market place as it need to arrange the resources for entire
business. To know about business resources STEMCOR has been selected that is steel trading
and distribution company . It was founded in 1951 that is a leading independent services
provider for steel industry. The current report is about business resources that help to face the
competition and maintain profits. This report will also discusses about different topics such as
recruitment document, importance of employ ability and personal skills, physical and
technological resources and formal report to board of directors by describing internal and
external financial resources management which impacts on business.
P1. Describe the recruitment documentation used in a selected organization
Recruitment is the process of hiring, attracting, short listing and selecting the
candidates for jobs within a company. The manager of an organisation gives vacancy
advertisement through different sources such as websites, newspapers and social media that
help candidates to know about vacancy. In STEMCOR, HR manager find the demand of
employees within organisation and fill vacancy through recruitment process.
Recruitment documentation is a templates that provides information about vacancy,
role and responsibility which is required within organisation. Moreover, it helps employer to
manage the application, interviews and selection process to adding new staff. In other words,
this is document which is used by managers to maintain the recruitment system by hiring best
candidates in company. Such as STEMCOR prepares recruitment documentation to hire the
employees that help to run a business successfully.
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Job advert: This is a print or electronic notification of a proposal to recruit new
candidates to perform particular job profile within organisation. This is used by employers to
request applications from the public and targeted candidates as it requires in business industry
(Burns, 2016). Such as the manager of STEMCOR use job advert to influence people and get
them apply for job role or vacant profile. This is important for organisation as it attracts right
candidates for performing particular job role by using skills and experience.
Preparing the job description and job specification
Job description: This is a informative document which is prepared by managers to
define the scope, task, duties and responsibilities within organisation that need to perform.
Such as the manager of STEMCOR prepares job description for vacant profile by giving all
information.
4

Job specification: This is a written statement that states specific qualification, qualities,
experience level, technical and communication, emotional and skills required to perform job
responsibilities. In STEMCOR, manager defines qualification, skills and experience which is
required in company.
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Position Available: This means job title or position which needs to be held by an
employee to fill the vacant post (Cascio, 2015). In other words, it can be define in level of
position or responsibilities of person that need to be hold by a person.
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Short listing the candidate: This means scrutiny of resume or application which
matches with required skills and experience for desire profile. Such as the manager of
STEMCOR view the application and reject who does not match with needs and wants.
Letter of invitation for interview: This is the process which is doing by manager after
short listing the candidates in organisation (Cosgrove and Rijsberman, 2014). In STEMCOR,
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manager accept the candidate's application which matches with skills and sent them call letter
for attending the interview.
Application Form: This is the first form or round of getting interview of selected
candidates. Employers get background, knowledge, and other related information through this
form. This form help STEMCOR to know about candidate's information and prepare
questionnaire for interview.
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Interviewing the candidate: This is the process of getting the interview by asking
questions which relates to job role and responsibility within organisation.
 Tell me about yourself?
 What is your short term goals:
 Have you any work experience?
 Why you want this job as Machine operator?
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 Why should hire you?
Making the hire: This means organisation select the candidates for performing the job
after getting interview within business industry. Such as STEMCOR conducts interview round
and select the best applicants for performing the job role and responsibilities in business entity.
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P
2. Importance of Employability skills and Personal skills
There are three criteria that must be met to be employed for the position (Kotler, 1979).
Employment skill criteria: This means skills which is needed for performing specific
job role within organisation. Such as the employer set the criteria for hiring the candidates for
performing the job role. It involves specific qualification, skills and experience that help to
understand the role and responsibility in company.
Past experience criteria: This means past information of employees that states in
which organisation employees has worked and how much times. This is very important for
organisation as it help to make correct decision for employees and also help to perform the
business activities in entire organisation (Erasmus, Strydom and Rudansky-Kloppers, 2016).
Such as manager of STEMCOR get the information from employees about past employing
details in order to make business decision or hiring right person within organisation.
Personal skill criteria: This means personal skills and knowledge which is required
within organisation to accept the challenges and implement them by using own skills. This
skills influences employers as well as others to increase the production and profitability within
organisation. In STEMCOR, managers evaluates employee's personal skills that help to
address the problems and leads to increase the productivity.
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Employability skills
Qualification: The selected candidate must have the right qualification for the
particular role and to carry out the responsibilities and task given for that job role. In
STEMCOR manager find the skills for mechanic who can operate the machine easily.
Experience: The candidates need to have experiences in related field for minimum
periods of time. The experienced staffs provide better performance, give information about
competitors, and bring knowledge and information from diverse environments. Additionally, it
help to solve the difficulties which are arises within organisation.
Product knowledge: General knowledge about bakery products are desirable but not
essential. Proper training will be provided to the selected employee. It help to create the
confidence in front of customer in order to sell the products and services (Inman, 2016).
Personal skills
Hardworking: A hard-working staffs can finish the tasks given on time and manage
the tasks properly. Thus, they can gain an improved performance in workplaces. It is vital for
machine operator to be hard-working as a hard working person who put all his efforts in
performing his work. Working hard means never give up too early and give the best result in
order to achieve the task. In STEMCOR employees are hard working who make efforts to
complete the targets and increase the production.
Flexibility: This is most important in workplaces including Greggsplc because a staff
need to work for different shifts in different days of the week. It is also important for Greggs to
fill in the staffs shortage and skills gap in workplace. Changes often take place in our
surroundings and it is necessary for everyone to be adapting or flexible according to the
requirements. This skill help to accept the changes and technology which can be occurs in
entire business.
Team player: the staffs must be good team players because a good team work give a good
performance. Thus, staff must be supportive, helpful and friendly in the workplace. A team
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player has so many qualities like hard working, adapting, supportive, enthusiast and reliable. It
help to achieve the goals with the help of all employees.
I think that I have all of the required criteria to be employed for the position. The
recruitment letter specifies the minimum CGPA, years of past working experience in the
relevant job, and the personal skill required for the better accomplishment of the job. All of
these required criteria are met by my resume which is given below.
Resume
John apply in the Stemcor organization for the post of Machine operator and it's resume
mentioned below:
Resume
Name: John
Address: Green City, United Kingdom.
Contact number: 2316525698
Job Experience: 1 years working experience as a Machine Operator in the XYZ company.
Specialization & Skills:
 Have experience as a Machine Operator.
 Have ability to read Blueprint.
 Detailing in their work.
 Computer knowledge.
 Mechanical knowledge.
 Communication
Qualification:
 B.tech from Oxford University.
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 Senior secondary from St. Mary School, London.
 Secondary from St. Mary school, London
Declaration: Hereby, Above mention all the details are correct which is provided by myself.
Date: 20/06/2019
Place: United Kingdom
P3. Physical and Technological Resources of Stemcor
Main physical resources of Stemcor
Physical resources are known as tangible resources which are maintained by an
enterprise for the purpose of carrying out numerous activities in effective manner. These
resources have value, takes space as well as used for performing operations at workplace. Such
resources are necessarily important for Stemcor in order to provide products for sale purpose
along with achieving profits (Le Breton–Miller, and Miller, 2015). Selected company is
product based business which uses physical resources such as building, materials, equipment
as well as machinery and so on to facilitate manufacturing of steel products and at the same
time delivering the same to multiple customers. Chosen company operates its business in all
parts of world due to which it is a difficult task to identify key physical resources of such firm.
Important physical resources used by this organisation are as follows:
Building: Stemcor performs numerous operations in daily life cycle related to trading
as well as distribution. For such purpose, organisational managers are required to keep the
stock of raw materials along with finished goods at warehouses. So, in order to manage
inventory, buildings are used as warehouses as well as stores. Lots of stores are opened which
helps in providing diversity along with variety and at the same gain interests of clients to
deliver services.
Equipments and machinery: In order to manufacture products as well as delivering
raw materials to different clients organisations require to maintain their equipments and
machinery in appropriate manner. Equipments along with machinery at selected company
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includes hardware tools, computer system, inverter batteries, dragline excavator, loaders and
many more. All such are required to load heavy steel raw materials in vehicles as well as
managing stocks at warehouses.
Vehicle: The company uses vehicles for supplying raw material to clients as well as
delivering products to end customers (Pape, 2016). Selected enterprise uses various vehicles to
provide steel goods on large scale to wide distant locations. Heavy vehicles such as trucks,
cranes and more are used for such purposes
Main technological resources of Stemcor
Technological resources are also those resources which are intangible in nature but
plays important role in manufacturing as well as delivering goods to customers at distant
places. In order to deliver online services such resources are important for Stemcor. These
resources helps in protecting copyright of any company along with prevent other to use the
advertisements, properties or logo.
Intellectual property: Selected company have intellectual property which helps in
protection by legislations of other countries in which they are performing operations. Property
related to organisational logo is created as well as put on website which will protect against
any case of copyright. Managers of chosen enterprise uses copyright to insure others not to use
the same (Reynolds and Yetton, 2015). Furthermore, such resource protects advertisements
which are part of business. Thus, Stemcor uses such technological resource to prevent others
from using their properties, logo or advertisements which they want protected.
Software licences: This is another technological resources which is a legal instrument
which provides legal guidelines related to use or distribute software. Software licence provide
chosen company with the right or authorities without violating copyrights. For example, this
organisation has site licence, workstation licence, proprietary licence, general public licence
and so on. These software ensures strong as well as protected business in the thriving economy
and helps in gaining funds along with protection by law. Without these software organisational
managers can not successfully run their business as these ensures completion of tasks on time.
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P4. Produce a formal report to the Board of Directors describing the
internal and external financial resource management and evaluation.
To
Heather and Annabel Dean
Scrumptious Cupcakes Ltd.
Wales.
Subject: Available internal and external sources of fund for scrumptious cupcakes ltd.
Dear sir/madam,
I have been informed that the organisation is not effectively managing its internal as well as
external financial resources. The main internal financial resources existing capital, sale of
products, debt collection as well as profits and on the other hand external financial resources
are loan capital, factoring, lease financing and share capital. The profitability ratio is low as
compared to budgets and the managers are not able to pay the debts on time period which
declines the sales of cakes and other products. The company has achieved negative variances
in the fixed capitals. The company managers has used funds in promotional activities and has
not must benefited from such decision. It has been evaluated that the organisation is not
achieving required profits which hampers there day to day activities along with workers
potentiality to perform operations in effective manner.
Sincerely Yours
XYZ
P5. (a) The current break-even point and chart for Scrumptious.
Break even point represent the unit of sales or sales amount which required to analyse
by the Scrumptious to cover all the costs such as fixed or variable. In this points, there is no
profit or loss situation because organization just cover their manufacturing cost. Further
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increment in the units will be consider as revenue and below the standards units will be
consider as loss (Scholes, 2015).
Calculation of break-even points of the Scrumptious company and charts will be draw
for the understanding of financial information. For calculating break even point and
representation of charts of the company mentioned below:
Particulars Amounts
Fixed cost £4300
Variable cost £.60
Selling price per unit £1.75
Break even point = Fixed Cost / (Sales per units – Variable cost )
So,
Break-even point ( Units) = 4300/ (1.75 - .60)
= 3739 units
Break even sales = Break even points * Selling price per units
Break- even point (value) = 3739 * 1.75
= 6543.48 pounds
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Interpretation:
From the above calculation it has be interpreted that, company have to sell 3739 units
for the no loss or no profit condition. Here, they cover all their fixed cost which occur at the
time of production that is 4300. After covering all the fixed as well as variable cost,
organization is able to generate profits. Sale of 3739 units will be generate the 6543.48 pounds
of value for the business which includes the profit margin of the company. So, manager have
to ensure that, if they wanted to increase their productivity or profitability then they have to
sell 3739 units to cover all the cost and generate profits.
Re-calculation of Break-even point
After few changes in the value of fixed or variable cos, here is the calculation of new
break even point.
Particulars Amounts
Fixed cost £4100
Variable cost £.55
Selling price per
unit
£1.75
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Break- even point (Units) = 4100 / (1.75-.55)
=3417 units
Break-even point (Sales) = 3417 * 1.75
= 5979.17 pounds
Interpretation:
From the above re-calculation of break even units is 3417 which is lower then previous
calculation. Means, manager have to sell less units to cover all the cost after increasing the
units organization is able to generate profit.
P5 (b) Budget and its importance in Scrumptious Cupcakes
Budget
Budget is the value which estimate the revenue for the organization for the future
planning (Shenkar, , Luo and Chi, 2014). It estimate the revenue or expenses related to the
operations which will be specified for the specific time period and it will be re-evaluated on
periodic basis. There are two different parts which include the budget revenue as well as
expenses planning.
Essentials of monitoring the budget
Budget is important for the small as well as large organization because with the help of
this, they can achieve their business goals & objectives. Manager analyse the actual
performance of the organization with the current performance. If the actual performance not
able to coincident with the budget then manager have to take necessary actions for the
improvement. Therefore, budget is important for the scrumptious cupcakes for the estimation
of revenue or expenses.
Problem with scrumptious cupcakes’ budget and recommendation for it
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There are various problems which face by the scrumptious cupcake’s budget and it will be
discussed below:
 Negative variance of the sales
 Negative variance of the Fixed Cost
 Negative variance of materials and other elements
 Low profit margin in comparison to the budget
 Negative utility and other cost variance
Recommendations for the problems are given below.
 Need to control variable cost and deliver products on time.
 Identifying other suppliers for the raw martial purchase.
 Increase labour efficiency.
 Reduce the wastage of material in the production.
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 Maximizing the control over the cost
 Using aggressive marketing to increase the sale
Need for Controlling Budget Properly:
 Firstly need to note accurate net income
 Track their daily expenses and record properly.
 Set their short term goals and develop proper plan
P6. Income statement, balance sheet evaluation
Financial statements are the lens on the business. Financial statement provides the
overall picture of the company. There are different types of financial statements like-income
statement, balance sheet and so on (Tehseen and Ramayah, 2015).
Purpose of income statement
Income statement clearly states profits or losses of any company. Total expenses along
with revenues are listed in systematic manner in income statements. Purpose of such statement
are to provide information related to performance of financing earning with the financial year.
Parts of the income statement
Income statement includes following parts:
Revenues: It encompasses the money received from selling selected organisational
products.
Cost of Goods Sold: It is related with direct costs in production on goods which are
offered by chosen entity. It include direct material, direct labour, and other resources which are
indulge in production process (Thompson, Strickland and Gamble, 2015).
Gross profit: It includes difference between receipt of revenue less cost of goods sold.
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Operating expenses: the amount spend on maintaining along with operate the general
business and is related with research and development, general and administrative, marketing
of intangible assets.
Users:
The users of the income statement are the stakeholders of the company like-
Shareholders: Uses such statement to assess the risk along with return.
Investors: These are interested in potential profits along with security on investments made by
them.
Suppliers: These supply raw material as well as necessary information about market. They
uses income statements to understand the position of the company.
Customers: Uses such statement to analyse whether company will provide products in future.
Government: Government keeps a watch on organisational profits through financial
statements.
Management: Management uses financial statements to analyse the position of company in
competitive market and to take budgeting decisions.
Balance sheet, its parts and the user
Purpose of balance sheet
Balance sheet is also known as the statement of financial position. It measures the financial
position of the company.
Parts of the balance sheet
There are three parts in the balance sheet like-asset part, liability part, and the owner equity
part. Asset part shows the total assets of the company (Angbazo, 1997). Liability part shows
the total liability of the company. And the equity part shows the owner equity of the company.
The purpose of balance sheet is to show the asset, liability, and equity figure of the company.
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Users
The users of balance sheet are the investors, employee, suppliers, customers, government,
shareholders and the management of the company.
P7. Uses of ratio analysis and its interpretation
Ratio analysis is used to evaluate the financial performance and position of the
company. There are different types of ratios that can be used to evaluate the company (Altman,
1968).
Profitability ratio: This means a ratio or calculation that help to9 define the ability of
company by generating the profits within organisation. It is calculated by managers to know
the profit margin of company. It compares income statement accounts and categories to show
organisation's ability to create the profits from its operations. It focuses on company's return on
investment in inventory and other assets.
Gross profit ratio: This is the profitability ratio that states relationship among gross
profit and net sales revenues. This is effective technique or tool which is used to evaluate the
operational performance of business. It help to assess the company's financial position or
health by revealing the amount of money. This is used by all organisation to know the
profitability of entire business make further business decision.
Gross profit margin = (Gross Profit / Sales Revenue) * 100
= (1, 00,000/2, 20,000) * 100
= 45.45%
Interpretation:
Gross profit help the organization to identify their revenue which generated from the
operation. Higher the gross profit is beneficial for the organization and currently company
have 45.45% which is good.
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Net profitability ratio: This ratio is used to calculate the net profit within organisation
that help to define the profitability situation. It expressed as a percentage but also can be
represented in decimal form. It help organisation to maintain the profitability position by
defining the ratio and make further plans.
Net profit margin = (Net profit/Sales Revenue) * 100
= (42900/220000) * 100
= 19.5%
Interpretation:
Net profit margin represent the net revenue generated by the business after all the
expenses. It includes the expenditures as well as revenue which generated from the
manufacturing and administration. Current company have 19.5% net profit margin which is
beneficial for the business to sustain for the longer period.
Return on Capital Employed: It is the profitability ratio which help the organization to
measure the efficiency or effectiveness. Which further helps in increasing productivity or
profitability of the business. It is an long term profitability ratio which consider long term
financing. For the calculation, it required operating profit or capital employed which help the
organization to identify return on capital employed.
ROCE = (Operating Profit / Long Term Capital Employed) * 100
= 42900 / (31000+20000)*100 = 84.12%
Interpretation:
Return of capital employed measure the current position of the organization with the
help of total assets and liability which help the organization to identify their returns.
Liquidity ratio: It is important for the financial metrics to determine the ability to pay
their obligations. In this ration, management try to pay their all debt without taking financial
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helps from the outside of the organization. It includes those ratios which help the organization
to to pay off their debt in short period and some of it discussed below:
Current ratio: It is the liquidity ratio which represented that, it measure the
organizational ability where they have to pay short term debt. It is important for the business to
maintain internal resources to pay of their obligation. It includes the current assets & liability
which required for the calculation of current ratio. Ideal current is 1:1 where organizations
have to maintain equal assets to pay of their debt. Manager of the company have to maintain
because high or low both not beneficial for the company (Xu, Huo and Sun, 2014).
Current Ratio = (Current assets / Current liabilities)
= 14000/18000
= 0.78
Interpretation:
Current ratio help the business to identify their liquidity in the organization because
they have to maintain enough amount of assets to pay of their liability. Ideal ratio is 1:1 but
currently business have 0.78 which is lower then the standard. So management have to
increase assets to maintain liquidity in the company.
Acid Test Ratio: It is also called quick ratio, it is quickly converted into cash because
it exclude the stock which take longer time to covered in the finished goods.
Acid Test Ratio = Current Assets (excluding Inventories) / Current Liabilities
= 11000 / 18000 = 0.61
Quick ratio = (current asset-inventory)/current liability
(14000-3000)/18000 = .61%
Interpretation:
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Quick ratio represent the more liquidity which exclude the inventory from the current
assets. With the help of this, organization can quickly pay their obligation without waiting for
the sale of inventory which is time taken process.
Gearing ratio = total interest bearing liability/shareholders’ equity
= 20000/31000 = .65%
Interpretation:
Gearing ratio help the organization to identify the shareholder's proportion of the
organization. Basically it helps in evaluating proportion of debt and equity in the business.
Efficiency Ratios
Stock Turnover = (COGS / Average Inventory) * 365
= (3000/120,000) * 365 = 9 days
Interpretation:
This Ratio help in measuring how much time will taken to convert stocks into finished
goods and prepare for the further sales. Here, higher turnover is beneficial for the organization.
Debtor’s Collection Period = (Trade Receivables / Average Accounts Receivables) * 365
= (4000 / 220000) * 365 = 7 days
Interpretation:
Debtor's collection period represented that, how quickly they collect their receivables
which is beneficial for the organization. So they further pay their debt.
Asset turnover Ratio= Sales Revenue / Long Term Capital Employed
= 220,000/ (31000+20000)
= 4.31 times
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Interpretation:
Assets turnover ratio shows the ability of the management to use the asset. Here, the
high asset turnover efficiently and productively shows the better efficiency of the company.
Gearing Ratio = [Long Term (Non–Current Liabilities) / Capital Employed] * 100
= 20000/51000*100
= 39.22%
Conclusion
From the above discussion, it has been concluded that for the successful outcomes
organization have to use various resources which helps in increasing productivity or generating
more revenue. In addition, it includes the employability as well as personal skills which
required for the execution of various operational activities and recruitments practices.
Company need to identify physical or technical resources which help the organization to grow
further. In addition, calculation of break even points help the business to identify their
minimum limit to sell their products. Along with this, ratio analysis help the manager to
analyse their financial position which required at the time of taking decision. It is required by
the manager to develop effective strategy for the market growth.
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References
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