Finance Report: Performance Analysis of Growth Management Consultants

This report provides a financial analysis of Growth Management Consultants, focusing on their performance in 2016/17. It examines the company's cash flow statement, revenue streams, and profitability, identifying reasons for profit or loss based on economic conditions and business trends. The report also outlines the company's strategic goals, including the introduction of e-books and new financial software like QuickBooks, Sage, and XERO, while addressing compliance requirements and GST obligations. It further assesses the impact of these changes on the company's financial position and future performance, highlighting the importance of effective cost management and strategic decision-making to enhance profitability. The document also discusses the importance of strategic goals and priorities for the general manager of Grow Management Consultant. It also highlights the importance of financial software for the business.

Running head: MANAGE FINANCES
Manage Finances
Name of the Student:
Name of the University:
Author’s Note

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Table of Contents
Task 2...............................................................................................................................................2
Growth Management Consultants...............................................................................................2
Finance Report.............................................................................................................................2
Introduction..................................................................................................................................2
Analysis of 2016/17 performance of the business.......................................................................2
Overall business performance analysis and analysis of the performance of each of the income
for 2016/17...................................................................................................................................3
The Compliances Requirements..................................................................................................5
Task 3...............................................................................................................................................6
Bibliography....................................................................................................................................8

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Task 2
Growth Management Consultants
Finance Report
Introduction
The current assignment focuses on analyzing the cash flow statement of Grow
Management Consultants. The analysis would help to effectively reveal the business
performance of the company over the periods. Along with the business tends of the company, the
performance of the company over the period will be considered. The assignment also focuses on
identifying the strategic goals of the business and the improvement of the company will be
reflected by analyzing the cash flow statement trends.
Analysis of 2016/17 performance of the business
The cash flow statement of the business is prepared by considering the revenue and cash
expenses which is generate by Growth Management Consultants. In order to establish the current
financial position of the company, the cash flow statement is prepared by the general manager of
the company. For the period of 2016-2017, the cash flow statement is reviewed for Grow
Management Consultants. The senior officials of the company has produced good amount of
revenue from the consultant fee and it is reflected to be $1, 175,600 which is observed to be
more than the budgeted figure. The same is reflected in the contribution to the general cash flows
of the business. The 2015-2016 trends also reflects that the decision taken by the company highly
depends upon consultants fees so as to generate inflows for the operations of the business. The
other activities which helps the company to generate revenue with reference to actual results
does not coincide with the budgeted figure which is projected by the management of the
business. The above statement reflects that there are significant differences in the actual figures
and the budgeted figures. These differences is considered as the fault of judgments on the behalf
of the company’s management.
Overall business performance analysis and analysis of the performance of each of the
income for 2016/17
The management of the company prepares the income statement that reflects the main source of
revenue that is the service provided by the company. The overall revenue of the business is
observed to be in increasing trend but at the same time the profitability of the business is
observed to be declining. It is due to the increasing cost of the overall operations of the business.
Therefore, in order to increase the profitability of the business, the cost of the business
operations needs to be controlled. The income statement prepared by the senior officials of the
company reflects that the company is performing well enough. This is illustrated by considering
the profit and the significant growth off the business. The company generates the maximum
amount of income from the service (consultation) provided by the company. The consultation
service is one of the main source of the revenue and thus, the management is required to take
appropriate steps in order to enhance the profit of the business.
Reasons for profit or loss based on your analysis of the data and research on economic

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conditions and business trends
The main purpose of preparing the income statement is to determine the profitability of
the business while undertaking the different operations of the business. The profit and loss
statement of the company reflects that the consultation service generates maximum income for
the business. There are other various activities which act as a main source of income for the
company, as reflected in the income statement of the business. The profit and loss statement
reveals the profitability position of the business and also projects the expenses and revenue
incurred during the business period. There are other external forces which has a significant
impact on the various operations of the business. The external factors include the competition in
the market, inflation rate, labour rate and other factors which puts a great impact on the revenue
and profitability of the business. The external factors should be considered by the company in
order to effectively carry out the business operations and overcome the obstacles.
Strategic goals and priorities
The general manager of Grow Management Consultant aims at conducting a conference in order
to replace the workshop in the business. This initiative would make the operation more effective
for the business. In order to bring efficiency in the various operations within the organization the
replacement of the workshop is necessary and also making new changes in the internal process
of the business. The company aims at introducing e-books in order to generate more revenue for
the business. The e-book proposal is considered by the senior management of the company in
order to improve the overall work process of the business operations. The company also aims at
incorporating new software in the business for recording financial transaction and report
generation for the business. The reports helps the management to make appropriate decisions for
effectively carrying out the business. It is anticipated that the new changes would give new
structure to the company and probably would improve the business operations.
Cash flow statement analysis
The cash flow statement reveals the cash flow trends and it is considered to be highly important
as it helps the management to take appropriate decision in terms of liquidity position of the
business. The strategic goal of the business aims at enhancing the profitability of the business by
introducing new innovation in the business operations. The cash flow trends reflects that the
business is capable of generating enough cash inflows from the various operations of the
company. This also reveals that the business is capable for maintaining its liquidity position in
the organization and therefore, which is good for the management for make further important
decisions. The overall analysis of the cash trends reflects a positive sign which clearly indicates
that the business has sufficient amount of fund for making further investment in new projects.
This initiative would help the business to meet the current liabilities of the company.
Financial Software
The three software the business could use and their advantages and disadvantages
The technological advances has the business operation much easier and faster. The
accounting software is an important software which must be used by the company. The software
used helps the company to generate reports for making important decisions with reference to the
different operations of the business. The technological advances could bring efficiency in the
business operations, it helps in improving recoding framework. This approach promotes
transparency and accountability. As per the given information the finance department of Grow
Management Consultants uses MYOB software in order to formulate the financial reports. There
are other advanced software which could be used by the company for the same function are
demonstrated below with their advantages and disadvantages:

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QuickBooks
This is another software which could be helpful for the management and can replace the
current software of Grow Management Consultant.
Advantages
 The QuickBooks software is very easy and efficient to use and access as well. Most
importantly it is user friendly.
 The software is well-known for generating correct accounting records with least error.
Disadvantages
 The software lacks some specific features which is essential in the some industry and
business. Therefore, the software cannot be used in some industries.
 The software doesn’t provide any direct access to the professional support which means it
is difficult to implement.
Sage
Sage is an effective alternative software which is available and highly useful in the
companies. It is a potential accounting software which can be used by the management of Grow
Management Consultation.
Advantages
 The software is highly cost-effective and therefore, it can reduce the cost of the company.
 The sage software aims at following a suitable pattern in order to generate reports as, it
provides paperless reports.
Disadvantages
 The sage software installation can be challenging, which shows that the software is very
difficult to use and is not user friendly.
XERO
There is another alternative for MYOB that is XERO, which is considered to be one of
the most popular accounting software used by the companies.
Advantages
 The XERO software easily converts the currency values of the transactions occurred in
various countries. Therefore, it helps in international transaction for the companies.
 The software is found to be sophisticated and easily accessible which make the software
user-friendly.
Disadvantages
 The software is slow and it is difficult for large companies to work with XERO software.
 The software is very costly and therefore, is not used by many companies.
The Compliances Requirements
The directors of the business set up a meeting which would be dealing with the current
budgeting practices and adopting new budgeting practices for the organization. The discussion in
the meeting would be mainly on improving the various operations of the business and the ways to
improve the profitability of the business. The management of the company aims at discussing the
GST liability which the company aims at incurring on their goods which is sold by the business.
The GST obligations have a direct impact on the various operations of the business and the
various ways the management of the company handles the tax related payments of the company.
Moreover, the management also aims at applying the Pay as You Go Scheme in order to maintain
the tax liability over the business period. The PAYG withholding incremental obligations is
needed to be paid by the company to the Australian Tax Office for incremental amounts. The

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company must meet with the compliance requirements in order to operate the business fairly and
cover the tax obligations. It is quite authoritative for the company to finalize the PAYG
instalments before the management files the income tax returns on a quarterly basis. The company
has to cover the superannuation charges for all the consultants. This is an important initiative the
business should implement in the company.
Communication with the Directors
The senior accountant creates the budget of the company and hence it is based upon the
estimation available for the management of the company after referring to the financial results of
the previous years. The budget reflects a new source in order to create income, it is through
providing conference and e-books. The revenue generated would help the business to improve its
performance and stabilize its financial position in the market. The business anticipates an
increase of 10% in the sales of their business, this would probably help the management to
generate more profit in the business. Moreover, a 5% increase in the cost of sales is expected by
the operation of the company. It would be beneficial if the company proceed with the e-book
proposal as the estimated cash-flow is positive. This reflects the feasibility of the new project in
the business. The new transitions in the business from the manual books to the e-books is a long
process but a beneficial one Therefore, the company must look forward with the e-book proposal
and must develop strategy to effectively implement the new proposal.
Task 3
The actual results for the year 2017-18 reveals that the profits which is generated by the
management of the company has increased and the same is shown to be more than the
expectations of the management which shows that the management of the company has
significantly improved the production process of the business. The gross profit margin for the
business is shown to be better than the budgeted estimate which shows that the business is doing
extremely well in terms of managing the profitability aspect for the business. The performance of
the business is also shown to have deteriorated when it comes to surplus which is generated by
the business. The management of the company needs to improve the costs structure of the
business so that the surplus which is generated by the business can be improved significantly.
This would also ensure that the business is able to achieve growth in its operations of the
business.
In terms of the discrepancies which can be identified between the budgeted and actual
performance of the business is mainly related to the expenses which is still high in terms of
expectation of the management of the company.
Revised Conference Budget
Grow Management Consultants Pty Ltd
Budget Forecast
July 17 to June 18 Total

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Budget
INCOME
Consulting fees 1,551,792
Conference 52,500
E-book 10,000
Executive search 158,400
NET INCOME 1,772,692
EXPENSES
Salaries/wages 529,200
Superannuation 66,150
Cleaning 10,584
Accounting fees 6,615
Advertising and marketing 5,513
Contract writer (e-book) 12,128
Computer software 4,410
Motor vehicle expenses 4,410
Utilities 4,410
Insurance 4,410
Office supplies 1,654
Lease/loan payments 1,433
Rent 47,363
Sundries 2,205
Travel and Accommodation 5,513
Conference venue and catering 5,250
Speaker fees and travel 10,500
Marketing (conference only) 5,250
Conference bags 1,050
Conference casual project officer 31,500
E-book 10,500
Desktop publishing 3,150
Marketing (e-book) 1,260
Repairs & maintenance 1,654
Telephone 3,308
TOTAL EXPENSES 779,418
SURPLUS/ DEFICIT 993,274

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Bibliography
Faleiros, D.R., Álvares, J., Almeida, A.M., de Araújo, V.E., Andrade, E.I.G., Godman, B.B.,
Acurcio, F.A. and Guerra Junior, A.A., 2016. Budget impact analysis of medicines: updated
systematic review and implications. Expert review of pharmacoeconomics & outcomes
research, 16(2), pp.257-266.
Hashim, A.W., Hanafi, I., Fitrianto, A. and Darwish, H., 2014. Roles of budgetary participation
on leader's performance: A study case in ternate. Asian Social Science, 10(12), p.35.