BSBFIM601 Manage Finance Project: Variance Report Roleplay Analysis

This project presents a roleplay scenario where a student, in the role of a financial analyst, presents a variance report to a CEO. The report analyzes the financial performance of a business, comparing budgeted figures with actual results for the first quarter. The student identifies key areas of concern, such as unmet sales targets due to competitive pressure and sales team inefficiency, and discusses the impact on gross and net profits. The roleplay highlights cost management, forecasting errors, and the need for improved training and scrutiny of business operations. The student proposes counter measures including training programs, weekly or monthly scrutiny, and adherence to budgets to improve financial outcomes in the next quarter. The project demonstrates the practical application of financial analysis and management skills, including budget variance analysis, identification of financial issues, and the development of strategies for improvement. The student's recommendations include implementing training programs for employees to improve efficiency and skills, increasing scrutiny over business operations, and ensuring adherence to budgets to improve financial results.

Running head: MANAGE FINANCE
Manage finance
Name of the student
Name of the university
Student ID
Author note

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Roleplay
Me: Good morning Sir. How are you today?
CEO: Good Morning. I am good. How are you and How is work going?
Me: I am good, sir and I am doing fine as well and also enjoying my work.
CEO: That’s good to hear. Now let us proceeds with business first. You asked for this
appointment for presenting the variance report of the budget which was prepared for the period?
I hope your presentation is ready.
Me: Yes, I would like to thank you for takin out some time for this. Yes, I have prepared notes
relating to key areas of the budget and I would also shed some light on how we did during the
period.
CEO: Ok, let get on with it.
Me: The first thing which we need to identify is that the budget which is considered is for the
first quarter only and on the basis of the same comparison has been made with the actual results
of the first quarter. Now I found while analysing the budgets, the targets which were set by us
initially were appropriate and was quite gettable if more efforts were put into the case. But we
could not achieve most of our targets. I would be saying that we lacked in certain areas of
operation which we would be needing to improve.
CEO: What are the areas which you have identified and how much variance is there between the
actual and budgeted estimate?

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Me: Firstly, we have not meet the target for sales of the business which is a serious matter of
concern as I believe the target which we had set was appropriate. The sales target has not been
met would be due to the intense competitive pressure which our business is facing in the market.
This is the reason that the customers are divided as most of the competitors are offering the same
or similar products which we are offering. One other factor which I can identify which could
have cause us our sales target is the inefficiency of the sales team which we. I would say that our
sales team is not efficient and the reason for the same is their inexperience in this filed.
CEO: I see, but do you think the sales target which we have set for the business was appropriate
considering the current scale of operations of the business? The sales of the business need to be
enhanced so that the activities of the business can be efficiently managed thereby enhancing the
revenue which is generated by the business.
Me: No, I think the budget was prepared appropriately. The budgeted had incorporated the
market trends, our goals and objectives, and past year performance. I believe we had forecasted
the income and expenses of the business appropriately and therefore, I am saying that it was our
inability that we could not achieve the targets.
Me: The cost of operations has been properly managed by different departments and therefore
we have been able to keep the costs which is associated with the business at appropriate levels
and the same meet the targets which was det by the management. However due to low sales
estimate which the business was able to achieve, the gross profit which is actually achieved by
the business is not consistent with the budgeted target for gross profit for the business. This
covers the basis direct expenses which is associated with the business. In addition to this, I found
that some of the targets of indirect expenses were not met which is ok as I am assuming that the
same was forecasting errors. The net profit estimate of the business which is considered in the

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budget is not consistent with the actual performance of the business. Therefore, we are also short
of our targets in relation to net profits of the business.
CEO: From, the presentation what I have been able to gather is that the major area of concern
lies in the department of sales where a significant variance is present. As explained by you some
of the expenses which has been incurred by the business also shows variances which you claim
to be forecasting error. Ok I am satisfied with the areas you have identified and causes which you
have given for the variances which is shown in the actual performance in relation to the budget.
Now I would like to know what are the counter measures which we can take for ensuring that the
situation which took place does not happen again in the next quarter.
Me: That’s the area I have been working on, and I have come up certain alternatives which the
management of the company needs to implement so that the situation which happened this
quarter does not take place in the next quarter.
CEO: What are the counter measures which you have identified from the analysis and rest assure
if we are satisfied with such counter measures than I would take all the steps which is necessary
to implement the same in the business process.
Me: Firstly, I would advise the management to formulate a proper training program which can
help the employee to attain necessary level of efficiency and also aid them in skill development.
Once this is done, the performance of the sales team would automatically enhance thereby give
the company more productivity. I also believe proper scrutiny is required on your part in the
workings of the business. I would suggest that you introduce weekly or monthly scrutiny in order
to ensure that proper track is maintained for the targets. I would also suggest that the
management should ensure that the budgets which is prepared by the business are appropriately

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followed as this would also result in lowering of the costs of the business. Therefore, if such
measures are implemented than I think the business would be able meet the targets which is
established.
CEO: The points which are provided by you are valid and I believe that it can help the business
to meet its target. Submit me the report you have prepared, I would take actions accordingly.