Financial Plan and Report Analysis: BSBFIM801 Assessment 1 Details

This report presents a comprehensive financial plan and report for a new business venture, addressing key financial aspects as per the BSBFIM801 assessment requirements. The report begins with a projected balance sheet and income statement, detailing assets, liabilities, equity, sales, co...Read More

BSBFIM801
MANAGE FINANCIAL RESOURCES
Assessment 1
Submitted by:
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<Student Id>

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Table of Contents
Part 1..........................................................................................................................................2
Financial Plan.........................................................................................................................2
Part 2..........................................................................................................................................2
Financial Report.....................................................................................................................2
Breakeven Analysis....................................................................................................................4
Products or services................................................................................................................4
Forecasting technique.............................................................................................................4
Analysis of forecasts..............................................................................................................4
Statutory requirements...........................................................................................................4
Collection of comparative and trend information to support budget.....................................4
Negotiation strategy to acquiring funding for business project.............................................4
Records maintained to ensure up-to-date information about resource allocations and usage5
Reporting budget performance and expenditure....................................................................5
Risk return analysis................................................................................................................5
Budget monitoring.................................................................................................................5
Part 3..........................................................................................................................................5
Explain the reports that require lodging by this company according to the Australian
Security and Investment Commission (ASIC).......................................................................5
Analyse these financial records by applying the horizontal and vertical analysis methods. .5

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Explain whether you think that the organisations financial decisions will serve to meet the
organisations planned outcomes............................................................................................6
Conclusion..................................................................................................................................6
References..................................................................................................................................7

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Part 1 & Part 2
Financial Report
STATEMENT OF FINANCIAL POSITION
Projected Balance sheet
As at 31st March 2019
Particulars Amount
Assets
Current Assets
Bank A/c
$
45,274.00
Other current assets
$
25,000.00
Total current assets
$
70,274.00
Non-Current Assets
Espresso Machine
$
10,800.00
Coffee Grinders
$
2,700.00
Blenders
$
2,150.00
Food service equipment
$
27,900.00
Inventory
$
18,950.00
Cutlery
$
5,000.00
Office Equipment
$
5,600.00
Total non-current assets
$
73,100.00
Total Assets
$
143,374.00
Liabilities and the Shareholder's Equity
Capital
Abey
$
25,000.00
Barley
$
15,000.00
Chillzy
$
7,500.00

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Add: net profit
$
26,774.00
Total Capital
$
74,274.00
Current Liabilities
Accounts Payable
$
19,100.00
Total current liabilities
$
19,100.00
Non-current liabilities
Bank loan
$
40,000.00
Unsecured Loans
$
10,000.00
Total Non-Current Liabilities
$
50,000.00
Total Liabilities
$
143,374.00
Projected Income statement
(for the months ending at 31st Mar 2019)
Particulars Amount($)
Sales $ 113,260.00
Cost of Goods sold $ 39,168.00
Gross Profit $ 74,092.00
Less: Expenses
Advertising $ 4,590.00
Insurance of supplies $ 3,400.00
Interest expense $ 2,408.00
License costs $ 3,186.00
Rent $ 4,800.00
Repair and Maintenance $ 4,564.00
Salary $ 18,000.00
Telephone $ 3,500.00
Utilities $ 2,870.00
Net Profit $ 26,774.00

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Cash Budget
Particulars Amount
Inflows
Sales $ 67,956.00
Total Inflows $ 67,956.00
Less: Outflows
Advertising $ 4,590.00
Insurance of supplies $ 3,400.00
Interest expense $ 2,408.00
Repair and Maintenance $ 4,564.00
Utilities $ 2,870.00
Fixed assets purchased
Coffee Grinders $ 2,700.00
Blenders $ 2,150.00
Total Outflows $ 22,682.00
Net cash flow $ 45,274.00
Cash balance at the beginning $ -
Cash balance at the end $ 45,274.00
Breakeven Analysis
The breakeven analysis is the technique which is adopted to find out the minimum sales that
is required by the business to be followed so that the coffee bar is at least in a situation of the
no profit no loss.
Fixed Costs $ 77,146.00
Contribution 12.00
Breakeven point $ 6428.8
The breakeven point determines that the Fusion Coffee bar must sell around 6428 units in
order to be in a situation of the no profit and no loss (Hatch. et al 2017).

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Products or services
The business in engaged in the sector of the food and the beverages. Currently the business is
selling different types of Coffee such as Mochaccino, Flat White, Cappucino, Irish Coffee,
long black, along with the snacks like sandwich, nachos, burgers, breads and toasts, Maggi
and rolls also with mock tails, fresh juices In terms of the services the company is engaged in
delivering the quality snacks and beverages along with classified interior. Customers can also
have a wide range of relaxing experiences such as live music and the games and sports
(Rodríguez, et al 2017).
Forecasting technique
The types of the forecasting that has been used in preparing the financial forecasts are straight
line method of the forecasting. This is one of the easiest and the simplest and the easiest
method that tends to predict the future of the business in terms of the revenue and the cash
inflows as well as the outflows of the business (Kostmann and Härdle, 2019).
Analysis of forecasts
The forecasts can be analysed on the basis of the historical data of the similar companies in
the data along with the performance of the company. In terms of the figures the growth rate
can be calculated based on which the future revenue and the expenses will be dependent. The
market research will also help which can list the specific product or the service catered by the
Fusion Coffee Bar (Johnston, 2017).
Statutory requirements
The statutory requirements required delivered by the Australian Securities Exchange Board
are that planned expenditure must not be exceeded from the resources available to the Fusion
Coffee bar. In case the bar fails to set the budget within the resources available, may lead to

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the cease of the operations of the bar. Every year the budget is required to be prepared to be
in the light of the variances occurred if any shall be communicated to the management
(Collins, 2018).
Collection of comparative and trend information to support budget
The information can be collected from the reports of the other bars and the cafes operating in
the same manner to set up the basic cost structure. The trends of the café can be analysed
with the help of the horizontal and the vertical analysis. This will help the Fusion Coffee bar
in understanding how much loan can be availed from where and how much capital invested
in the business (Caramani, 2017).
Negotiation strategy to acquiring funding for business project
There are some of the negotiating strategies that can be used by the Fusion Coffee bar to get
the bank loan easily. Some of the strategies are problem solving, contending, yielding and
many more. The right strategy would be the contending one where persuading the bank
which is the negotiating party in orders to concede the outcome. The financial plan shall be
clear and transparent and the negotiation strategy shall be determined in advance. The risk
profile of the business must also be discussed. The interest rate that is required to be paid
shall be discussed in the advance along with the time period of the payment. The appropriate
schedule for the overall payment must be checked according to the flexibility. The security
and the other issues must also be considered in advance (Gunia, Brett and Gelfand, 2016).
Records maintained to ensure up-to-date information about resource allocations and
usage
The Fusion Bar is required to maintain a log of the records in order to run the business
effectively as well as efficiently. One of the methods can be to set up a straightforward spread
sheet is additionally a possibility for littler administrators of the Fusion Bar. When the spread

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sheet is made, it's similarly as simple to use as a paper record and has the preferred position
by the bookkeeper or clerk can without much of a stretch, fare the information to all the more
dominant bookkeeping programming (David, 2017).
Independent venture bookkeeping programming: Popular private company bookkeeping
software, for example, QuickBooks, Sage or Xero function is admirable for cafés when
they're set up with an appropriate arrangement of records. The bookkeeper or accountant will
likely as of now utilize a particular program and will set you up on it except if you have a
valid justification for utilizing something different.
Reporting budget performance and expenditure
The performance of the budget and the expenditure can be observed with the help of the
regular or quarterly auditing by an expert auditor. The auditor will help in finding out the
variances while vouching for the balance sheet and the income statement. The proper auditing
of the cash inflows and the outflows can let the Fusion Bar know about its strength and the
weakness. This will eventually help the coffee bar in progressing for the better results and the
quality.
Risk return analysis
There are risk factors which are associated with the opening up of the Fusion Coffee bar. The
amount of the returns also pays a vital role as it is the key element in deciding whether the
capital can be invested in the business or not. The several risk factors are the inadequate
amount of the capital or the wrong proportion of the capital acquired the imbalance of the
workload due to the fewer employees and the workers, the location where the café has been
situated, the cost structure and lastly the competitive enemies around (Bonin and Caivano,
2018).

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Budget monitoring
Budget monitoring is one of the techniques that are used by the business owners to supervise
the incomes and the expenses associated with it. The monetary allowance is imperative to
guarantee that the money related, operational and capital plans that were created and affirmed
for execution as a feature of the spending procedures are being actualized. Spending
observing is significant for an association to have the option to authorize responsibility
identified with spending. Likewise, ordinary, far reaching supervision of the financial
transactions enables a coffee bar to assess administration level arrangement, guarantee any
new activities are gaining anticipated ground towards objectives/desires, and get familiar with
patterns and different deviations that may affect future tasks, lastly show straightforwardness
by sharing discoveries from this customary observing. Spending observing must incorporate
assessment of an expansive arrangement of capacities so as to completely educate what
moves should be made if critical deviations are found (Rosu, Tarba and Tiriplica, 2018).
Part 3
Explain the reports that require lodging by this company according to the Australian
Security and Investment Commission (ASIC)
According to the rule of the Australian Security and Investment Commission, also known as
ASIC, there are certain financial records which are required to be maintained by the
companies as per the compulsion of the law. Wesfarmers, the chosen company is required to
prepare the financial statements in accordance with the Corporations Act and must duly
comply with the Australian Accounting Standards. In the reports the company is required to
present the statement of the income, statement of the financial position as well as the
statement of the cash flows. Wesfarmers is mandatorily required to file these reports within
the Chapter 2M of the Corporations Act, 2001

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Form 388 Copy of the financial statements and the reports are to be lodged, apart from that a
disclosing entity’s half yearly financial report is lodged using the Form 7051 (ASIC, 2019).
Analyse these financial records by applying the horizontal and vertical analysis methods
As per the horizontal and the vertical analysis of the Wesfarmers it can be understood that in
the income statement the revenue has decreased by 2.95% whereas the overall profit
decreased by 4.24%. The sales, general and the administrative section of the company, results
in the reduction of the expenses by 4.75% which is a positive sign for the company. The
financial charges increased from $186000 to $219000, on the contrary the income tax
expenses have been saved this year. Overall the company achieved the net profit with an
increase of 73% (Wesfarmers, 2018).
While analysing the statement of the financial position of the Wesfarmers, it can be found
that the cash in hand reduced by almost 40% which is a critical situation for the company.
The receivables, inventories are almost on the same platform. Overall the value of the total
assets did not increase by a greater margin. The liabilities section of the Wesfarmers depicts
the increase in the long term debt, as well as the short term debt. The company sold some of
the shares and the retained earnings also declined by almost 45%
Overall the position of the Wesfarmers is satisfactory and the key points have been discussed
which needs immediate actions.
Explain whether you think that the organisations financial decisions will serve to meet
the organisations planned outcomes.
The financial decisions taken by the organizations will definitely serve the organizational
outcomes. The planned outcomes of the organization such as the increase in sales volume by
15%, reduction in the carbon emission by 20%, the overall growth and the sustainability of
the organization can be achieved with the help of the small measures. It is recommended to
the company to rely less on the debt component in order to avail the tax advantage.

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Moreover, the company must also get rid of the obsolete technology and focus on utilization
of the assets effectively. This will definitely meets the goals and the future driven objectives
of the organization like Wesfarmers.

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References
ASIC, (2019). Lodge the financial records [online] Available from
https://asic.gov.au/regulatory-resources/financial-reporting-and-audit/preparers-of-financial-
reports/lodgement-of-financial-reports/#what [Accessed on 10th August 2019].
Bonini, S. and Caivano, G., 2018. Risk/Return Analysis on Credit Exposure: Do Small Banks
Really Apply a Pricing Risk-Based on Their Loans?. In Mathematical and Statistical
Methods for Actuarial Sciences and Finance (pp. 179-184). Springer, Cham.
Caramani, D. ed., 2017. Comparative politics. Oxford University Press.
Collins, S., 2018. Ethics of care and statutory social work in the UK: critical perspectives and
strengths. Practice, 30(1), pp.3-18.
David, R., 2017. Contribution of records management to audit opinions and accountability in
government. South African Journal of Information Management, 19(1), pp.1-14.
Gunia, B.C., Brett, J.M. and Gelfand, M.J., 2016. The science of culture and
negotiation. Current Opinion in Psychology, 8, pp.78-83.
Hatch, M. D., Daniels, S. D., Glerum, K. M., and Higgins, L. D. (2017). The cost
effectiveness of vancomycin for preventing infections after shoulder arthroplasty: a break-
even analysis. Journal of shoulder and elbow surgery, 26(3), 472-477.
Johnston, M. (2017). Eclipse Coffee Bar-Business Plan(Doctoral dissertation).
Kostmann, M. and Härdle, W.K., 2019. Forecasting in Blockchain-Based Local Energy
Markets. Energies, 12(14), p.2718.
Rodríguez, P., Haghighatkhah, A., Lwakatare, L.E., Teppola, S., Suomalainen, T., Eskeli, J.,
Karvonen, T., Kuvaja, P., Verner, J.M. and Oivo, M., 2017. Continuous deployment of

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software intensive products and services: A systematic mapping study. Journal of Systems
and Software, 123, pp.263-291.
Rosu, M.M., Tarba, I.C. and Tiriplica, P.G., 2018, August. Methodology for budget projects
monitoring. In IOP Conference Series: Materials Science and Engineering (Vol. 400, No. 6,
p. 062026). IOP Publishing.
Wesfarmers, (2018). Annual Report. [online] Available from
https://www.wesfarmers.com.au/docs/default-source/asx-announcements/2018-annual-
report.pdf?sfvrsn=0 [Accessed on 10th August 2019].