Business Resources, Financial Performance Analysis, and Budget Report

This report analyzes the business resources of Future Solution, focusing on human resources, physical resources, and technological resources. It explores the relationship between human resource management and business performance, detailing recruitment documentation and essential employability skills. The report also examines the financial performance of Scrumptious Cupcakes Ltd., calculating break-even points and analyzing budgeting strategies, including both internal and external sources of finance. Furthermore, it evaluates the impact of managing resources on the overall business performance and suggests improvements for organizational efficiency. The report provides insights into managing costs, improving productivity, and making informed financial decisions to ensure the company's sustainability and growth in the competitive market.

Business Resources
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Table of Contents
INTRODUCTION................................................................................................................................3
ASSIGNMENT - 1...............................................................................................................................3
TASK 1.................................................................................................................................................3
1. Brief description of the business..................................................................................................3
2. Managing human resources and its relationship with the business performance........................3
TASK 2.................................................................................................................................................3
1. Describe the recruitment documentations....................................................................................3
2. Main employability skills............................................................................................................4
3 Criteria to meet job objectives......................................................................................................4
ASSIGNMENT - 2...............................................................................................................................4
TASK 1.................................................................................................................................................4
1. Describing the main physical resources.......................................................................................4
TASK 2.................................................................................................................................................5
2. How to improve the performance of the organisation.................................................................5
TASK 3.................................................................................................................................................5
3. Describe the main technological resources use by organisation..................................................5
TASK 4.................................................................................................................................................5
4. How these technological resources improve the performance of the organisation....................5
TASK 5.................................................................................................................................................5
1. How managing resources can improve the performance of business..........................................5
TASK 6.................................................................................................................................................6
1. Evaluation on the impact managing resources............................................................................6
ASSIGNMENT - 3...............................................................................................................................6
TASK 1.................................................................................................................................................6
1 Explain internal and external sources of scrumptious..................................................................6
TASK 2.................................................................................................................................................6
2 (a) Calculate current breakeven point of scrumptious..................................................................6
2(C) Re-calculation of BEP.............................................................................................................7
TASK 3.................................................................................................................................................7
2(a) Explaining to the sister that what is the budget and why it is essential...................................7
2(b) Using the budget information identify the problems and suggest remedy...............................7
3(c) Analyse why their cost needed to be controlled and what are the possible consequences.......8
ASSIGNMENT - 4...............................................................................................................................8
TASK 1.................................................................................................................................................8
1 (a) Explain the meaning and purpose of income statement..........................................................8
1(C) Ratio analysis to examine financial performance....................................................................9
(D)M3 Suggestions to Scrumptious.................................................................................................9
2(1) Evaluation the use of ratio and monitor how the business is doing.......................................10
CONCLUSION..................................................................................................................................10
REFEENCES......................................................................................................................................11
APPENDIX........................................................................................................................................12
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INTRODUCTION
Every startup as well as existing business has to recruit excellent and talented personnel and
gather sufficient financial resources for the successful functionality of the enterprise. The present
project report aims at identifying the technological as well as human resources requirement for
Future Solution. Moreover, lastly the report will make financial performance evaluation of the
scrumptious cupcakes ltd.
ASSIGNMENT - 1
TASK 1
1. Brief description of the business
The future solutions are the fastest growing company and providing the consultancy services
to their customers. Their products which they sell to their customers and services which they
provide are very specified in their workforces. Because management of these company is very good
and they provide better facility to their employees so they work with full confidence and enjoy their
work.
2. Managing human resources and its relationship with the business performance
Basically work of human resources in their organisation is that they manage their employees
and know the pros and cones of their organization. They manage their workers and providing best
environment in their workplace so that each employee of the organization work efficiently so
business performance grow better and more better (Lai, Lin and Lin, 2015). Human resources are
directly related to the performance of their organisation and also they divide working hours to their
employees in part time and in full time. For the better performance of the organisation, human
resources also required to interact with their employees so they give more better performance in
their work.
TASK 2
1. Describe the recruitment documentations
Mainly human resource management look for best candidate for hiring in their organization
because every organization want to grow better and better in the current market trends and every
change in the current market, management should have that potential to sustain in the current
market trend. So the recruitment process of that particular organization is according to their
management and their workforces like what type of quality they want in their employees.
Recruitment process of their organization is totally controlled by the HR management.
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2. Main employability skills
The human resource manager of the future solution organization, Justine Morris looks for
the best employees who have the best employment skills, for their organization. Main employability
skills including the communication skill, personal behaviour, interpersonal skills and more and
personal skills include that hard working capability, negotiation, and ability to interact with the
higher authority in proper way. With the help of this, they will be able to resolve the conflicts
between any group member or management also (de Guzman and Choi, 2013).
3 Criteria to meet job objectives
Basic criteria to meet the job objectives is that performance of the employees as well as
performance of the whole organisation about their work. Achieving the job objectives employees
and the organization should have proper employability skills and main thing is that objective should
be very clear (Lai, Lin and Lin, 2015). Connect the employee goals to the large company goals also
and this goal is also related to the individual goal and company goals so the impact of the
organization in the current market trend is far better.
4 Importance of personal skills in recruitment process
In the recruiting process of the company the management look for the better communication
skills in their employees and the impact of the recruitment process that could be on the performance
of the production of the firm and also they look for the betterment of their organization and if there
is lack of communication skill it would be direct impact on the client as well as firm (Devambatla
and Nalla, 2015).
ASSIGNMENT - 2
TASK 1
1. Describing the main physical resources
Main physical resources of the future solution organization it would be include that the
manufacturing of the building like materials and more, facilities they provide and machinery also.
Providing good facility of the server and computer and their security is most important. This would
be also including that quality of the equipment which they provide to their employees. Security is
the main factor would be included in physical resources like secure the data, personal information
about the clients and also the organization itself so the security is the major sector exist in the
physical resources.
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TASK 2
2. How to improve the performance of the organisation
Improving the performance of the organisation physical resources plays the major role in
betterment of the organization. Monitoring the performance of the employees how they work in
their organization. Management help their employees to improve the performance of the
organisation like they treat their employees in proper way of communication or to respect each of
the individual members of the group also providing the better environment in the organisation so
the employee can work freely and enjoy their workforces.
TASK 3
3. Describe the main technological resources use by organisation
Future solution use the various type of technological resources like energy, people,tools and
machine, materials, time, information and more. In the technological resources, energy used by the
management that change the energy into material. People are also the major resource of technology
because without people no product will be exist in the market and without product no market even
exist. In this technological resources it is also include the hardware and software also the virus
protection and licences, organisation would majorly use the technological resources for betterment
of the company use the experience and intellectual property.
TASK 4
4. How these technological resources improve the performance of the organisation
These various types of technological resources are very helpful to improve the performance
of the organisation like by using of these resources management easily interact with their clients
and provide the better products and services so because of that company will grow better and better
day by day. Proper hardware facility provided by the management and as well as software and also
protect the software from virus. So the employees can work easily with betterment of their own
performance.
TASK 5
1. How managing resources can improve the performance of business
Ms morris has shown the work to the board of directors who are impressed by the work of
yours and now they give the further task to improve the performance of the function solution.
Managing resources help to improve the business performance and growth of the future solution.
All the hardware and software tools are help to improve the productivity of the company and the
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managing resources are the mixture of both hardware and software tools, board of directors may
know the performance of the organisation that where the organization will stand in recent market
trend.
TASK 6
1. Evaluation on the impact managing resources
Management of the future solution should have the idea about how to control the budget of
cost in their company because of the recent market trend all the ups and down are there so budget is
the major issue in every organisation. Impact of the managing resources on the budget cost are
allows to the company to not fall into financial trouble and the company is running past many
decades so they know how to sustain in the recent market trend because they know the basic pros
and cones about the budget.
ASSIGNMENT - 3
TASK 1
1 Explain internal and external sources of scrumptious
Scrumptious is the small but reasonable company that exist in the current market of London
and supply cakes close to London and also across the country. There are various internal and
external sources exist like in internal sources savings and profits of the company and in external
sources that includes the loan, overdrafts, commercial mortgages, selling shares, venture capital,
leasing and factoring (Abor, 2017). These factors are related to the scrumptious cupcake ltd. savings
and profit include the whole budget of the company that how much profit gain by the company and
also how much savings are there.
TASK 2
2 (a) Calculate current breakeven point of scrumptious
Firstly meaning of the break-even point is that it refers to the revenues which are needed to
be cover by the company's total amount of fixed and variable expenses during a specific period of
time (Badoer and James, 2016).
Break-even point (BEP): Total fixed cost(TFC)/Contribution per unit (CPU)
CPU = Selling price - varriable cost
CPU = £1.75 - £0.60
= £1.15
TFC: Monthly fixed cost * Number of month
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TFC: £4300*12 = £51,600
BEP (Number of cup cakes)= £51,600 / £1.15
= 44869.56
BEP (£) = 44869.56*£1.75= 78521.73
Scrumptious now realise that how they use their break even point so that they gain the profit from
their production. Now calculating the new break-even point because the company reduce their
fixed cost.
2(C) Re-calculation of BEP
Break-even point(BEP): Total fixed cost(TFC)/ Contribution per unit(CPU)
CPU=Selling price - variable cost
CPU= £1.75-£0.55
=£1.2
TFC: Monthly fixed cost * Number of month
TFC: £4100*12 = £49200
BEP (Number of cup cakes)= £ 49200/ £1.2
=41000
BEP (£) = 41000*£1.75= 71750
Now in the comparison of both the break-even point of the scrumptious cupcake ltd.
company should gain the profit from reducing the fixed cost and selling more cupcakes in london
and across the country they sell 3000 cakes per month so according to this break-even point result
after reducing the fixed rate more gain company achieved (Sources of finance, 2017).
TASK 3
2(a) Explaining to the sister that what is the budget and why it is essential
Heather and Annabel have to know about the basic idea of the budget like how to control the
budget in the company. First they have to control the fixed cost and variable cost of the product so
the productivity is increases accordingly now in case of emergencies may be you have to take the
loan so you require to be manage the budget so that company sustain in the market trend.
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2(b) Using the budget information identify the problems and suggest remedy
According to the given information about the budget, these two sister targeted the sales
revenue cost is 22000 and actually sales revenue is 20000 so loss of the cost is 2000 so in this sector
they have to recover their sales revenue. Now in the part of the rent so this is equal no profit and no
loss and in other FC they gain profit.In ingredients and other materials they gain profit so may be
they use good quality of the ingredients and having fresh production.
3(c) Analyse why their cost needed to be controlled and what are the possible consequences
Budgeted ￡ Actual ￡ varriance
Type of
varriance
Sales Revenue 22000 20000 -2000 Negative
Rent 1200 1200 0 Positive
Other FC 800 1050 -250 Negative
Ingredients and other materials 6000 7000 -1000 Negative
Utility bills 300 350 -50 Negative
Wages 1200 1200 0
Salaries 2000 2000 0
Other costs 500 700 -200 Negative
Mainly poorly controlled budget is a loss of financial reward so if the product is being
produced and there is a lack of quantity of quality and also planning of the productivity so there will
be great chance that production is not in a proper way and customer will not be satisfied to the
product. In future they can increase their quality of the product and also quantity
ASSIGNMENT - 4
TASK 1
1 (a) Explain the meaning and purpose of income statement
Meaning and purpose of basic statements of the income is mainly included the sales revenue
and expenditure income sta are also called the profit and loss statements or it also includes that
company's financial performance or it include that current profit and loss company go through.
1(b) Explain the meaning and purpose of balance sheet
Balance sheet is the basic idea of the company's financial growth along with the company
that what are owns and owes of the company. Balance sheet is to reveal the financial status about
the business as of specific point of time. Judgement of the financial growth of the company is also
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done by the judging the balance sheet of the company. The basic key statements includes by the
scrumptious is are assets, inventory, liabilities, equity these are the basics of balance sheet assets
states that having separate account and another assets include accounts receivables (Bellavitis and
et.al., 2017).
Now the basic purpose of the balance sheet is that knowing the financial growth of theb
company and it would be include that net worth establishing and business valuation.One main
purpose is to include the key parts just to know the financial position of the company that where it
stands in new market trend.
1(C) Ratio analysis to examine financial performance
Ratio analysis is the best technique to evaluate and examine the financial performance of a
company through quantifying the financial resu1(C) Ratio analysis to examine financial
performance
Ratio analysis is the best technique to evaluate and examine the financial performance of a
company through quantifying the financial results by computing different ratios. With regards to the
Scrumptious Cupcakes (SC), its financial performance has been evaluated underneath:
Profitability ratios: SC’s gross profit and net profit ratio has been computed to 54.55% and
19.50% demonstrate that company is receiving better return on their total turnover. Better pricing
decisions at good mark-up and effective control and curtailment of the expenditures may be the
reasons for good profitability performance (MATTHEW, FADA and UKONU, 2016).
Liquidity ratios: CR and QR have been founded to 0.78:1 and 0.61:1 lower than the targeted
ratio of 2:1 and 1:1. It reflects that firm has to improve their resources under the current assets such
as stock, receivables and cash and reduce their current obligations to pay suppliers on right time.
Gearing ratios: Debt to equity ratio of the Scrumptious Cupcakes is little bit higher than
target ratio of 0.50:1 to 0.65:1, therefore, it can be said that there is a high investment risk that can
be reduced through repaying some long-term borrowings and increasing shareholders equity.
Activity/efficiency/performance ratios: Assets and inventory turnover ratios are 3.19 and 40
times is a clear indication that stock is utilized exceptionally by the managers (Lakshmi, Martin and
Venkatesan, 2016). However, debtors and creditors days are 6.64 and 54.75 days demonstrates that
Scrumptious Cupcakes is getting receipts promptly from the receivables while creditors are paying
delayed.
(D)M3 Suggestions to Scrumptious
 In order to improve liquidity, Scrumptious Cupcakes’s managers need to increase their
short-term assets and repay some deferral payments to the existing suppliers. Moreover,
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effective cash management strategies to maintain adequate working capital are necessary for
repaying creditors timely (Anwar and et.al., 2016).
 Solvency ratio must be reduced through repayment of long-term borrowings to the lenders
and raise additional capital through equity share capital. With the help of this, Scrumptious
Cupcakes can maximize their solvency position to meet their long-term obligations as per
the repayment schedule.lts by computing different ratios.
2(1) Evaluation the use of ratio and monitor how the business is doing
On the basis of the above ratio analysis, it has been assessed that profitability and efficiency
performance of the Scrumptious because of higher GP & NP ratio to 54.55% & 19.50% and high
assets turnover ratio of 40 times. However, Scrumptious Cupcakes needs to improve their liquidity
position by increasing the availability of short-term assets and minimizing the use of fixed cost of
capital, borrowings to manage the solvency position effectively.
CONCLUSION
From the report, it can be concluded that we discussed the business resources of the future
solution and also discussed the technological resources as well as human resources and further for
the scrumptious cupcakes ltd. and comparison of the break-even point for these company.
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REFEENCES
Books and Journals
Abor, J.Y., 2017. New Venture Development and Sources of Financing. InEntrepreneurial Finance
for MSMEs. Springer International Publishing. 3(1). pp. 21-50
Anwar, S.M., Rahmawati, R., Rismawati, R. and Rukmini, R., 2016. FINANCIAL RATIO
ANALYSIS USING ADDED VALUE, INCOME STATEMENT. Qualitative and
Quantitative Research Review. 1(3). pp.29-39.
Badoer, D.C. and James, C.M., 2016. The Determinants of Long‐Term Corporate Debt
Issuances. The Journal of Finance. 71(1). pp.457-492.
Bellavitis, C. and et.al., 2017. Entrepreneurial finance: new frontiers of research and practice:
Editorial for the special issue Embracing entrepreneurial funding innovations. 14(2). pp.25-
45.
de Guzman, A.B. and Choi, K.O., 2013. The relations of employability skills to career adaptability
among technical school students. Journal of Vocational Behavior. 82(3). pp.199-207.
Devambatla, L. and Nalla, D., 2015. An Approach to Improve Employability Skills:
eBridge. Journal of Engineering Education Transformations. 28(2&3). pp.131-138.
Lai, Y.L., Lin, F.J. and Lin, Y.H., 2015. Factors affecting firm's R&D investment decisions. Journal
of Business Research. 68(4). pp.840-844.
Lakshmi, T.M., Martin, A. and Venkatesan, V.P., 2016. A Genetic Bankrupt Ratio Analysis Tool
Using a Genetic Algorithm to Identify Influencing Financial Ratios. IEEE Transactions on
Evolutionary Computation. 20(1). pp.38-51.
MATTHEW, D.A.A., FADA, A. and UKONU, I.C., 2016. ROLE OF FINANCIAL RATIO
ANALYSIS IN ASSESSING BUSINESS PERFORMANCE IN THE HOSPITALITY AND
TOURISM OPERATIONS. Development. 4(4). pp. 16-18.
Online
Sources of finance. 2017. Online. Available through: <http://smallbusiness.chron.com/incorporated-
business-365.html>. [Accessed on 24th February 2017].
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APPENDIX
Ratios Formula 2014
Profitability ratios
Turnover 220000
Gross profit 120000
Net profit 42900
Total capital employed Total assets-current liabilities 51000
Gross margin Gross profit/turnover*100 54.55%
Net margin Net profit/turnover*100 19.50%
ROCE EBIT/Capital employed*100 84.12%
Liquidity ratio
Current assets 14000
Current liabilities 18000
Closing inventory 3000
CR Current assets/current liabilities 0.78
Quick ratio/acid test ratio
(Current assets -Stock)/Current
liabilities 0.61
Efficiency ratio
Total assets 69000
Cost of goods sold 120000
Debtors 4000
Creditors 18000
Inventory/stock turnover ratio Cost of goods sold/Inventory 40
Debtors receivable period Trade debtors/Revenues*365 6.64
Assets turnover ratio Sales revenue /Total assets 3.19
Creditors payment period Trade payables/Cost of sales*365 54.75
Solvency ratio
Non-current liabilities ( Long-term
debt) 20000
Equity 31000
Debt to equity ratio
(Long-term liabilities/Equity capital
employed 0.65
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