Project Report: Manage Budget and Financial Plan, Assessment 1 and 2

This project report comprehensively addresses budget management and financial planning across two assessments. Task 1 explores commercial organizational types (partnership, corporation, sole proprietorship), key performance indicators (KPIs) including financial (revenue, cost) and non-financial (customer relationships, operations), internal control systems, and their application in a project involving a new computer system implementation. Task 2, 3, 4, and 5 focuses on the creation, formatting, and linking of spreadsheets, accounting concepts (terminology, taxation), and the analysis of financial statements (income statement, balance sheet, cash flow statement). Task 6 emphasizes budgeting techniques and report generation. Assessment 2 delves into operational budgets, including sales revenue, inventory, cost of goods sold, and expense budgets. It also covers risk management, variance analysis, and performance monitoring through revenue comparative statements, emphasizing the importance of forecasting and KPI management for business success. The report includes detailed excel sheets to support the analysis.

Running Head: Manage budget and financial plan
1
Project Report: Manage budget and financial plan

Manage budget and financial plan 2
Assessment 1:
Task 1:
Part A:
Three commercial organizational types:
There are various commercial types available an entrepreneur could use any one of
them and start the business. Some of them are as follows:
a) Partnership:
In partnership, the business is owned by 2 or more people. The major
advantage of this business is funding as every owner can help in managing the
funds, start up cost and other business expenses. The main disadvantage of this
is sharing profits according to the spited %.
b) Corporation:
Corporation is a legal business form which is owned by various shareholders.
This business could be run by a single person by opting 100% shares. Main
advantage of this business is limited liability and the main disadvantage of this
business is that decision is taken by various people.
c) Sole proprietorship:
Lastly, the sole proprietorship is the business which is owned by the single
person. The main advantage of this business is that decision is made by the
owner only and the main drawback of this business is funding issues1.
Part B:
Key performance indicators:
Key performance indicators (KPI) are a calculative value which demonstrates that
how efficiently a business achieving the key performance objectives. Businesses could use
1 FIRER, C. et al. 2012. Fundamentals of Corporate Finance. 5th
Edition.Berkshire.McGraw-Hill Companies, Inc.

Manage budget and financial plan 3
key performance indicators at various levels to measure and evaluate the success of the
business o reach over the target.
For establishing the objective, it is required for a business to identify the market,
industry and the competitor’s and then makes the policies accordingly. For managing the
financial manage process, a business must consider the funds, overhead cost, profit, working
capital, revenues etc. following are some of the financial and non financial KPIs and their
evaluation technique:
KPIs Measurement
Financial KPIs
Revenue This could be measured through
implementing the horizontal analysis
technique2.
Cost This could be evaluated through
implementing the vertical analysis technique.
Inventory management This could be measured through evaluating
over the inventory ratios of the company.
NON Financial KPIs
Customer relationship Customer relationship could be measured
through identifying the feedback and
relationship with customers.
Operations Operations of a company could be evaluated
through identifying the technology and
business process of the company.
Technology Technology of the company could be
2 Elmuti, D. & Kathawala, Y. 2001. “An overview of strategic alliances”. Management
Decision, vol. 39, no. 3, pp. 205-217.

Manage budget and financial plan 4
evaluated through identifying the
competitor’s technology3.
Part C:
KPIs of the project:
The project is related to the implementation of a new computer system. For this
project, the main objective of the team must be achieve a competitive advantage in the market
through implementing a new technology and enhance the revenue of the company and
managing the various financial and non financial KPI of the company and the new project.
It has been analyzed that the financial KPI of a company must be revenue, cost,
working capital, cost, inventory, current liabilities, current assets, shareholder’s equity etc.
these KPI’s could be measured by the company through evaluating and implementing various
financial analysis technique such as ratio analysis, horizontal analysis, vertical analysis,
financial statement analysis etc4. at the same time, in this project the non financial KPI must
be employees, quality, operations, cycle time, supply chain, pipeline etc of the company.
These KPI’s could be measured by the company through evaluating and implementing
various technique of evaluating the non financial techniques such as market evaluation,
economical evaluation, technology evaluation, management evaluation, skill of employee
evaluation etc. thus it is suggested to the senior manager of the project to take care about their
KPIs to achieve the target and make this project a beneficial project for the company.
Part D:
Internal control system:
Internal control system is an accounting technique which is used to assure the
business about the operational efficiency, effectiveness, financial reporting, emulations, law
and policies. Internal control system is a process which helps the business in achieving the
target, in other words. Some of the main elements of internal control system are control
3 Du, J. and Girma, S., 2009. Source of finance, growth and firm size: evidence from China
(No. 2009.03). Research paper/UNU-WIDER.
4 Deegan, C., 2013. Financial accounting theory. McGraw-Hill Education Australia

Manage budget and financial plan 5
environment, control activities, monitoring etc. This system is helpful for the company to
manage the various aspect of the company as well as manage the performance of them
company5. It assists the company to manage the financial and non financial KPI of the
company. The main 3 internal control system of a company is control environment, control
activities and monitoring.
The internal control system of a company helps the company to manage the process
and achieve the target of the company, thus it is required by every company to evaluate and
manage the best internal control system to manage the process of the company6.
Task 2:
Part A:
Creation, formatting and formulas for the spreadsheet:
Refer to excel file
Part B:
Linking spreadsheets:
Refer to excel file
Task 3:
Accounting concepts:
Part A:
Terminology:
Refer to excel file
5 Davies, T. and Crawford, I., 2011. Business accounting and finance. Pearson
6 CORREIA, C. et al. 2013. Financial Management. 7th Edition. Cape Town: Juta andCompany Ltd.2.

Manage budget and financial plan 6
Part b:
Taxation and record keeping:
1. ATO implies the GST tax in Australian market over the goods and services which
has been manufactured and delivered into the Australian market. Various tax slabs
have been imposed by the ATO on different businesses such as a small business is
supposed to pay 30% of the total tax as a GST7.
2. ATO has formed various taxes over the Australian people. Some of them are
income tax, wealth tax and tax over antique pieces.
3. ATO has imposed various internal and external perspectives over a business to
manage the business record keeping technique. A business is required to manage
the accounting books to proof the income of the business and financial statement of
the company must also be correct8.
Task 4:
Financial statements:
Part A:
Income statement and balance sheet:
Refer to excel file
Part B:
Report:
Through the trial balance of the company, it has been analyzed that the income, net
profit and financial position of this company is the main key performance indicator of the
7 Brigham, E.F. and Ehrhardt, M.C., 2013. Financial management: Theory & practice.
Cengage Learning.
8 Brealey, R., Myers, S.C. and Marcus, A.J., 2007. FundamentalsofCorporate Finance. Mc
Graw Hill, New York.

Manage budget and financial plan 7
company, these points are depicting about the better performance of the company in terms of
expenses of the company and it states that the performance of the company is positive as the
profit has been earned by the company.
Refer to excel file
Task 5:
Financial statements:
Part A:
Excel sheet:
Refer to excel file
Part B:
Report:
Through the analyzing over the cash flow statement of the company, it has been found
that the performance of the company in terms of cash flow is not that much attractive.
Company is required to manage over the cash flow through managing over the various
expenses of the company and looking over the enhancement of the revenue of the company
so that the net cash flow of the company could be positive.
Task 6:
Report:
1. Budgeting is a tool which is used by the businesses to maintain the performance of
the company and it is also useful to evaluate the future performance of the
company. The budgeting report of a company helps the business to manage over the
internal control over the company. The budgeting helps the company to make
various financial and non financial decisions before the time so that their
implementation could be done with the time and a better result could be provided to
the company9.
9 Borio, C., 2014. The financial cycle and macroeconomics: What have we learnt?. Journal of
Banking & Finance, 45, pp.182-198.

Manage budget and financial plan 8
2. The budget of the next year of the company has been prepared by considering the
below points:
 Better measurement of KPI
 Better market condition
 Growth of the industry
 High sales price of the product
 Better economic performance
3. It is suggested to bill to look over various points while preparing a budget such as
various external and internal stakeholders must be analyzed by the company to
make a better budgeting report. Further, Budget of a company could only be
prepared by involving every department and their expectations. A budget is a tool
which depicts the manager about entire future changes into the operations of the
company. So the better evaluation must be done before making the budget reports.
Further, it is also suggested to the bill to look over various terms of the company to
manage entire related aspect of the company.
4. Through the evaluation of budgeting report of the company, it has been analyzed
that the result of changes into a department directly affect the result of another
department as according to a study the changes into the sales department would
affect the manufacturing department and changes into manufacturing department
would affect the purchase department of the company, thus the changes into a
single department could affect the entire result of the company. So it is suggested to
the company to look over entire department and the affect over the department to
make a better budgeting report for the betterment of the company and analyze the
budget reports accordingly.

Manage budget and financial plan 9
Assessment 2:
Task 1:
Operational budget- sales revenue:
Part A:
Excel:
(Refer to excel file)
Part B:
a. Through the study it has been found that the various changes have taken place into the
actual figures of 2013 and busted figures of 2014 due to numerous changes into the
market. The calculations is the excel file depict about the entire variances which have
taken place into the operations of the company. Through this study, it has been found
that the business is required to manage the business in the same manner as the
variances are positive and depicting about the better performance of the company.
b. While preparing a budget, various external and internal stakeholders must be analyzed
by the company to make a better budgeting report. in this paper, the internal
stakeholder of the company are the employees, mangers and the labor of the company
whereas the external stakeholders of the company are competitors, customers,
financial institutions, suppliers etc which affects the business process of the
company10.
c. Budget of a company could only be prepared by involving every department and their
expectations. An employee is the one who better understands the business and could
depict the budget maker about the future changes so it is required by a business to
look over entire business and make the changes accordingly into the budgets report of
a company.
Task 2:
10 Lacalle, D., Credit‐rating agencies. Life in the Financial Markets: How they really work
and why they matter to you, pp.95-98.

Manage budget and financial plan 10
Operational Budget:
Part A:
Inventory and cost of goods sold:
(Refer to excel file)
Part B:
Expense budget:
(Refer to excel file)
Part C:
Risk management:
(Refer to excel file)
Task 3:
Budget:
Part A:
(Refer to excel file)
Part B:
The current charge per hour is $ 140 whereas the budgeted charge rate is $ 161 which depict
that the average charge will exceed of the company in future. The budget of the company
depict that the revenue of the company would be lower in near future. So it is recommended
to the business to enhance the sales price according to the cost to manage the fixed % of net
and gross profit of the company11.
Task 4:
Monitoring performance:
11 De Haan, J. and Amtenbrink, F., 2011. Credit rating agencies.

Manage budget and financial plan 11
Revenue comparative statement of the company depict about the variance of $9,80,000.
These variances have taken place due to better strategy of the company, these variances are
positive and thus it depicts the manager about the good performance of the company even
more than expected.
The main point from the budget is the less expectation from the market. The company
could expect from the market and customers through implementing the best strategies and the
operations over the company.
Forecasting is a good analysis study as it offers the brief idea about the future to the
managers and the employees of the company and through which various financial and non
financial decision could be taken by the company accordingly12.
The company must look over various financial and non financial KPIs to
manage the performance of the company as well as the It has been analyzed that the financial
KPI of a company must be revenue, cost, working capital, cost, inventory, current liabilities,
current assets, shareholder’s equity etc. these KPI’s could be measured by the company
through evaluating and implementing various financial analysis technique such as ratio
analysis, horizontal analysis, vertical analysis, financial statement analysis etc. at the same
time, in this project the non financial KPI must be employees, quality, operations, cycle time,
supply chain, pipeline etc of the company13. These KPI’s could be measured by the company
through evaluating and implementing various technique of evaluating the non financial
techniques such as market evaluation, economical evaluation, technology evaluation,
management evaluation, skill of employee evaluation etc. thus it is suggested to the senior
manager of the project to take care about their KPIs to achieve the target and make this
project a beneficial project for the company.
Task 5:
Monitoring performance:
12 Fulin, S. 2011. Preface by SHANG Fulin. Corporate Governance of Listed Companies in
China, 9-10.
13 Brigham, E.F. and Ehrhardt, M.C., 2013. Financial management: Theory & practice.
Cengage Learning.

Manage budget and financial plan 12
(Refer to excel file)

Manage budget and financial plan 13
Bibliography:
Borio, C., 2014. The financial cycle and macroeconomics: What have we learnt?. Journal of
Banking & Finance, 45, pp.182-198.
Brealey, R., Myers, S.C. and Marcus, A.J., 2007. FundamentalsofCorporate Finance. Mc
Graw Hill, New York.
Brigham, E.F. and Ehrhardt, M.C., 2013. Financial management: Theory & practice.
Cengage Learning.
Brigham, E.F. and Ehrhardt, M.C., 2013. Financial management: Theory & practice.
Cengage Learning.
CORREIA, C. et al. 2013. Financial Management. 7th Edition. Cape Town: Juta
andCompany Ltd.2.
Davies, T. and Crawford, I., 2011. Business accounting and finance. Pearson.
De Haan, J. and Amtenbrink, F., 2011. Credit rating agencies.
Deegan, C., 2013. Financial accounting theory. McGraw-Hill Education Australia.
Du, J. and Girma, S., 2009. Source of finance, growth and firm size: evidence from China
(No. 2009.03). Research paper/UNU-WIDER.
Elmuti, D. & Kathawala, Y. 2001. “An overview of strategic alliances”. Management
Decision, vol. 39, no. 3, pp. 205-217.
FIRER, C. et al. 2012. Fundamentals of Corporate Finance. 5th Edition.Berkshire.McGraw-
Hill Companies, Inc.
Fulin, S. 2011. Preface by SHANG Fulin. Corporate Governance of Listed Companies in
China, 9-10.
Lacalle, D., Credit‐rating agencies. Life in the Financial Markets: How they really work and
why they matter to you, pp.95-98.