Unit 29: Financial Management, Analysis, and Legal Regulations

This report provides a comprehensive analysis of financial management within a small business context, focusing on AMD Consulting Group as a case study. It includes a detailed annual itemized monthly cash flow forecast, explaining fixed and variable costs against income, and applies break-even analysis to understand profitability. Key financial statements, such as income statements, balance sheets, and cash flow statements, are interpreted to assess their contribution to successful management. The report also explores analytical and quantitative techniques used in financial analysis, emphasizing the role of break-even analysis and cash flow statements. Furthermore, it discusses key legislation and regulations, including the Employment Law 1996, Health and Safety 1974, Data Protection Act 1998, Record Keeping Act, and Consumer Protection Act 1987, and their implications for small businesses, concluding with the importance of effective financial management and legal compliance for sustained business success.

Unit 29 Managing and
Running a Small
Business

Executive summary
On the basis of this report managing small businesses and its implications are considered
by the organization. The main concern of this report is on the small business and its financial
operations. In this report cash flow forecast, break even analysis, financial statements of the
company are discussed which can determine the financial situation of the selected organization.
At the last this report discussed various legislative regulations and acts which can useful to
improve the effectiveness of the company.

Table of Contents
Executive summary.....................................................................................................................................2
Introduction.................................................................................................................................................4
TASK 3.......................................................................................................................................................4
P4 Produce an annual itemised monthly cash flow forecast showing fixed and variable costs set against
income for a specific organisation...........................................................................................................4
P5 Explain how break-even analysis could be applied to an organisational situation..............................8
P6 Interpret key financial statements for an organisation in relation to how they contribute to the
successful management of the organisation.............................................................................................9
Analytical & Quantitative techniques....................................................................................................15
Break even analysis & cash flow statement...........................................................................................15
TASK 4.....................................................................................................................................................16
P7 Discuss key legislation and regulations that have implications on small businesses........................16
Conclusion.................................................................................................................................................16
REFERENCES..........................................................................................................................................18

Introduction
Small businesses and startups are considered as the base line of the country economy which
can help full to improve the growth rate of country economy. In United Kingdom, small
businesses are playing an integral part to maintain the economic growth rate of the country in
order to managing and running a small business successfully, UK Government is taking
numerous initiatives and also formulate appropriate policies & procedure (Abu Amuna and et.
al., 2017). This project is based on the AMD consulting Group which is small scale management
consulting firm in London and found in the year 2019 and offering specific service like lead
generation, customer acquisition, growth hacking, customer engagement, revenue generation,
consultative sales and many others. This report will highlight financial aspects of the selected
firm and discuss about annual itemized monthly cash flow forecast, break even analysis,
financial statements and its contribution to attain business objectives. Lastly, this project will
discuss the key legislation and also regulations of the firm.
Activity 2
TASK 3
P4 Produce an annual itemised monthly cash flow forecast showing fixed and variable costs set
against income for a specific organisation.
In order to maintain the financial structure of the business, it is mandatory to focus on the
cash flow forecast because it can help to maintain the financial considerations and identify the
specification and accountability of fixed cost and variable cost. The role of fixed cost and
variable cost is more which mainly determine the overall cost structure because it can combine
together and analyze the total cost. Cash flow forecast is can be interpreted in an effective way
which can useful to make the plan of the small scale organization in context of income. Cash
forecasting maintain the small entity and also monitor specific expenses so that company can
take care their cost structure and maintained the overall financial situation of the organization.
There are numerous sources are utilized to forecast the cash flow which are given below -

 Equity Financing - Through equity financing, company can appropriately identify and
also focus on the cost flow in their organization. Small organizations can raise the funds
in order to to issue their shares in the market. It is identified that small organization when
not performing well then they did not sale their shares because the cost of shares are
contain the low market value. With the help of equity financing, company can
appropriately determined their cost and also maintain the cash flow forecasting. Project payment timing - This is also considered as the effective source which can useful
to forecast the car cash flow. With the help of project payment timing company can
appropriately determined that cash flow forecasting. Project payment timing analyze the
whole cost structure and also its deadline time period which can be useful to forecast and
analyze the situation Planning, budgeting & forecasting - with the help of this technique, manager can
effectively identify the whole scenario of their budget system. Through appropriate
planning and budgetary structure, it will helpful to forecast the cash flow (Park, 2018).
 Time series data & information - time series data is beneficial to understand the
requirement of the company so that company can appropriately meet the requirement of
the task as per the specific time period. Through time series data and also appropriate
information , financial manager of the company forecast the cash flow and conduct the
cash flow analysis in an appropriate way. It can useful to setting the specific production
schedule so that execution of all the activities considered as for the financial budget
system (Park and LaFrombois, 2019).
Forecasted Cash flow Statement

On the basis of above table, it can be forecast that cash flow of the company may receive the
surplus is considered as 6392 in the upcoming period and total variable expenses is analyzed
63753 and TFC (Total fixed cost) is considered as 24000. Total estimated profit of the
organization is 94145.
P5 Explain how break-even analysis could be applied to an organisational situation.
Break even analysis
Break even analysis is helpful to identify that how many units related with the production
need to be sold in order to cover the fixed and also variable cost of the production. This analysis
is also considered as the measurement tool which can useful to analyze be margin of the safety.
This analysis is also useful in abroad leave basis that can consider the stock and also opinion of
trading to maintain the corporate budgeting for different projects. Break even analysis is an
appropriate term which is utilized to determine the relationship which exist between specific
factors like profit, cost of the profit and expenses. In this analysis it is considered that profit state
where production cost & revenue earned is same or equal. With the help of this analysis it is
helpful to understand the specific criteria like cross relationship and also linear cost (Prekker and
et. al., 2020). Another factor is revenue relationship and also non linear cost. It can be
determined that company are utilizing this process so that company can effectively able to use
geographical method. In case of AMD consulting Group , their manager is about to utilize
algebraic method to maintain the purpose and also take decision on the specific time period
which can reduce the complexity and handle the business situation effectively. Description about
breakeven point analysis methods are given below -
TFC = Total fixed cost
Qb= TFC/ (P-AVC)

P = Price
AVC = Variable cost per unit
AMD consulting Group want to expand their business operations and it is necessary for the
company to cover the fixed cost in order to meet the expenses in an appropriate manner. Through
BEP analysis , company can analyze the total expenses and try to easily recover it.

P6 Interpret key financial statements for an organisation in relation to how they contribute to the
successful management of the organisation.
Financial statements
Financial statements are considered as the written documents and records which convey the
business operations and activities and maintain the financial performance of the company.
Financial statements are incorporated with various statements like income statement, Balance
sheet and cash flow statements.

On the basis of above statements , it is analyzed that Gross Profit of the AMD consulting
Group is 3500 and the total sales is considered as 15000 , cost of the sales is generalized 11500.
NP (Net profit) of the company on the basis of income statements are analyzed as 1240 that is
demonstrates the sound financial position of the organization. On the basis of Balance Sheet,
3500 cash & total assets of the firm are 19400. Company contain the intern al liabilities include
9240 and total liabilities 10160. As per the cash flow of the company it is identified that total
cash retained with the AMD Consultancy Group is 3500. on the basis of above analysis,
company clearly seen the effective profit sue to the specific financial conditions.