Sitxfin003 manage finance with budgets PDF

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Summary

Cooking or cookery is the art, science, and craft of using heat to prepare food for consumption. Cooking techniques and ingredients vary widely across the world, from grilling food over an open fire to using electric stoves, to baking in various types of ovens, reflecting unique environmental, econo...

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Save your work with the filename , answer your assessment questions in this sheet below and upload the assessment once it has been completed.

ASSESSMENT SUBMISSION FORM Complete this form and submit to your assessor for grading . It is recommended that you keep a copy of your assessment and your assessment submission form.

Student Number

APEX4712

Student Name

HITESH

Email

[email protected]

Course Title

Certificate IV in commercial cookery

Unit Code and Title Assessment Task No. / Title Trainer Name

SITXFIN003 ☐ 1. Unit Knowledge Assessment (UKA) ☐ 2. Unit Skills Assessment (USA)

MR. ANIL

DECLARATION

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I hold a copy of this work which can be produced if the original is lost / damaged .

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This work is my original work and no part of it has been copied from any other student’s work or from another source except where due acknowledgement is made .

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No part of this work has been written for me by any other person except where such collabora tion has been authorised by the instructor / teacher concerned.

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I have not previously submitted this work for this or any other course / uni t.

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I give permission for this work to be reproduced, communicated, compared and archived for the purpose of detecting plagiarism.

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I give permission for a copy of my marked work to be retained by the college for review and comparison, including review by external examiners.

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I understand that: Plagiarism is the presentation of the work, idea or creation of another person as though it is my/our own. It is a form of cheating and is a very serious academic offence that may lead to exclusion from the college. Plagiarised material can be drawn from, and presented in, wri tt en, graphic and visual form, including electronic data and oral presentations. Plagiarism occurs when the origin of the material used is not appropriately ci ted. Plagiarism includes the act of assisting or allowing another person to plagiarise or to copy my/our work .

Student Signature I declare that I have read and understood the above declaration. Student ID: APEX4712

Student Name: HITESH

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Date: 07/08/2020

Student Instructions: 

All questions must be answered correctly to be completed satisfactorily.

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All knowledge assessments are untimed and are conducted as open book (this means student can refer to textbooks or any resources).

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Student may handwrite/use computers to answer the questions.

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This assessment task may be completed in a classroom, at home, learning management system (i.e. Moodle), or independent learning environment.

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You must complete all questions unassisted by the assessor or other personnel but may refer to reference material as needed.

Submission details 

The Assessment Task is due on the date specified by your trainer. Any variations to this arrangement must be approved in writing by your trainer.

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Fill out the Assessment Submission form to the documents you are submitting to be marked.

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Please answer each question on a separate page provided and clearly indicate the question number at the top of the page.

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The Trainer/Assessor may further prompt and question in order to receive answers of appropriate quality or if further clarification is required and to validate authenticity of your submitted work.

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QUESTION 1 List 8 different types of financial records ANSWER 1 •

Income

•

Expenses

•

Overhead and creation

•

Balance sheet

•

Materials and utility financial plans

•

Control of liquidity

•

Production financial plan

•

Sales financial plan

QUESTION 2 Which types of business must file a Business Activity Statement? What are the components of a Business Activity Statement? ANSWER 2 The business action proclamation (BAS) is a structure submitted to the Australian Taxation Office (ATO) by enrolled business elements to report their duty commitments, including GST, pay more only as costs arise retaining (PAYGW), pay more only as costs arise portions (PAYGI), incidental advantages charge (FBT), wine evening out expense (WET) and extravagance vehicle charge (LCT). QUESTION 3 Explain each of the following what procedures should be followed when collecting data to inform budgets. ANSWER 3 Cash Flow budget Capital Expenditure Budget Sales budget What procedures

A cash flow budget is simply a snapshot of the cash flow in and out of the company for a given period of time. Capital expenditure budget addresses the long-term capital needs of an company or the acquisition plan for facilities and equipment required to achieve its long-term objectives sales budget forecasts the planned or achievable sales for a given time span. 

Consult with staff to spot needs and changes in income and

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should be followed when collecting data to form budgets

   

expenditure priorities Gather data and suggestions from various cost centres Draw up and present draught budget so that reviews can be given Check with and consult all related staff about resource decisions Support awareness of the importance of controlling the budget

QUUESTION 4 Define the following type of budgets by briefly describing their scope ANSWER 4 a.) Wage Budget - Money paid over a predefined timeframe to pay compensation with. While arranging auxiliary changes or individual worker enhancements, account must be taken of the Wage financial plan. b.) Purchasing Budget - A buying spending plan incorporates the measure of stock a business is relied upon to purchase over each spending period. The sum indicated in the spending plan is the sum required to guarantee that stock is accessible to meet purchaser orders for products. c.) Event Budget - The occasion spending plan is an expectation (hinting) of the benefit and cost the occasion would create based on arrangements made and data assembled. Spending arranging is a significant piece of occasion the board . d.) Projects Budget - An undertaking spending plan is the general assessed cost expected to finish a task for a given timeframe. It's utilized to foresee what venture expenses would be for each undertaking procedure. The spending plan for the undertaking will incorporate things like work costs, material acquisition costs and working expenses. QUESTION 5

The following factors must be considered in the preparation of financial and statistical reports. Provide a brief explanation of each factor by explaining the scope and the information it provides. [100-160 words]

Cashflow

It reflects the movement of money within the businesses during a particular period. Page 4 of 15

Occupancy Rate Sales Performance Variance in income/expenditur e Expenditure

In order to determine the ratio for the certain things in businesses, this term is used and it is basically used in business such as hospitals & hotels or many more. It originally states the revenue related activities and its value against the targets of the company. Basically it gives the difference between revenue and expenses and is indicated by Profit = I-E relationship where negative means risk. “the action of spending funds.” Is known as Expenditure An example of an expenditure is the money spent on office equipment that you have purchased.

Cover

Cover basically means taking action to decrease a particular liability or obligation. In many cases, this means completing an offsetting transaction. For example, if an investor is shorting a stock and wants to eliminate the risk of a short squeeze, then she will "buy to cover."

Stock levels

The part of a firm's assets that are held in the form of raw materials, work in progress and finished goods. These are also known as inventories. A wasting asset is an item that has a limited life span and irreversibly declines in value over time. Such fixed assets could be vehicles and machinery. However, in the financial markets, the term refers to options contracts since the contract will continually lose time value after purchase

Wastage

QUESTION 6 What is the purpose of preparing a draft budget? What are some possible benefits? ANSWER A budget draft is expected to give you a visual diagram of the foreseen monetary consequences of your business exercises. It offers a few preferences, for example, the advantage of purchasing and sparing chances, how you isolate your assets and how far you go in accomplishing your budgetary destinations. QUESTION 7 In analysing a budgets results and ensuring it is effective in providing insight into a business’ financial performance, what must you compare every revenue and expense item on the profit and loss statement with? [10-20 words] ANSWER Page 5 of 15

Actual Output figures must be taken into consideration while comparing revenue and expenses on P & L statement of the whole budget cycle. QUESTION 8 List 3 things you need to include in your budget report, to give the decision maker enough information to do a clear cost versus benefit analysis of the budget request. ANSWER     

Cash flow statement Sales report Profit and loss statement Budget vs actual Balance sheet

QUESTION 9 What are the 5 main components of an Operating Budget? ANSWER The major components of a Operating Budget include  Income  Expenses  Overhead Costs  Production Costs  Monthly, Annual, Average And Projection Totals. QUESTION 10 Define the following Budget Terminology ANSWER Variance A budget variance is the difference between the amount you budgeted for and the actual amount spent. When preparing energy budgets, it is practically impossible to be “right on the money;” therefore resulting in a budget surplus or deficit. Projected/Forecasted Figure It estimates a company's future financial outcomes by examining historical data. Financial forecasting allows management teams to anticipate results based on previous financial data. Actual Figure Act ualfigur esr epr es entt heac t ualex pendi t ur esi nc ur r eddur i ngt hefi sc aly ear ,as r epor t edi nPubl i cAc c ount s . Budgeted Figure Page 6 of 15

A budget is an estimation of revenue and expenses over a specified future period of time and is usually compiled and re-evaluated on a periodic basis. Budgets can be made for a person, a group of people, a business, a government, or just about anything else that makes and spends money. QUESTION 11 Why is it important that staff understand a budget and associated target? ANSWER If employees are optimistic about the budget, they are more likely to support it and do their utmost to work towards the goals set. QUESTION 12 Which key processes need to be followed and analysed when reviewing and updating a budget? Explain your answers with examples relating to the Hospitality Industry. ANSWER At the point when proprietors and managers have gathered inward and outside information sources, the activity begins where all information sources must be checked and assessed for immaterialness, legitimacy and readiness during the time spent arranging the spending plan. Starting with earlier years' business, proprietors and overseers must fuse the information gave by both the inward and outside information they have acquired. Frequently proprietors and chiefs end up responding to questions for example, - Will the item cost increment or decline? - What, assuming any, will be the change to the volume of item sold? - Will the planning of deals change from past periods?

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USA PART 1 TASK 1 2019 BUDGET Department Operations marketing finance human resources total expenditure

Allocated funds $2,412,025 $689,150 $1,033,725 $2,756,600 $68,91,500

TASK 2

Operation department Being the representative of the operation department, I want to inform that last year (2018) we had a shortage of $137,830 and we cannot face the same this year too, please make the amendments in the budget accordingly. Also, this year an additional $206,745 is required to meet organization’s growth goals. All together we need 2,756,600 Marketing department In this department last year, we just used 80% of the total amount allocated which is $551,320. So, we had an extra of $137,830 and I hope in 2019 also we need the same amount that we used last year. The extra amount should be allocated to other departments wherever required. Finance department This year we are implementing a new accounting software due to which we are going to save $551,320 from the estimated expenses. So, this amount can be used to fulfil other needs. For this department we just need 482,405 Human resource department Just like operation department, we also have to focus on growth of the organization for which would need to hire more employees for which we need 3.5% of the total forecasted revenue. Including the additional amount, we need $3,101,175 2019 BUDGET Page 8 of 15

Department Operations marketing finance human resources total expenditure

Allocated funds $2,756,600 $551,320 $482,405 $3,101,175 $68,91,500

Budget Review Form Names of Department Representatives Who Developed the Budget

HITESH

PARTH RAHUL BALRAJ 06/08/2020

Date of Review: Budget Year in Review 2019 Have all the departments received satisfactory allocation of funds? If no, please explain. NO, different departments have received improper allocation of funds but as they placed their concerns mentioned above, the proper allocation of funds have been distributed in the reallocation table. Have there been any changes to the allocation of funds, from the previous year’s budget? If yes, please explain the extent of the changes and why they were necessary. YES, the funds allocated previously was not up to the mark so the re-distribution have been set-up accordingly, as taking an example of OPERATION DEPARTMENT. It had a shortage of $137,830 and it cannot face the same this year too, so the amendments in the budget was required. Also, this year an additional $206,745 is required to meet organization’s growth goals Overall, $2,756,600 was given again to this department merging previous one into it. Does the budget allow for the desired profit margin of 30% of total revenue to be achieved? If no, please explain

YES Reviewers Signature: HITESH Date:06/08/2020

TASK 3 HITESH ( to CEO of Naja Group of Hotel & Business ): As a part of my duties and responsibilities, I have attached “A Final Budget Review Form” and also provided you with the changes that has been done to Page 9 of 15

budget given by various departments, resulting in the new allocation of 2019 funds provided in the TASK 2 of this Assessment.  DECISIONS/CHANGES MADE :1. OPERATION DEPARTMENT – $2756600 have been allocated replacing $2412025 because of the request made upon the requirement of additional funds. 2. MARKETING DEPARTMENT – Excess amount was given which is now taken back in the new allocation. 3. FINANCE DEPARTMENT – Saved on the money spent on acquiring Accounting Software which is cheaper than Expected. 4. HR DEPARTMENT – Additional money is given for attaining Additional Staff members shown in new funds of 2019 Budget. These changes were required for the appropriate solution and working of these departments.  IMPORTANCE OF BUDGET ALLOCATION AND ITS NECESSITY :Ordinarily, spending plans are looked into every year and are set up for a 12 or two year timeframe. Financial plans are typically settled based on the uses that were made during the earlier year, with the expansion or deduction of any progressions that have occurred in spending; the employing of new staff individuals or the alteration of pay rates, for instance. For example, in a business, every division is conceded a pre-decided measure of cash to spend through the span of a year or two years. Regularly, the top of every office is answerable for distributing the financing to the staff that works in that office. The objective of a financial plan is consider all consumptions in every office. Financials are one of the most significant parts of any undertaking. It involves an assortment of perspectives; spending distribution being one of the angles. In this article, we will characterize spending assignment, distinguish its segments, and clarify why it is such a fundamental piece of business everything being equal and all portions

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PART 2 TASK 1 Revenue Departments Operational Marketing Finance Human resource

Budget 2019 9,845,000

Actual 2019 9,624,428

Variation 220,572

Percentage 2.24%

2,756,600 551,320 482,405 3,101,175

2,536,072 606,452 482,405 3,287,246

220,528 -55,132 0 -186,071

8% -10% 0 -6%

Annual Year-End Financial Performance Review Form HITESH Name of Reviewer: 06/08/2020 Date: 2019 Year in Review: What was the profit for the year in review? Please provide a short description and justification.

$ 2,712,253 is the actual profit of 2019 which is LESS than the expected profits of this year as the assumed profits were taken as $2,953,500.

Was there any exceptional financial activity which has caused the year in review’s financial performance to be different from previous years? If yes, please explain. Marketing department showed the most significant difference in the performance of budget having the negative variance of 10%.

Were there any deviations greater than 5% in the year in review from the budget? YES ; OPERATION DEPARTMENT

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Has the year in review met it’s investor return requirements of $2,000,000? If not, please explain. YES, there is a profit of $2,712,253 which is higher than the required.

Signature of Reviewer: JAGGA

TASK 2 E-MAIL To: [email protected] [email protected] [email protected] From: [email protected]

Dear Barry Barrington Hello sir, hope you are doing well On looking at the spending plan and real execution for the year, it was determined that there was a variety of 8% in the operational division and negative variety of 10% and 6% in showcasing and human asset office individually. Along these lines, we have to investigate operational division since it is influencing the general benefit. Purposes behind such contrast can be ridiculous spending targets or outside conditions. These issues can be settled by reviewing the spending plan before finishing it and all the staff should think about the financial plan and furthermore the different strategies to decrease cost.

Taking a gander at the measurements, it tends to be effectively observed that our group did well aside from a couple of spots that we attempt to defeat next an ideal opportunity for all the more better outcomes. Kind Regards HITESH

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PART 3 TASK 1 Expenditure NBH Figures

Industry Average

Variance

percentage

Operating Expenses Room Cleaning

$564,040

$452,924.12

Room Furnishing Building Maintenance Utilities

$446,000

$495,060.00

$320,600

$355,866.00

$263,900

$188,424.60

Lobby Cleaning Hotel Management Software

$157,000

$175,840.00
...