wingwong123 Financial statements are written records that convey the business…Financial statements are written records that convey the business activities and the financial performance of a company. Financial statements include the balance sheet, income statement, and cash flow statement. Financial statements are often audited by government agencies, accountants, firms, etc. to ensure accuracy and for tax, financing, or investing purposes.
Financial plan can also be used as tools to conduct a comprehensive evaluation of an organisation’s current and future financial state by using currently known variables to predict future cash flows, asset values and withdrawal plans (Investopedia, 2018). Financial plans should be fluid, with occasional updates when financial changes occur.
In this assessment task you will be given sample financial plans of a company for the purpose of reviewing and analysing the financial situation of the company. The sample plans will include;
? Current and projected balance sheet for the next two financial years
? Current and projected profit and loss statement for the next two financial years
? Current and projected cash flow statements for the next two financial years
It is expected that you have developed a basic understanding of key concepts used in this assessment task and had an opportunity to learn and review them in your preceding learning sessions.
Context:
For the purpose of simulation, consider the following organisational context in addition to the data sets;
Bean’s Coffee is a family owned private company operating a busy coffee shop in the city centre. The shop employs fifteen workers on the shop floor and five administrative staff members in the back office. Apart from operating the coffee shop, the company also imports and distributes its coffee beans to other coffee shops across Australia.
While the coffee shop returned a total turnover of $1.85 million in the last financial year, the wholesale of coffee beans generated revenue of $0.8 million. In this current financial year, the company is looking to expand both its retail and wholesale businesses with plans for two more coffee shops and expansion of coffee beans distribution to other parts of the country. The company has a number of shareholders from within the family and managed by Mrs Bean’s and her husband.
Roleplay:
Assume that you are working as part of the accounts team at Bean’s Coffee (e.g. Junior Accountant). Using the sample data and the organisational context as above, analyse and report on company’s financial statements as per the instructions below. For the purpose of this task, your trainer/assessor will the role of the Team Leader and the Accountant. Where needed, the class audience (or a group selected by the trainer/assessor) will play the role of organisational stakeholders.
Task:
Review the given financial plans and;
? Analyse projected incomes and provide reason(s) for variances
? Analyse projected expenses and provide reason(s) for variance
? Analyse company’s asset positions over the projected period and provide reason(s) for variance
? Analyse the case flow and discuss company’s cash health over the projected period
? Identify and explain any problems in company’s financial situation
? Identify and explain any perceived risks involved with any of the financial decisions (projections)
? Provide a verbal summary report to your manager (trainer/assessor roleplay) and seek feedback
? a brief report on the current financial situation of the company from the available data
The report should contain an overview of the business activities and the underlying assumptions.
The plan must be word processed and structured with appropriate headings and sub-headings as needed. It must be written as a formal report (Introduction/Executive Summary, Body, Conclusion). The report should be supported by data/calculations and the accompanying analysis substantive enough to make the conclusions. It is expected that each of the part above will provide a descriptive analysis of at least each.
Assessment Criteria
The following assessment criteria will be used for marking this assessment task. Ensure that you have addressed all of the criteria in your work.
? Used and applied the given organisational context and the roleplay
? Used the correct data set and undertook calculations/analysis using MS Excel
? Maintained the required communication and protocols within the roleplay
? Considered the given assumptions/additional information and used in the report
? The report is appropriately structured and written as a formal business document
? Appropriate headings and sub-headings are used to structure the contents
? Company’s current analysis includes comments on current financial strengths or weaknesses of the company
? Current cash flow, assets and liabilities, including GST and tax, are reviewed and analysed
? Analysis of future income identifies and explains reasons for increase/fall in revenues
? Analysis of projected assets identifies and explains reason for variance in asset position
? Analysis of projected expenses highlights inconsistencies, if any, in expenditure
? Analysis of projected cash flow identifies and explains cash position of the company
? Overall analysis of company’s financial projections highlights interdependencies and impact of financial decisions across different areas (e.g. Investment in assets impacts cash flow variances)
? Provided an analysis of company’s anticipated financial situation based on projections
? Identified and explained potential risk areas in the plans (e.g. cash short fall, decline in revenues)
? Demonstrated knowledge of the structure of the financial statements and accounting principles
? Demonstrated analytical and data analysis skills within the context of this task
? Was able to interpret data and support/justify own conclusions from the analysis BusinessBusiness – Other
