BSBFIM601A Manage Finances Student Guide
SIT60313 Advanced Diploma of Hospitality
ASSESSMENT 1 - Project
Total Assessment 1 length should be 800 - 1500 words.
You must accurately reference all of your external sources of information
You must complete your answers in spaces provided in this Student Guide
You will need to write a report outlining the following:
* What methods would you use to plan for financial management including:
* What you would analyse in order to find information on previous profit/loss?
* How would investigate the reasons for previous profit/loss?
* How would you analyse identify future expenses ...view middle of the document...
In the short term, funds are required to pay the employers or to invest in stocks. In the middle and long term funds are required to make additions to the productive capacity of the business.2. Financial Control:Financial control helps the business to ensure that it is meeting its goals. Through financial control the firm decides how much to invest in short term assets and how to raise the required funds.3. Financial Decision Making:The three primary aspects of financial decision making are investment, financing and dividends. Investment must be financed in some way for which various alternatives are available. A financing decision is to retain the profits earned by the business or should it should be distributed among the shareholders via dividendsFinancial analysisFinancial analysis can tell you a lot about how your business is doing. Without this analysis, you may end up staring at a bunch of numbers on budgets, cash flow projections and profit and loss statements. You should set aside at least a few hours every month to do financial analysis. Analysis includes cash flow analysis and budget deviation analysis mentioned above. Analysis also includes balance sheet analysis and income statement analysis. There are some techniques and tools to help in financial analysis, for example, profit analysis, break-even analysis and ratios analysis that can substantially help to simplify and streamline financial analysis. How you carry out the analysis depends on the nature and needs of you and your business.Reasons for creating a cash flow budgetThink of cash as the ingredient that makes the business operate smoothly just as grease is the ingredient that makes a machine function smoothly. Without adequate cash a business cannot function because many of the transactions require cash to complete them. By creating a cash flow budget you can project your sources and applications of funds for the upcoming time periods. You will identify any cash deficit periods in advance so you can take corrective actions now to alleviate the deficit. This may involve shifting the timing of certain transactions. It may also determine when money will be borrowed. If borrowing is involved, it will also determine the amount of cash that needs to be borrowed. Periods of excess cash can also be identified. This information can be used to direct excess cash into interest bearing assets where additional revenue can be generated or to scheduled loan payments. Managing cash flowAs a new business, your biggest challenge is likely to be managing your cash flow -- probably the most important financial statement for a new business is the cash flow statement. The overall purpose of managing your cash flow is to make sure that you have enough cash to pay current bills. Businesses can manage cash flow by examining a cash flow statement and cash flow projection. Basically, the cash flow statement includes total cash received minus total cash spent. Cash management looks primarily at actual...