Describe the expectations and objectives of a client

Assignment Help Financial Accounting

Reference no: EM131415422

Assessment Activity 1 - Knowledge Questions

This assessment activity is based on knowledge questions. Answer the following task. You must answer all task to get satisfactory performance in this assessment activity.

Task 1.1
Describe the expectations and objectives of a client that can fulfil clients' goals.

TASK-1.2
Clients must meet legal and financial obligation in order to establish business structure and finance of a business. Identify clients' legal and financial requirements.

TASK-1.3
Financial option can assist clients to make plan and achieve financial goals. Lists some financial options. Briefly explain at least two.

TASK-1.4
It is important to review business performance against set criteria. Lists the agreed criteria need to be followed and communicated to clients.

TASK-1.5
Clients' needs are not static: what are the internal and external factors that need to be identified and monitored to ensure clients financial objectives are met. (1.5)

TASK-1.6
List and explain three ways you could use to obtain feedback on financial services. (1.6)

TASK-1.7
From your personal experience, or from the experiences of others, what are three possible shortfalls in financial service standards? Suggest some methods to sort them out. (1.7)

TASK-1.8
List appropriate authorities and sources from where reliable and accurate data can be sorted. (2.1)

TASK-1.9
Briefly describe how reconciliation of date can ensure statements are accurate comply with organisational procedures and statutory requirement.

TASK-1.10
Ratio analysis is powerful tools to analyse revenue and cost. Mention five ratio Analysis with formula.

TASK-1.11
List four financial techniquescan be used to analyse data.

TASK-1.13
List some aspects that need to be considered when preparing financial advice for the clients. (3.1)

TASK-1.14
There are many methods of presentation to communicate with the clients. Lists some suitable methodsof presentation which canconvey information to client

TASK-1.15
Give some examples of potential risks that need to be identified and quantified to the client.

TASK-1.16
Describe the sources and features of short-term and long-term finance.

Assessment Activity : Case study

This assessment activity is about The Gale Clothing Co Ltd., which has provided its latest financial results for analysis and interpretation. The company is a well-established firm and has been in business for 30 years, with control of the company being kept by members of the Gale family. Recently the chairperson of the board, Don Gale, relinquished his position on entry into politics and a new board has been appointed. The business has had a reputation for stable, cautious management but in the last few years has been slowly losing its percentage share of the retail market. The new chairperson, Brenda Gale, has recently graduated from the Castle Hill University of Business and has requested that a study be made possible causes for the fall in the retail market share. At present, the company employs 250 people. Look at the following information and answer the required tasks:

Gale Clothing Co. Ltd
Income statement for the year ended 30 June 2015

	($000)	($000)
Sales		16,000
Less cost of goods sold
Stock at 1 July	850
Purchases	3,700
	4,550
Less Stock at 30 June	950	3,600
Gross Profit		12,400
Less operating expenses (including depreciation $800)		9,970
Profit before interest and taxes		2,430
Less interest		450
Profit before tax		1,980
Less Taxation expense		780
Net profit		1,200

Gale Clothing Co. Ltd
Statement of appropriation of profits for the year ended 30 June 2015

	($000)	($000)
Retained earnings at 1 July		900
Add profit after taxation		1,200
		2,100
Less Dividends provided for :
Preference shares	40
Ordinary shares	460	500
Less Transfers to reserves:
General reserve		600
Retained earnings at 30 June reporting date		1,000

Gale Clothing Co. Ltd

Balance sheet as at 30 June 2015

			($000)
Current assets:
Debtors		2990
Stock		950	3940
Non- current assets:
Investments
Shares in listed companies		601
Land, buildings		4459
Plant, equipment	10000
Less accumulated depreciation	7800	2200
Intangible assets
Goodwill		800	8060
Total assets			12000
Current liabilities:
Creditors		1030
Provision for dividends		500
Provision for taxation		780
Bank overdraft		120	2430
Non- current liabilities:
Mortgage on land, buildings		1270
Debentures		1500	2770
Total liabilities			5200
Net assets			6800
Equity:
Preference shares $1 fully paid
Ordinary shares $1 paid to 75c each		500
Share capital		4500	5000
General reserve			800
Retained earnings			1000
Total equity			6800

Additional information
- All sales were made on credit.
- A study of comparative figures from the 30 June 2014 statements showed an accounts receivable balance of $3050 and a total equity position of $6600. The market value of the company's shares at 30 June 2010 was 85c.

Investment plan and improve cash flow:

Gale Clothing Co Ltd. is planning to expand business. Managing director of the company is not sure whether he should invest or not. The following information has been supplied by financial analysis to evaluate which project would be more beneficial.

	Project A	Project B
Purchase cost	$300,000	$375,000
Expected life	5 years	5 years
Scrap value	Nil	Nil
Purchase date	Now	Now
Depreciation	Straight	Straight
Net profit before tax and depreciation	$95,000	$104,000

Additional information:
i) Company tax rate is 30% payable at the end of the year.
ii) Cost of capital is 10% after tax.

Working capital management

Gale Clothing Co Ltd retail has another business that sells 35 000 units of product annually, which it buys for $17 per unit. The cost of placing each order is $6, while the annual carrying cost is $3.50 per unit.

Estimated Cash collection:

CEO of Gale Clothing Co Ltd Electronic asked you to prepare Estimated working capital (Estimated cash) for the first half of 2016 and have provided you with the following information:

Quarter

Sales ($)

3 rd. Quarter 2014

4^th Quarter 2014

1^st Quarter 2015

2^nd Quarter 2015

100,000

90,000

105,000

110,000

- Seventy per cent of sales are collected in the same quarter they were made, 25% in the following month and 5% in the second following month.

REQUIRED:

Task 2.1
Ratio analysis is standard financial analysis technique to analyse financial report and data. Base on financial statement calculate the following ratio. (Pc-2.3, 2.4, 2.5, 2.6, 2.7)

Current ratio

Liquid ratio

Stock turnover

Collection period days

Fixed asset turnover

Assets turnover

Assets employee ratio:

Gross profit margin (%): Gross/Sales X 100=

Net profit margin (%)

Return on net worth

Return on total assets (%)

Profit per employee

Debt to equity (%)

Total debt to total assets (%)

Earning yield

Task 2.2
Based on ration analysis advise client to improve financial performance. (Pc-3.1)

Task 2.3:
According to client request review investment plan by using Capital budgeting technique that may include payback period and Net present, value (NPV). Calculate the payback period and Net Present Value for both proposals and advice client whether or not to accept the proposal and provide the reasons (pc-1.4, 3.1)

Task 2.4: Client is notsure how much working capital (inventory) need to be maintained. Advise appropriate plan and calculate economic order quantity and umber of orders to be placed each year. (Pc-1.3, 1.4

Task 2.5:
Being a financial analyst calculate the Weighted Average cost of capital (WACC) to assess the financial potential of business(use book value of business equity). (PC-2.7, 1.3)

Task 2.6:
Based on fixed deposit client is expecting to achieve future financial goal. What will be the future value of the deposit in three years? (1.3)

Task 2.7: Based on case study capital structure decision solve the following problem:

- Over the range of sales level, what is the increase in sales between 80 000 and 120 000?
- Over the range of sales level, what is the % increase in EBIT between 80 000 and 120 000?
- What is the degree of operating leverage at sales of $80 000, $100 000 and $120 000?
- What is the degree of financial leverage at sales of $80 000, $100 000 and $120 000?
- What is the combined leverage at sales of $80 000, $100 000 and $120 000?

Do the calculation and answer all the questions.

Task 2.8: As per CEO of Gale requirement prepare estimate cash collection for Four Quarter. (Pc-1.3, 1.4, 3.3)

Task 2.9: Gale ltd has two investment schemes. Assess the financial potentiality of investment based on accounting rate of return on total investment and advise which scheme should be selected. (Pc 2.7)

Task 2.10: Analyse revenue and cost of potential office furniture and advise client should it be leased or purchased. (PC-2.3)

Task 2.11
After completing all tasks of this assessment activity, do a meeting with your trainer for minimum 10 minutes (assuming him or her as the new chairperson, Brenda Gale) in this meeting discuss the following:
- Verify the business goals with client ( Brenda gale)
- Discuss legal, ethical and legal requirements with the client
- Talk about different financial plans and discuss about plans to achieve those.
- Communicate client about how the plans are progressing
- Ask questions about your services(feedback)
- Use table, calculations to discuss which options are better for client and why?
- Advise the client about risk and contingencies and different risk management options.
- Advise and discuss different short term and long-term finance options.

Attachment:- Financial and performance.rar

Reference no: EM131415422

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len1415422

3/6/2017 2:57:38 AM

Lists ? Use a colon to introduce the list, a comma before ‘or’/’and’ and a full stop at the end of the last item in the list. Use a bullet point as the first level and an en dash (-) as the second level, e.g. Students must enrol in: ? Accounting units, ? Marketing units, and ? Business units Font Use black as text colour and Calibri (Body) 11pt or 12pt for default text (See Headings and Subheadings for headings). Spacing ? Use 1.15 as line spacing. Printing ? Use Moderate margins for printing (Page Layout ? Margins ? Moderate). ? Print Black/White unless stated otherwise by your Trainer/Assessor.

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Citation and Reference List ? Use Harvard Style Guide ? Insert in-text citation directly after the information being sourced from an external source. ? Provide a Reference List (Bibliography) at the end of your portfolio ? Each external image incorporated in your portfolio must be sited. Capitalisation ? Use initial capitals for positions, personal names, placenames, nationalities, and groups of people E.g.; Chief Executive Officer – Alim Saiyed – Parramatta – Australia – Australian

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Headings and Subheadings ? Use Cambria (Headings): H1: Main Heading (16pt) H2: Subheading Level 1 (14pt) H3: Subheading Level 2 (13 pt) ? Use an initial capital for the first word only (unless the heading includes proper names and nouns): E.g.; Assessment Activity 1 ? Use informative and intriguing wording ? Using Boxed Headings is optional.

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This assessment tool is designed to gather evidence on your skills and knowledge required to analyse and report on a broad range of financial and business performance information and encompasses assessing clients’ needs, analysing data and preparing advice. Language ? Use formal and non-discriminatory language ? Avoid informal terms: E.g.; Using “Yeah” rather than “Yes” ? Avoid sexism in language

3/6/2017 2:55:21 AM

Discussed what performance level is required for each assessment task. Organised the necessary arrangements to meet the assessment conditions essential for the candidate to carry out each assessment task. Ensured that the candidate read and understood the Student Assessment Handbook involving following concepts: authenticity of candidate’s work re-submission, re-assessment and study plan policy/procedures appeals process regulatory information confidentiality procedures Discussed special needs (if any) of the candidate and made the necessary arrangements. Summarised information and allowed candidate to ask questions.

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hi please find attached document and my assignment questions are opnly from page 2 to 5 i dont need other questions to be answered Thanks ? Talked to the candidate about the purpose of the assessment. ? Discussed the assessment environment and the process covering when the assessment will occur, where the assessment will occur, who will assess the candidate, and the feedback process. ? Printed the unit outline and explained the unit of competency including each element, performance criteria, foundation skill, performance evidence, and knowledge evidence that the candidate will be assessed on. ? Discussed the various methods of assessment, assessment instruments, submission requirements and the due date. ? Discussed what resources are required to successfully complete this assessment.

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