Financial performance planning monitoring

Assignment Help Financial Management

Reference no: EM13747230

Investigate and discuss the importance of review and evaluation of financial performance planning monitoring.

Assessment description

This assessment requires candidates to answer the questions to demonstrate their knowledge and skills in regards to the effectiveness of financial management processes.
Procedure
1. Read the budgeted figures and complete the table.
2. Look for any outstanding variances and list possible reasons and preventive measures you would take.
3. Look at different scenarios and at the processes involved.
4. Complete an evaluation grid looking at improvements to processes.
5. Complete the short answer questions.
Specifications
• relevant skills are identified
• a demonstrated understanding of specific and transferable skills
• specific development opportunities are suggested.
Case study
Below are the 2008 budgeted cash flow figures from the Jolimont accountancy firm, as was the example in the workbook. Can you use the figures from the income statement below, to complete the actual figures for Jolimont accountancy firm for 2008? Look at where the cash for the company has come from and explain if this is a sustainable cash resource for the business. List any outstanding variances for the business and possibilities for the variances. What corrective measures would you put in place to help control these costs in the future?

The below table requires full completion. In the first part new actuals need to be calculated based on your recommendations of decreasing expenses.

The first 2008 column is the actuals and the second column is the predicted budget, the third is the variance that you calculate act-bud = variance

JOLIMONT ACCOUNTANCY FIRM

	2008($)
Cash flows from operating activities
Collections from debtors	210,000
Collections from cash sales	160,000
Interest received	2,300
Payments to creditors	-121,000
Wages and salaries	-16,000
Interest Payments	-3,500
Other operating expenses paid	-17,000
Income tax paid	-21,000
Total cash flows from operating expenses	193,800
Cash flows from investing activities
Proceeds from sale of property
Payment for motor vehicle
Purchase of shares in Singh's Ltd	-12,000
Total cash flows from investing activities	-12000
Cash from financing activities
Proceeds from call on shares	7,000
Loan from Abbotsford Mortgage Co.
Loan repayments	-14,000
Dividends Paid	-28,000
GST Collections	12,400
GST Paid	-13,800
ATO-GST Settlement	-1,400
Total cash flows from financing activities	-36,400
Net change in cash	145,400
Opening bank balance	559,220
Closing bank balance	704,620

Account	Debit	Credit
Cash flows from operating activity
Collections form debtors	180,000
Collections from cash sales	170,000
Interest received	2,300
Payments to creditors		139,000
Wages and salaries		21,000
Interest expense		10,900
Other operating expenses paid		48,120
Income tax paid		39,984
Total cash flow from operating activity	93,296
Cash flow from investing		18,000
Purchase of shares in Singh's Ltd
Total cash flow from investing activity
Cash flows from financing	21,000
Proceeds from call on shares	180,000
Loan from Abbotsford Mortgage Co.		23,000
Loan repayments		41,000
Dividends paid	16,000
GST collected		14,000
GST paid		2,000
ATO GST settlement (refund)	137,000
Total cash flow from financing activities	212,296
Net change in cash flows	559,220
Opening bank balance	771,516
Closing bank balance

1. Explain if the source of cash sustainable, and list any outstanding variances you have noticed below:3-4 variances required.

2. No win the space provided, list the corrective measures you would implement and why:

Write down what processes and data you would analyse when looking at the following scenarios and write down any improvements you could include to ensure that the problem would be less likely to occur in the future. Using these improvements, complete the evaluation grid below.

1. An employee who has been paid too much annual leave:

2. A large tax liability owed to the ATO:

3. An inflated budgeted expense account:

4. A sales representative's overpaid bonus:

5. A large bank overdraft:

6. A trial balance that does not balance:

7. Overstated bad debts allowance:

8. Understated accounts payable:

Reference no: EM13747230

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