Reference no: EM132110155

Financial business performance analysis and calculations Assignment -

Assignment 1 - Analysis and calculations

1. Provide answers with respect to the following financial transactions:

a. an owner invests $550,000 in the business and takes out a long term loan of $200,000. What is the value of the assets of the business?

b. the assets of a business are $250,000 and the owner has invested $150,000. What are the liabilities of the business?

c. a business owner has invested $350,000. The current assets are valued at $120,000, current liabilities are $25,000, long term liabilities are $100,000. What is the value of the fixed assets of the business?

2. Fill in the missing figures in the production report below:

	Budget $	Actual $	Variance $
Direct material	25,550	?	1,450U
Direct labour	32,000	35,560	?
Factory overhead	?	12,250	500F

3. Interest rate is 12%. Calculate the simple interest to be paid on $8,000 if the amount is borrowed for:

a. two (2) years;

b. three (3)months;

c. 180 days

4. $2,500 is invested at 8% per annum for three (3) years. You are required to calculate:

a. the amount of the investment compounded after three (3) years;

b. the total amount of compound interest earned in that period.

5. Research and find 2 medium term (5 years) business loan products between ANZ bank and Commonwealth bank. You are required to describe and demonstrate 2 products such as business loan requirements and documents, interest rate and method, interest calculation for 5 years (50 words each, 5 years interest calculations).

6. Gordonvale Products produces bird cages. The annual cost for the product is as follows:

No of units produced - 16,000

Storage cost per annum - $4

Cost per order - $20

You are required to calculate the economic order quantity ("EOQ").

7. A business is offered a discount of 4% to settle an account in 10 days. The net amount must be settled within 30 days to avoid interest on the overdue account. Alternative funding is available at 8% per annum. Perform calculations to determine whether or not the business should take advantage of the 4% discount offered.

8. You are required to perform calculations for the following transactions to determine the cost of funding. The tax rate is 30%.

a. the cost of ordinary shares at 30 June X2. The dividend price per share at 30 June X1 is 60¢. The growth rate per annum is 3%. Market price per share at 30 June X2 is $1.

b. the opportunity cost of distributing $10,000 to shareholders instead of the amount being retained as profit. The amount distributed can be invested at 9% per annum.

c. the cost of 9% $100 debentures after tax with a current market price of $150.

9. a) If a project requires initial expenditure of $150,000, after a three (3) year life it has scrap value of $30,000 and the annual average profit before tax is $28000, what is the accounting rate of return?

b) What are the disadvantages of using the ARR method to evaluate a project?

10. A business has capital of $350,000, total assets of $220,000, a gross profit of $65,000, a net profit of $42,000 and total sales of $250,000. You are required to calculate and explain your evaluation (formula is required, 30 words each):

a. return on capital;

b. return on total assets;

c. gross margin;

d. net margin.

11. A business has current assets of $220,000, prepayments of $500, current liabilities of $155,000, an overdraft facility of $25,000 and inventory worth $50,000. You are required to calculate and explain your evaluation ( formula is required, 30 words each):

a. the current ratio;

b. liquid ratio.

c. Is the business able to meet all of its debt obligations? Give reasons for your decision.

12. The COGS sold for a business is $120,000. Opening inventory is $26,000 and closing inventory is $34,000. Calculate the inventory turnover ratio for the period and explain why a high ratio is beneficial to the business.

13. The equity of a business is $350,000 and long term liabilities are $110,000. Calculate the gearing or leverage ratio and explain the benefits of a business being highly geared.

14. A company has net profit after tax of $65,000, preference dividends of $5,000 and 20,000 ordinary shares. The net profit after tax distributed to shareholders is $55,000. You are required to calculate:

a. the earnings per ordinary share;

b. dividend per ordinary share

15. Waterloo Furniture Products is preparing its budget for the quarter ended 30 December XXXX.

Sales for the quarter are estimated as follows:

October $ 300,000

November $ 320,000

December $ 350,000

Other transactions include:

Cost of Goods sold ("COGS") is estimated 30% of sales figures.

Salaries are estimated at $150,000 each month.

Administration expenses (fixed costs) are estimated 10% of sales each month

The variable cost per unit is $ 8 per unit

The selling price per unit is $30 per unit.

You are required to:

a) Calculate the budget profit or loss for the quarter;

	October $	November $	December $	Total $
Sales
Less COGS
Gross Profit
Less Salaries
Less expenses
Net profit

a) Break-even point of each month

b) The contribution per unit of sale of each month

c) Break-even point in units of each month

d) Break-even point sale (dollar) of each month

e) Margin of safety of each month

f) Margin of safety % of each month

16. Research and find 2 most expensive international and also Australian shares in the market? Also describe about products and services of these companies (4 items, 30 words each)?

Assignment 2 - Financial and business performance report

Scenario: You are working as an accountant and finance officer for "Australian Credit and Finance", please find the organisation website for further information.

David and Clair Taylor own a small business called "Sports Store Pty. Ltd." with massive potential in the market. They have started their own business two financial years ago.

The goals are;

• To expand their own business and increase their sale over one million dollars in a medium term (3 to 5 years).
• To register with ASIC and ASX to raise fund by issuing shares in the Australian market after 8 years.
• To be able to supply all quality sport materials and equipment to Australia wide and New Zealand.
• To develop and maintain internal and external workplace relationship networks
• To implement and use new technologies for better and efficient quality services
• To provide healthy, professional, fun and successful workplace environment for all staff
• To comply and follow Australian regulations, codes of standards, government buddies, ethics, codes of conducts and etc.

To achieve their goals, the company needs to expand their financial activities by raising fund around $150,000. David and Clair came to see you for seeking advices and assisting them how to get the loan.

Please find financial statements for Financial Year 2017 and 2018 (attached).

A profit forecast statement for the next three years.

Procedures:

Please carefully read each question and provide your report below;

Details that must be included in the report:

ASSESSMENT QUESTIONS -

Part A - Executive Summary

• A summary of your report and what you will be submitting in the following pages (Min 60 words)
• The top-line findings (Min 4 bullet points)
• The types of information you will need to gather for David and Clair to make the final decision. (including a summary explanation why each piece of information is necessary, 45 words each - at least 4 types of information)

Part B - A 360 Degree Analysis

A brief knowledge about Sports store Pty. Ltd.'s objectives, targets, plans, expertise, experiences. (50 words)

Part C - Main part

Assess client needs

1. Discuss and clarify what are Taylor's financial expectations and objectives for mutual understanding? (40 words)

2. Describe how you explain possibilities of financial options, processes of right financial products with their specific legal and financial requirements to David and Clair according to provision of knowledge? (40 words)

3. Formulate and implement an action plan of financial services between you (financial consultant) and "Sports Store Pty. Ltd." representatives to make, sure high quality customer service will be provided such as agreement, financial requirements and documents, grievance management, financial services fee, costs of loan, deadlines, reviewing and monitoring progress plans and any changes, responsibilities, communication methods and feedbacks etc.(an action plan required, 60 word)

Analysis data -

4. Explain how and what authorities you could be in contact that you can prove and reconcile on reliability and accuracy of Sports store Pty. Ltd.'s financial statements to make sure these reports are complying with organisational procedures, statutory requirements and standard financial reporting principals?

5. You are required to follow the instructions by calculating "Medium term budget (3 years) profit and loss statements" for financial year 2019, 2020 and 2021 and also comparing "variance to budget profit and loss ended by June 2018". You can find all data from appendix 1 and 2, also, an excel file has uploaded through Moodle for your convenience which you need to submit the file as part of your assignment. All instructions are below:

(a) Sales will continue to grow at 25% per year from the year 2018 base year.

(b) Gross Profit % will increase and remain at;

1. 47% of sales for year 2019,

2. 52% of sales for year 2020,

3. 58% of sales for year 2021.

(c) Wages and on costs could be increased by 15% each year.

(d) All other costs will increase from now and will be in line with inflation of 10% per year.

(e) Interest rate is 8%. Calculate and compare the simple and compound interest to be paid on $200,000 for each year if the amount is borrowed for 3 years. Explain what would be the financial impact if you add compounded interest expenses to your budget profit and loss statement for next 3 years. Describe, is the company able to pay off its debt annually without any financial crises?

6. Analysis and evaluate the company's financial statements for the year 2017 and 2018 to financial performance and future potentials of "Sports Store Pty. Ltd." in accordance with standard financial analysis techniques, future funding requirements and statutory obligations (formulas required).

Prepare advice

7. Describe how you would include and consider compliance, statutory requirements such as taxations etc. with realistic view of business financial performance in your reports and advices to David and Clair? (50 words)

8. Demonstrate your professional final report in suitable and understandable language to be presented to David and Clair by explaining and interpreting financial analytical performance assessment and evaluation of each ratio? (Min 30 words for each ratio, financial graphs and charts are optional )

9. Demonstrate in your report how you identify financial risks and what are your financial contingency plans and options through customer's rights and obligations. (An action plan required)

Part D - Conclusion

Describe and inform your professional final result in aligned with Sports store Pty. Ltd.'s financial needs and objectives in order to finance their own business expansion. (Min 50 words)

Part E - Recommendations

Provide financial advice to David and Clair on new and/or alternative short-term and long-term financial sources and options to finance their needs in the market by mentioning 4 strength areas of financial performance and also 4 weakness areas that could be improved. (Min 70 words)

Part F - Workplace Evidence

Provide evidences of your workplace such as payslips, ID card, emails or pictures, etc.

Extra instructions: Your report will be at least 5 pages and approximately 1000 word count. Your report will include any necessary tables, diagrams or pictures to support your findings or hypothesis' on the managing of communication and difficulties. Be sure to include your bibliography - Author, Year of Publication, Title of Article, Name of Publication (or website address), and page number (if a book or PDF).

Attachment:- Assignment Files.rar