ASSESSMENT ACTIVITY: SHORT ANSWER RESPONSES

Published: 2021-07-06 06:27:33
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Describe at least one (1) business that is profitable and explains why you think it is enjoying financial success.Domino’ s Pizza Enterprises Limited is one of the successful business in food delivery industry in Australia. It has achieved a record store growth around the country with a net profit of $64million. The major underpinnings of such success are Domino’ s digital innovation and strong operations system. Currently, the business is largely operating through digital channels like Android and iPhone apps, Kindle Fire, and company’ s website. This has brought huge returns to the company.While the evidence suggests otherwise, there is a common view that many new businesses fail within the first year of operation. Why do you think a new business might not succeed?The most commonly failing business are those of small and medium enterprises. A report issued by Australian Securities and Investment Commission looking into company bankruptcies depicted that business collapse mainly because of poor strategic planning as 44% of failures was caused by this factor. Whereas, forty percent suffered from insufficient cash flow or bad cash flows and thirty-three percent retired because of losses in trade.3. Explain the following fundamental accounting concepts:▪ Business Entity ConceptBusiness entity concepts imply that business is a separate body from its owners for all the associated transactions referring to the use of separate accounting records exclusively.▪ Dual Aspect ConceptThe concept derived from the principle accounting equation refers to recording each business transaction in two accounting heads underpinning the double entry system.▪ Money Measurement ConceptMoney measurement concept in business refers to that only monetary transaction shall be recorded.4. Explain the following fundamental accounting concepts:▪ Objectivity ConceptObjectivity concept in accounting means that the financial statements should be evidence-based.▪ Going Concern ConceptGoing concern concept is based on the assumption that business entity will be working in the foreseen future and will not be ceasing its operations or sell its assets shortly.▪ Periodicity ConceptThe periodicity concept means that financial transactions of a business entity are summarised, divided and reported periodically such as annually, semi-annually, quarterly and monthly.5. Explain the following fundamental accounting concepts:▪ Cost ConceptCost concept means that transactions against assets liabilities shall be recorded at its initial cost in the history.▪ Conservatism ConceptConservatism concept refers the recording of assets when there is an assuredly to be received whereas liabilities and expenses are to be recorded without waiting for the outcomes associated.▪ Materiality ConceptThe materiality principle means that if ignoring an accounting standard has too little an impact to mislead the reader of a financial statement; it is acceptable.6. Explain the following fundamental accounting concepts:▪ Realization ConceptRealisation concept refers to recording the revenue entries only when the services rendered and products sold or delivered.▪ Matching ConceptMatching principle refers to the recording of expenses and associated revenues simultaneously in the same accounting period. Causal-effective entries are to be recorded at the same time however if there is no relation, record the cost under the head of expense immediately.▪ Full Disclosure ConceptFinancial statements of a company should be all-inclusive, and no relevant financial information should be missed.7. Provide four (4) examples of investment decisions8. Provide five (5) examples of financing decisions9. Provide three (3) examples of financial management decisions.10. Explain the difference between financial accounting and management accounting.11. Provide five (5) examples of ratios that can be used for analysis and what they mean12. Provide the formulas for the following ratios:▪ Gross ProfitSales – cost of goods sold = Gross profit▪ Net ProfitTotal Revenue – Total expense = Net profit▪ Inventory Turnover RatioCost of goods sold ÷ average inventory = Inventory Turnover Ratio▪ Debt to Assets RatioTotal Debt ÷ Total assets = Debt to equity ratio▪ Return on InvestmentGain from Investment – Cost of Investment ÷ Cost of InvestmentWEEK 3 ASSESSMENT ACTIVITY: RESEARCH1. Research the following website http://ato.gov.au/ and summarise the services, facilities, and products the Australian Tax Office provides for individuals and business.Australian Taxation Office facilitates the individuals and business entities to manage their taxation account officially which allows them to maintain their details, past taxation records, and track of their progress on return. There is a proper audiovisual guideline for how to create, use and maintain the taxable account. All the information regarding taxation policies and registration processes is available on the website. The website provides services in different languages and separate channels for individuals, businesses and non-profit organisations.2. Explain and find one (1) example of a Bilateral or Regional Trade AgreementAs the name suggests that bilateral is between two nations agreeing on trade terms and conditions that are favouring for both of them. Such agreements provide both the nations with expanded access to the market. At an advantage, bilateral trade agreements are easier to negotiate as compared to multilateral agreements as there are only two parties involved.Example:A bilateral trade agreement was held between Australia and unites the States of America on 1st of January 2005 that generated a total of 26.7 billion dollars by 2009 with a 23 percent increase since incepted.Explain the Trade Practices Act. What is it? Who does it apply to?Trade Practices act 1974 is federally regulated law encompassing regulations to cater all the contributors of a business market such as codes of practice for industries, monitoring price product safety and market practices. The Act has provided the economy of Australia with as sustainable competitive environment by balancing between the encouragement of competition and anti-competitive conduct. It applies to 4. Explain the following key Australian Taxation requirements:▪ PAYG WithholdingPAYG stands for Pay as You go and under PAYG withholding, the tax amount is withheld on certain payments made by the business to others such as employees, directors, labour, voluntary and other payments that are not quoted with an Australian Business Number.▪ Company Tax Company entitled to ABN should register for a Tax File Number and pay sales tax if its annual turnover is $75000 and above. A company needs to pay tax at national tax rates and is subject to concessions in the case of being a small business firm. Usually, in Australia companies pay through PAYG taxation system▪ Goods and Services Tax (GS.)A broad-based and most common form of business taxation in Australia is goods and services tax, generally, 10 percent on goods sold and services rendered anywhere in Australia.▪ Financial ProbityFinancial probity is referred to as strict adherence to a code of ethics based on undeviating honesty, especially, in commercial monetary matters and beyond legal requirements.▪ Australian Business Number (A.B.N)An eleven digit number unique and identifiable allocated to a business entity in Australia is called Australian Business Number. It is for taxation and other legal matters of the business with authorities of government.▪ Business Activity Statement (B.A.S)Every business registered in Australia and subject to GST is required to submit a form called Business Activity Statement, containing information on their tax liabilities and obligations.▪ SuperannuationSuperannuation is a taxation system for the subjects entitled to any super contribution.▪ Fringe Benefits Tax (F.B.T)Fringe benefits 1111tax is a tax paid on the benefits that an employer pays to his employees. It is separate taxation than income tax.▪ Income TaxAny resident Australian is reliable to pay tax at the rate of 19c for each Dollar over $18200, 32.5c for each dollar over 3700037c for each dollar above 87000 and 45 for each dollar over 180000. The rates are different for non-resident Australians.What does International Commercial Terms (INCOTERMS) mean? International Chamber of Commerce came up with these terms that define the obligations and rights of the parties having delivery contracts for the goods sold. These were thirteen terms in number and defining the conditions with which transactions will occur between the seller party and buyer party and that what will be the division of responsibilities and cost between the parties. The terms were revised in 2011 and took effect from 1st January of the same year, and the terms decreased to eleven in number from thirteen. Delivered at Terminal, Delivered Duty Paid and Delivered at Place are added eliminating some of the previous terms.Explain what the role of the following: World Trade Organization (WTO)World Trade Organization is an international organisation that deals the rules and regulations of trade going on all around the world. There are certain agreements working at the core that is signed by the majority of countries from around the world helping imports, exports for the benefit of all.What is GST (Goods and Services Tax and how is it calculated)?A most common form of business taxation system is GST applicable to the sale of goods and services rendered. Every country has different taxation rates as GST. Goods and services tax is also called general sales tax. In Australia, the taxation rate for GST is 10% implying to businesses selling worth more than $75000 anywhere in the country.WEEK 41. Prepare a Profit & Loss Statement and Balance Sheet using the information given below.2. Explain how the business is affected by the completed Profit and Loss Report.From the following financial Information Prepare a Profit & Loss Statement and Balance Sheet;BALANCE SHEETWeek 5Q1. Professional ethics is the application of ethical principles by professionals who have an obligation to those who rely on their services. Give examples of professional care:Professional ethics are the set of moral standards as in rules that companies follow. For instance, a law service company’ s lawyer is obligated to represent his client competently that will require his legal knowledge, skills and necessary preparations.A doctor is supposed to keep the confidentiality of patients’ reports and conditions from other unless treatment requires consultation from other professionals.Delivery of incentives to employees on a fair basis, evaluation of performance without favour to any employee etc. are the general professional care examples of the workplace.Q2. Codes of ethics are the most concrete form of communication by which professions acknowledge their obligations to society. The role of a financial manager involves discharging one’s responsibilities while ensuring compliance with all the obligations espoused in the code of ethics. Give an example how a financial manager can apply a code of ethics on making decisions.Professional ethics or code of ethics obligatory morally for a financial manager are far greater than just being honest and straight. Finance manager is required to establish the boundaries preventing the potential conflict arousal with employer’s interests. Perfect, accurate and timely financial information provision is a basic code of ethics a financial manager need to follow. Besides finance manager needs to keep the confidentiality of the company’s financial activities from the ones who might use such information to buy and sell of company’s stock. Finance manager needs to take care that company is not breaking the law in any way as per finances.Q3. What is Business Ethics and professional ethics?Business ethics refer to mangers’ primary duty is to maximise the shareholders’ returns whereas, professional ethics require managers to act in a way to balance between the shareholders’ interest and others stakeholders’ interest.Q4. What is Integrity?Integrity in business refers to as the solidarity and probity of the business entity, and for a professional, it refers to as uprightness aa in despite being pressurised the professional will follow the standardised moral rules and ethics of doing business.Q5. How often does an organisation need to perform an audit trail to make sure all transactions are recording with due diligence? How does integrity play a big role in this section?It depends upon the nature and size of the business that how often they need to get their accounts on an audit. Audits are of two types; internal audit and external audit. Some companies with complex nature of a business and larger accounting heads go for audit twice a year. Integrity in audit results in an accurate, honest and complete reporting of accounts.Q6. CASE STUDY:You have been the finance director of a clothing retailer for ten years. The company’s yearend is 30Th June, and you are finalising the year-end accounts. You have recently been advised by the warehouse manager of a significant level of slow-moving stock. The stock in question is now more than nine months old and would normally have been written down some months previously. The shareholders are trying to sell the company, and the managing director (the majority shareholder) has told you that it is not necessary to write down the stock in the year-end accounts. You are sure that the managing director wants the financial statements to carry an inflated stock valuation because he has found a prospective buyer. The managing director has indicated to you that, if the proposed deal is successful, all employees will keep their jobs and you will receive a pay increase.What would you do?Answer:Following the professional ethics.I will get the old stock written down as soon as possible. Because even following the business ethics would require me to do so as the goodwill of the company will be greatly at stake if any legal action takes place and in that case shareholders’ will have to face a great loss of goodwill and associated profit.Week 6Task 1: Cash budget: service industryRequired:Prepare a cash budget for the three months, July to September to examine the cash flows projections (Use the spreadsheet template to prepare the cash budget).You are aware that there is some suppliers’ payment due in July and August. What relevant personnel you are required to discuss/negotiate the possible cash shortfall?The relevant personnel will be the cashier, financial manager and Dr Healer to discuss the issue with.3. What possible contingency plan you can implement to avoid the forecasted cash flow shortfallA contingency plan refers to an alternate prepared plan for a business to face an anticipated plan for a future significant event that is probable to occur. In the above situation, the contingency plan may be to reduce the expenses and consult the short-term creditors for a reasonable credit for the month of July to handle the emergency situation that might happen in the case of bad cash flow expected in the respective month and pay them in coming better projected months of August and September.Task 2: Alternative debt collection policiesAs the manager of Corby and Danes Ltd, you are concerned about the current collection policy from credit customers. The current policy is that all sales are to be made on credit, with the expectation that 70% of all accounts receivable are collected in the month immediately following the sale: 20% in the second month, 8% in the third month, and the balance written off as bad.The actual sales for the four months January to April were as follows:January $40 000; February $50 000; March $60 000; April $60 000The forecast sales for the next four months are:May $70 000; June $80 000; July $80 000; August $80 000You need a report that will show how much cash you can expect to collect each month from accounts receivable for the period February to August. You also like to know what the cash flow patterns would be if either of the two policies below were to be adopted from now (i.e. from May) on.Answer:MonthsMayJuneJulyAugustSales Actual70000800008000080000Current collections policy49000560005600056000140001600016000160005600640064006400Balance Written off1400160016001600Alternative policy:80% of the accounts receivable to be collected in the month following the sale, 10% in the second month, 8% in the third month and the balance written off as bad.MonthsMayJuneJulyAugustSales Actual70000800008000080000Alternate collections policy5600064000640006400070008000800080005600640064006400Balance wrote off1400160016001600Required:Show what the existing report on cash collection from accounts receivable looks like.The current policy and as well as the alternate policy for the collection of accounts receivables, both are in loss of the company and badly devised.Show how the additional reports revealing the cash flow situation under the proposed alternative policy would look.The bad cash flow policy may impact on other financial reports in a negative way, as the investors, creditors and lenders may analyse that company will not be able to pursue its operations effectively shortly. Such cash flow statement can affect the credibility of the company negatively.After Analysing the data which policy you would recommend improving the collection process for May, June and JulyThe current policy for collecting cash receivable is advisable to be improved by revising the collection methods, and instalment rates.3. Recommendation:The collection methods need to be revised and improved such as collection letters, calls and time limits.The instalment rates as per percentages are not profitable rather they are counting to the loss for the company, these need to be improved to meet the actual cost of operations and goods.Week 7Task 1 You are required to research, identify and evaluate available financial management software applications for implementation in a small business or enterprise.As a foundation to support your research and evaluation you are to prepare and deliver a written response addressing the following key criteria:▪ Price Sage Intacct; suitable for small and medium-size companies which cannot afford costly financial management applications.Quick books and PeachTree are also cost-effective software.▪ UsabilityAccuFund Accounting Suite is financial reporting solution with enhanced features; it helps non-profit organisations too in maintaining and smooth running of their financial operations.▪ Features and FunctionsNetSuite is business software allowing firms to plan financial management with resource management.▪ SuitabilityMultiview is the best software for the firms looking for an application suiting their existing operations.▪ Compatibility with other Software ApplicationsSAP Anywhere has many features with which financial managers and employees may be familiar with already in other software.▪ Technical SupportAdaptive insight provides web-based budgeting software including reporting and forecasting tools in it.▪ Training OpportunitiesPlanGuru is a business planning and budgeting solution for small businesses and non-profit organisations. It helps accountants in constructing reports, prepare the analysis.▪ Pros and ConsReliaBills is also a web-based accounting system providing online billing and invoicing tool. Being web-based it has technical pros and cons with it.▪ Your Recommendations My recommendation is SAP Anywhere which is highly featured with accounting tools for the modern fast-paced and web-based financial transactions culture.Task 2: CREATE AND WRITE A FORMAL BUSINESS PLANBRIEFDevelop a formal business plan for a small business or enterprise nominated by your Trainer and Assessor.To demonstrate competency, you will need to consider in your analysis the capabilities and resources of the new enterprise, vision, mission, trends and developments in the marketplace, comparative market information, and legal and ethical restraints on the proposed business activity.Answer:Business PlanBlue Chip BusinessIntroductionComplicated phenomena of information and communication are characteristic of today’s mass society. Because of complex sources of information and differences in socio-psychological and cultural backgrounds, the members of the mass society depend heavily on the mass media as the ultimate source of information. The information age is full of channels of information causing the information overload. At the same time, advanced technology has brought new competition for traditional publications in the news and information field; social media has replaced many traditional ways of information dissemination. Despite the challenges to the conventional publications they are making way into the information superhighway by adopting newer methods of production, marketing, and content specialisation. Different segments of the society look for the source of information which can address their information needs and wants. Magazines are one of the most appropriate channels of information for segmented markets with niche-oriented content and information. Magazines are a constantly growing line of mass communication with stronger editorial stances and greater niche marketing. Various types of magazines are serving the purpose of information and entertainment to the readers. Consumer magazines are one of the most popular forms of the magazine, in fact, the largest number of publications are consumer oriented. However, not a lot of magazines are providing business-related content to the business people in specific and the general public in general. My proposed business plan is to launch a specialised business magazine “ Blue Chip Business” for business people.VisionThe magazine intends to provide its audience with a specialised content to the audiences that is need and demand of today’s contemporary society where people are dependent on mass media for information.Objectives:To entrepreneurs a business project.To add up in the range of magazines serving business sector.To obtain experience in implementing business management.To accomplish the partial fulfilment of my academic course.Target Market:CEOs, top managers, middle managers, and executives and general business concerns.Competition:Competition is an inevitable market element you have to face while entering the new market. (Munns & Bjeirmi, 1996)The competitive business magazines do exist in the market, but our magazine will make it place by niche oriented information for the target market. “Blue Chip Business” aims at reaching the benchmark by adopting newer techniques and methods to make way into the industry and especially providing the quality content to its readers.Execution Plan:Marketing:To send a word out about our magazine to our target market different tools will be used including introductory E-mails and letters to the CEOs, manage(Robin et al., 2004)ers of the corporations and LLCs. Space on Newsstands will be acquired. Subscriptions, direct marketing and sampling technique, will also be used for marketing.Newspaper kiosk was situating: The movement area of the newsagent’s newspaper kiosk would be the most proper for the situating of our magazine. From our exploration, we revealed there were not all that many travel magazines as we expected so feel we would get great scope there. In any case, with our intended interest group, a position adjacent to the various young magazine could end up being more useful as it would draw in a greater number of looks than those of the general population who do travel and who looks particularly in the movement area. Retail outlets: Due to the idea of our intended interest group, we foresee our principle offering outlets are in aeroplane terminal flight parlours and auxiliary schools. In any case, we would likewise envision deal in newsagents, for example, WHSmith, who through Magazine Business Plan: Nomad Magazine Page 5 of 7 our examination into rivalry don’t stock a substantial choice of movement magazines, particularly those for the more youthful voyager (see statistical surveying area). Membership system: Readers will be urged to buy into our magazine through the setting of in-house promoting, showed in great positions. The membership offer will tempt perusers by offering them significant saving money on the cover cost and will keep running for a time of a year or year and a half. Endorsers will likewise be offered the opportunity to buy into the online version of the magazine, which will be altogether less expensive because it will cost almost no to execute. Supporters of this won’t get a printed version of the magazine, yet will be conceded get to, using the magazine’s site, to peruse a computerised, online duplicate of the magazine which they will have the capacity to download in an all-around discernable organisation. Non-supporters will have the capacity to purchase singular duplicates of the magazine online for a little coincidental instalment. However, this sum will be more prominent than the inevitable single cost through membership and will cost close to the printed copy cover cost. It is trusted that this will urge online perusers to buy into both of the recommended plans.Operations:Establishment of an office and interiorizing it with appropriate equipment and departments spaces.The phase of development of a strong team including staff writers, editors, and sub-editors photographers, marketing personnel, graphic designers, content writers, proofreaders, and photographers.Time Frame:The estimated time frame for the first publication, including execution of marketing and operations plan is three to four months.Estimated Cost breakdown:Estimation of the cost involved in a business startup is a necessary part of a business project plan. (Robin, Haynes, Paschino, Kroes, Oikawa, Getchell, Kazmi, Dyas, 2004) Estimated Cost of the first publication is $25,000 based on the estimated size, colours, type of paper used and the number of copies and compensations. The breakdown for startup expense is as below;Startup ExpensesAmount in $Legal affairs and consultants expense7,500Brochures5,000Stationery etc.2,500Rent7,000Equipment and software5,000First issue total27,000Monitoring and controlling:Editorial department will be headed and controlled by Chief- Editor. Similarly, every department will have a reporting authority whom relevant personnel will be reporting to on a daily basis. Additionally, following procedures will be adopted.Track records of attained circulation levels.Controlling costs while spending the maximum on subscription marketing in year one.Carefully monitoring response rates of all media executions.Achieving target advertising sales revenues.Strong editorial content in each issue.Making all production and circulation dates promptly manner.Communication and Key Metrics:For internal communication employees will use the assigned portals which will be software containing all the relevant features including memo generation. Internet, facsimile, telephone, and traditional methods would be channels for external communication.(William A. Sahlman, n.d.)The subscription will evaluate progression of the magazine, space enhancement on the newsstands and the scale of advertisers attracted.

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