manage finance

Question 1.

· Analyze the profit and loss statement.

· Identify profit and loss

Question 2

· Reason for profit or loss

Question 3

· Critical dates

· How Houzit pty ltd can manage slow periods

Question 4

· Analyze cash flow

· Operation activity (day to day activity)

· Investment activity

· Financial activity

Question 5

· Statutory requirements for company

· Tax liabilities need to identify

Question 6.

· Find out the existing software

· Recommend new software

· Benefit of new software

· Why it is suitability

Activity 2. No need to do

Sale and profit budget

Notes: - Assumption

· Cost of good sold is the inverse of the gross profit rate and is determined by the quarterly sales budget.

· Gross profit rate reduce by 1 % on the 2016/17 to getting result for hope that lower price of the products would help to maintain or increase sales even in difficult trading conditions. 2015/16 gross profits are 44%.

· Accounting fees have been negotiated foe the year at a fixed amount of $10000 divided equally each quarter.

· Interest charges on the bank loans accepted to a reduced amount of $84508 equal amount for each quarter.

· Whatever bank charges in 2016 as it for 2017 as well, but equal for each quarter.

· For store supplies in 2014/15 result was $3500 of the cleaning expenses we assumed. For 2015/16 was $3605. Store supplies we assume same as cleaning expenses and add with 4% of inflation rate.

· Depreciation from 2016 will it for 2017 and allocated equal amount each quarter.

· Advertising budget increased by $70000 over 2015/16 to added for total advertising cost in 2015/16 as a result of hope that Houzit can secure a grater market share in a constricting.

· Following expenses are expected to increase by the determined inflation rate in the business plan summary: -

· Insurance- apportioned in equal amounts each quarter.

· Store supplies- is calculated for each quarter using same % determined by the sales for each quarter.

· Cleaning- is calculated for each quarter using same % determined by the sales for each quarter.

· Repaired and maintenance- apportioned in equal amounts each quarter.

· Rent- apportioned in equal amounts each quarter.

· Telephone- is calculated for each quarter using same % determined by the sales for each quarter.

· Electricity- is calculated for each quarter using same % determined by the sales for each quarter.

· Fridge benefit tax is calculated same as 2016 and total amount distributed equally for each quarter.

· Income tax is 30% of net profit before tax calculates for each quarter.

· Same % determined by sales for each quarter, which calculate wages and salaries for each quarter.

· Superannuation is 9% from wages and salaries for each quarter.

· Payroll tax is 4.75 from wages and salaries from each quarter.

· Workers’ compensation is 2% from wages and salaries from each quarter.

· As per Australian Luxury car tax 33%. As per our case study there are 2 types of cars: -

· Efficient car

· Inefficient car

For 2016 threshold is $64132

$97466-$64132

=$33334*33%

=$11000

GST cash flow budget

Note: - Assumptions

· In GST collected is 10% from total sales. Is calculated for each quarter using same % determined by the sales for each quarter

· In GST paid where we including 10% of total cost of good sales.

· Capital purchase planned for the year is the luxury car for chairman 10% from a new car-costing $97466.

Aged debtors

Note: - Assumptions

· Total sales are calculated for each quarter using same % determined by the sales for each quarter.

· Debtor’s balance at the end of each quarter is usually about 20% of the quarter’s sales.

· Debtors balances 1% of the total debtors is overdue 90 days and over.

· Debtors balances 5% of the total debtors is overdue 60 days and over.

· Debtors balances 10% of the total debtors is overdue 30 days and over.

· A current debtor is 84%.

Activity 3. From case study

1. Reporting on financial activity from activity 2

· Sales & profit budget

· GST cash flow

· Aged debtors

2. Identify & priorities issues

3. Recommendation

4. Circulate budget

· How you circulate budget.

· When you circulate budget

· To whom you circulate budget

· Report requirements

Task 2. Pg. 22, 24, 25 case study

a) Introduction

b) Body part

· Financial management software

· Managing risks of misappropriation of funds from case study need 5 risks from there.

· Ensuring systems are in place

· Internal control system

· 1 system they can implements to control finance

· Maintaining an audit trials

· Compliances with due diligences

c) Conclusion