BSBFIM801 Manage Financial Resources-2

Question :

Assignment No. 2 – CASE STUDY

Tasks to Be Completed:

A short financial plan for the club for the financial years 2018/18, 2019/20 and 2020/21.
A budget (cash-flow forecast) for the financial year 2018/19
A projected Profit & Loss Statement for the financial year period 2018/19, including what variations for each line item you and your Committee would find acceptable
Projected Balance Sheet as at 30^th June 2019.
Assumptions List (see scenario above)
A description of any financial risks facing the club over the next 3 financial years.

Answer :

Assignment No. 2- Case Study

1. A short financial plan for the club for the financial years 2018/18, 2019/20 and 2020/21.

Income	$	$
Sales	$5,846,465.00
Services	$5,646,546.00
Other Income	$6,464,664.00
		$17,957,675.00
Total Income

Expenses	$	$
Accounting	$2,515,465.00
Advertisement	$6,546,465.00
Bank Charges	$6,546,545.00
Cost of goods sold	$1,212,233.00
		$16,820,708.00
Total Expenses

Net Profit/Loss		$1,136,967.00

2. A budget (cash-flow forecast) for the financial year 2018/19

Financial Table 6 -CASH FLOW FORECAST
Business Plan: 5.5
Business Name:	0
			0	0	0	0	0	0	1	1	1	1	1	1
			JUL	AUG	SEP	OCT	NOV	DEC	JAN	FEB	MAR	APR	MAY	JUN	Totals
CASH INFLOW
Cash sales		excluding GST	1,348,000	1,468,500	1,318,000	1,314,500	1,298,250	1,272,900	1,240,750	1,403,500	1,645,850	1,744,000	1,866,300	1,619,800	17,540,350
Credit sales payments		excluding GST		120,699	126,136	130,180	128,571	126,061	122,877	138,995	162,995	172,716	184,828	160,416	1,574,473
Bank loans			4,331,353	4,646,514	4,161,132	5,354,552	4,132,321	3,545,646	4,165,165	1,351,534	3,155,821	3,545,841	3,456,415	5,663,512	47,509,806
Sale of assets			6,656,565	2,123,555	4,684,645	2,232,124	1,651,658	5,456,452	3,213,165	3,213,545	5,456,562	2,311,446	6,458,848	4,848,846	48,307,411
Other income (specify)		excluding GST	6,686,546	6,564,864	546,546	3,121,231	2,131,358	3,468,545	465,468	4,454,656	4,353,021	3,213,846	4,564,652	4,646,862	44,217,595
A. RECEIPTS			19,022,464	14,924,132	10,836,459	12,152,587	9,342,158	13,869,604	9,207,425	10,562,230	14,774,249	10,987,849	16,531,043	16,939,436	159,149,635

CASH OUTFLOW
Cost of sales			1,343,000	1,447,000	1,445,500	1,518,000	1,673,500	1,574,500	1,513,650	1,640,800	1,873,500	1,958,000	2,110,100	1,779,900	19,877,450
Accounting fees			120,000	123,200	126,400	129,600	132,800	136,000	139,200	142,400	145,600	148,800	152,000	155,200	1,651,200
Purchases - plant and equipment			450,000	465,000	480,000	495,000	510,000	525,000	540,000	555,000	570,000	585,000	600,000	615,000	6,390,000
Purchases - sundry materials not in cost of goods sold			400,000	350,000	300,000	350,000	400,000	500,000	453,333	473,333	493,333	513,333	533,333	553,333	5,320,000
Advertising			265,464	223,456	452,115	216,854	462,315	458,621	491,181	532,527	573,872	615,218	656,564	697,910	5,646,097
Cartage			126,545	321,315	321,355	115,133	123,213	121,546	265,656	564,565	656,465	564,546	565,456	454,846	4,200,641
Electricity / gas			321,354	111,122	154,623	232,646	121,321	415,432	125,325	123,354	415,464	453,215	453,525	453,215	3,380,596
Insurances			426,512	213,546	322,154	452,216	546,581	535,844	583,725	631,606	679,487	727,367	775,248	823,129	6,717,415
Leasing of equipment			548,654	654,245	759,836	865,427	971,018	1,076,609	1,182,200	1,287,791	1,393,382	1,498,973	1,604,564	1,710,155	13,552,854
Legal expenses			878,645	846,464	814,283	782,102	749,921	717,740	685,559	653,378	621,197	589,016	556,835	524,654	8,419,794
Motor vehicle expenses			232,315	452,434	672,553	892,672	1,112,791	1,332,910	1,553,029	1,773,148	1,993,267	2,213,386	2,433,505	2,653,624	17,315,634
Printing and postage			454,662	554,624	654,586	754,548	854,510	954,472	1,054,434	1,154,396	1,254,358	1,354,320	1,454,282	1,554,244	12,053,436
Rent / lease of property			213,156	233,315	253,474	273,633	293,792	313,951	334,110	354,269	374,428	394,587	414,746	434,905	3,888,366
Repairs and maintenance			241,158	255,465	269,772	284,079	298,386	312,693	327,000	341,307	355,614	369,921	384,228	398,535	3,838,158
Stationery and office supplies			484,652	498,642	512,632	526,622	540,612	554,602	568,592	582,582	596,572	610,562	624,552	638,542	6,739,164
Telephone			456,665	494,132	531,599	569,066	606,533	644,000	681,467	718,934	756,401	793,868	831,335	868,802	7,952,802
Others (specify)			545,466	652,424	759,382	866,340	973,298	1,080,256	1,187,214	1,294,172	1,401,130	1,508,088	1,615,046	1,722,004	13,604,820
			465,465	485,624	505,783	525,942	546,101	566,260	586,419	606,578	626,737	646,896	667,055	687,214	6,916,074
			488,652	542,123	595,594	649,065	702,536	756,007	809,478	862,949	916,420	969,891	1,023,362	1,076,833	9,392,910
			884,646	786,545	688,444	590,343	492,242	394,141	296,040	197,939	99,838	1,737	-96,364	-194,465	4,141,086
Bank interest and charges		(no GST)	468,464	485,622	502,780	519,938	537,096	554,254	571,412	588,570	605,728	622,886	640,044	657,202	6,753,996
Commissions		(no GST)	465,588	546,526	627,464	708,402	789,340	870,278	951,216	1,032,154	1,113,092	1,194,030	1,274,968	1,355,906	10,928,964
Employee wages		(no GST)	565,616	484,546	403,476	322,406	241,336	160,266	79,196	-1,874	-82,944	-164,014	-245,084	-326,154	1,436,772
Hire purchase payments		(no GST)	234,584	321,348	408,112	494,876	581,640	668,404	755,168	841,932	928,696	1,015,460	1,102,224	1,188,988	8,541,432
Loan repayments		(no GST)	845,465	846,542	847,619	848,696	849,773	850,850	851,927	853,004	854,081	855,158	856,235	857,312	10,216,662
Owner's drawings and / or dividends		(no GST)	2,410,093	2,289,587	2,173,049	2,053,832	1,935,261	1,816,672	1,698,065	1,579,551	1,460,990	1,342,430	1,223,869	1,105,308	21,088,707
B. BUSINESS EXPENSES			14,336,821	14,684,847	15,582,585	16,037,438	17,045,916	17,891,308	18,284,597	19,384,365	20,676,709	21,382,674	22,211,628	22,446,142	219,965,029

C. GST RECEIVED			803,455	815,406	199,068	456,591	355,818	486,751	182,909	599,715	616,187	513,056	661,578	642,708	6,333,242
Input Tax Credits (GST Paid)			849,728	882,789	965,462	1,008,117	1,101,043	1,179,144	1,216,147	1,317,366	1,436,097	1,501,520	1,578,125	1,600,689	14,636,227
D. NET GST PAYABLE						-880,050			-1,989,144			-2,570,798

Tax Instalment Rate						-880050			-1989144			-2570798
E. TAX PAYABLE						-15,998,684,926,472			-25,842,155,960,397			-35,960,609,737,872

F. NET CASH FLOW [(A+C)-(B+D+E)]			5,489,098	1,054,690	-4,547,057	15,998,682,378,263	-7,347,940	-3,534,954	25,842,149,055,279	-8,222,420	-5,286,273	35,960,602,426,901	-5,019,008	-4,863,999

G. OPENING BALANCE (cash at start of month)				5,489,098	6,543,789	1,996,731	15,998,684,374,994	15,998,677,027,055	15,998,673,492,101	41,840,822,547,380	41,840,814,324,960	41,840,809,038,687	77,801,411,465,588	77,801,406,446,580

H. CLOSING BALANCE (cash at end of month (G+F))			5,489,098	6,543,789	1,996,731	15,998,684,374,994	15,998,677,027,055	15,998,673,492,101	41,840,822,547,380	41,840,814,324,960	41,840,809,038,687	77,801,411,465,588	77,801,406,446,580	77,801,401,582,582

3. A projected Profit & Loss Statement for the financial year period 2018/19, including what variations for each line item you and your Committee would find acceptable

Financial Table 7 -PROFIT AND LOSS PROJECTION
Business Plan: 5.6.1
Business Name:	0					DEPRECIATION SCHEDULE - Small Business Tax Concessions						DEPRECIATION SCHEDULE - No Concessions

Income					FIXED ASSET	ADJUSTABLE	DEP.	VALUE OF	% BUSINESS	BUSINESS	FIXED ASSET	ADJUSTABLE	EFFECTIVE	DEP.	VALUE OF	% BUSINESS	BUSINESS
Total sales			$ 19,114,823			VALUE	RATE *	DEP.	USE	DEP.		VALUE	LIFE (Yrs) *	RATE * *	DEP.	USE	DEP.
Other income from Cash Flow			$ 44,217,595		A. From Establishment						A.From Establishment
A. TOTAL BUSINESS INCOME				$ 63,332,418	Land charge	$977,488.00	5%	$48,874.40	10%	$4,887.44	Land charge	$977,488.00	40	10%	$10,712.20	15%	$1,606.83
					machinery	$782,441.00	5%	$39,122.05	10%	$3,912.21	machinery	$782,441.00	10	10%	$8,574.70	15%	$1,286.20
B. COST OF SALES				$ 18,070,409	labor	$6,863,051.00	5%	$343,152.55	10%	$34,315.26	labor	$6,863,051.00	10	10%	$75,211.52	15%	$11,281.73
					Furniture & Fittings	$270,046.00	5%	$13,502.30	10%	$1,350.23	Furniture & Fittings	$270,046.00	15	10%	$2,959.41	15%	$ 443.91
		C. GROSS PROFIT (A - B)		$ 45,262,009	Selling price to retailers	$1,213,449.00	5%	$60,672.45	10%	$6,067.25	Selling price to retailers	$1,213,449.00	3	10%	$13,298.07	15%	$1,994.71
					Corporate allocation	$776,262.00	5%	$38,813.10	10%	$3,881.31	Corporate allocation	$776,262.00	2	10%	$8,506.98	15%	$1,276.05
Expenditure					manufacturer's suggested retail price	$759,810.00	5%	$37,990.50	10%	$3,799.05	manufacturer's suggested retail price	$759,810.00	2	10%	$8,326.68	15%	$1,249.00
Accounting fees			$ 1,651,200		Buildings	$1,243,183.00	5%	$62,159.15	10%	$6,215.92	Buildings	$1,243,183.00	40	10%	$13,623.92	15%	$2,043.59
Advertising			$ 5,646,097		Storage	$6,033,754.00	5%	$301,687.70	10%	$30,168.77	Storage	$6,033,754.00	1	10%	$66,123.33	15%	$9,918.50
Bank interest and charges			$ 6,753,996		Overhead	$107,780.00	5%	$5,389.00	10%	$ 538.90	Overhead	$107,780.00	1	10%	$1,181.15	15%	$ 177.17
Cartage			$ 4,200,641		machinery depreciation	$119,014.00	5%	$5,950.70	10%	$ 595.07	machinery depreciation	$119,014.00	5	10%	$1,304.26	15%	$ 195.64
Commissions			$ 10,928,964		Real estate	$568,643.00	5%	$28,432.15	10%	$2,843.22	Real estate	$568,643.00	40	10%	$6,231.70	15%	$ 934.76
Depreciation			$ 749,961		others real estate	$789,197.00	5%	$39,459.85	10%	$3,945.99	others real estate	$789,197.00	15	10%	$8,648.73	15%	$1,297.31
Electricity / gas			$ 3,380,596		others	$1,043,034.00	5%	$52,151.70	10%	$5,215.17	others	$1,043,034.00	10	10%	$11,430.51	15%	$1,714.58
Employees wages			$ 1,436,772		B. Ongoing Purchases						B.Ongoing Purchases
Hire purchase payments			$ 8,541,432		Accounting	$1,651,200.00	5%	$82,560.00	10%	$8,256.00	Accounting	$1,651,200.00		10%	$165,120.00	15%	$24,768.00
Insurances			$ 6,717,415		Advertisement	$5,646,097.00	5%	$282,304.85	10%	$28,230.49	Advertisement	$5,646,097.00		10%	$564,609.70	15%	$84,691.46
Leasing of equipment			$ 13,552,854		Bank and Charge	$6,753,996.00	5%	$337,699.80	10%	$33,769.98	Bank and Charge	$6,753,996.00		10%	$675,399.60	15%	$101,309.94
Legal expenses			$ 8,419,794		Estimated taxes	$4,200,641.00	5%	$210,032.05	10%	$21,003.21	Estimated taxes	$4,200,641.00		10%	$420,064.10	15%	$63,009.62
Motor vehicle expenses			$ 17,315,634		Equipment service	$10,928,964.00	5%	$546,448.20	10%	$54,644.82	Equipment service	$10,928,964.00		10%	$1,092,896.40	15%	$163,934.46
Purchases - sundry materials (not in cost of goods sold)			$ 5,320,000		inventory purchase	$107,736.00	5%	$5,386.80	10%	$ 538.68	inventory purchase	$107,736.00		10%	$10,773.60	15%	$1,616.04
Printing and postage			$ 12,053,436		legal expenses	$3,380,596.00	5%	$169,029.80	10%	$16,902.98	legal expenses	$3,380,596.00		10%	$338,059.60	15%	$50,708.94
Rent / lease of property			$ 3,888,366		Office supplies	$1,436,772.00	5%	$71,838.60	10%	$7,183.86	Office supplies	$1,436,772.00		10%	$143,677.20	15%	$21,551.58
Repairs and maintenance			$ 3,838,158		Payroll	$8,541,432.00	5%	$427,071.60	10%	$42,707.16	Payroll	$8,541,432.00		10%	$854,143.20	15%	$128,121.48
Stationery and office supplies			$ 6,739,164		printing	$6,717,415.00	5%	$335,870.75	10%	$33,587.08	printing	$6,717,415.00		10%	$671,741.50	15%	$100,761.23
Telephone			$ 7,952,802		rent	$13,552,854.00	5%	$677,642.70	10%	$67,764.27	rent	$13,552,854.00		10%	$1,355,285.40	15%	$203,292.81
Others (specify)			$ 13,604,820		vehicle expenses	$8,419,794.00	5%	$420,989.70	10%	$42,098.97	vehicle expenses	$8,419,794.00		10%	$841,979.40	15%	$126,296.91
Interest			$ 6,916,074		Salaries	$17,315,634.00	5%	$865,781.70	10%	$86,578.17	Salaries	$17,315,634.00		10%	$1,731,563.40	15%	$259,734.51
Utilities			$ 9,392,910		Leasing	$5,320,000.00	5%	$266,000.00	10%	$26,600.00	Leasing	$5,320,000.00		10%	$532,000.00	15%	$79,800.00
Variable overhead costs			$ 4,141,086		Maintenance	$12,053,436.00	5%	$602,671.80	10%	$60,267.18	Maintenance	$12,053,436.00		10%	$1,205,343.60	15%	$180,801.54
					Utilities	$3,888,366.00	5%	$194,418.30	10%	$19,441.83	Utilities	$3,888,366.00		10%	$388,836.60	15%	$58,325.49
(Input Tax Credits excluding Cost of Sales)			$ 12,829,186		Insurance	$3,838,158.00	5%	$191,907.90	10%	$19,190.79	Insurance	$3,838,158.00		10%	$383,815.80	15%	$57,572.37
					Interest	$6,739,164.00	5%	$336,958.20	10%	$33,695.82	Interest	$6,739,164.00		10%	$673,916.40	15%	$101,087.46
D. TOTAL EXPENSES			$ 150,312,986		Variable overhead costs	$ 7,952,802.00	5%	$397,640.10	10%	$39,764.01	Variable overhead costs	$7,952,802.00		10%	$795,280.20	15%	$119,292.03
					TOTAL BUSINESS DEPRECIATION					$749,961.05	TOTAL BUSINESS DEPRECIATION						$1,962,095.83
		E. NET PROFIT (C - D)*		-$ 105,050,977
* The net profit should be sufficient to cover the following:					*Consult your accountant, or the ATO publication Guide to Depreciating Assets (available online at www.ato.gov.au)						*Consult your accountant, or the ATO publication Guide to Depreciating Assets (available online at www.ato.gov.au)
					regarding Depreciation Rates.						regarding Effective Life Schedules.
Coverage
Estimated tax liability			-$ 77,801,450,624,742								* * Consult your accountant, or the ATO publication Guide to Depreciating Assets (available online at www.ato.gov.au)
Loan repayments			$ 10,216,662								methods for calculating depreciation rates.
Owners drawings and / or dividends			$ 21,088,707
Purchases - plant and equipment			$ 6,390,000


		F. TOTAL COVERAGE		-$ 77,801,412,929,373

		G. PROFIT RESERVES		$77,801,307,878,396

4. Projected Balance Sheet as at 30^th June 2019.

Financial Table 8 -BALANCE SHEET
Business Plan: 5.7.1
Business Name:	0
		Date:

CURRENT ASSETS		CURRENT LIABILITIES

Cash	$ 95,000.00	Creditors	$ 3,211,543.00
Debtors	$2,354,556.00	Bank overdraft	$231,154.00
Stock on hand	$1,583,288.00	Short-term loans	$1,356,465.00

TOTAL CURRENT	$ 4,032,844.00	TOTAL CURRENT	$ 4,799,162.00
ASSETS		LIABILITIES


FIXED ASSETS		NON-CURRENT LIABILITIES

Land	$ 977,488.00	Long-term loans	$ 2,135,454.00
Buildings	$1,243,183.00	Mortgage	$1,836,452.00
Plant and equipment	$ 270,046.00
Vehicle(s)	$782,441.00


Other	$ 1,043,034.00

TOTAL FIXED ASSETS	$ 4,316,192.00	TOTAL NON-CURRENT	$ 3,971,906.00
		LIABILITIES


INTANGIBLE ASSETS

Goodwill	$ 450,000.00
Patents, copyright, etc.	$ 250,000.00

TOTAL INTANGIBLE	$ 700,000.00
ASSETS



TOTAL ASSETS	$ 9,049,036.00	TOTAL LIABILITIES	$ 8,771,068.00



NET ASSETS (TOTAL ASSETS - TOTAL LIABILITIES)		$277,968.00



REPRESENTED BY: OWNER'S EQUITY

Opening equity	$ 4,232,152.00
Retained profit	$41,234,533.00

TOTAL EQUITY	$ 45,466,685.00

5. Assumptions List (see scenario above)

It has been assumed that growth rate of sales remains constant over the year.
The accounting has been made on accrual basis.
While preparing the cash budget it has been assumed that credit closing cash balance needs to be adjusted by taking short-term loans.

6. A description of any financial risks facing the club over the next 3 financial years

The company has been facing loss as per the calculations that have been done under this consideration the company is finding it difficult to take any decisions for the coming years.

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