BSBFIN501 Assessment 1

BSBFIN501 Assessment 1 V1 Page 1 of 26 Assessment method-based instructions and guidelines: Knowledge Test Assessment type  Written Questions Instructions provided to the student: Please refer to the Student Assessment Information Pack for full details on instructions and the pre- assessment checklist that you should check before attempting any assessment task. Assessment task description:  This is the first (1) assessment task you must successfully complete to be deemed competent in this unit of competency.  The Knowledge Test is comprised of nineteen (19) written questions  You must respond to all questions and submit them to your Trainer/Assessor.  You must answer all questions to the required level, e.g. provide an answer within the required word limit, to be deemed satisfactory in this task  You will receive your feedback within one (1) week, and you will be notified by your Trainer/Assessor when your results are available. Applicable conditions:  All knowledge tests are untimed and are conducted as open book assessment (this means you can refer to your textbook during the test).  You must read and respond to all questions.  You may handwrite/use a computer to answer the questions.  You must complete the task independently.  No marks or grades are allocated for this assessment task. The outcome of the task will be Satisfactory or Not Satisfactory.  As you complete this assessment task, you are predominately demonstrating your written skills and knowledge to your trainer/assessor. Resubmissions and reattempts:  Where a student’s answers are deemed not satisfactory after the first attempt, a resubmission attempt will be allowed.  The student may speak to their trainer/assessor if they have any difficulty in completing this task and require reasonable adjustments.  For more information, please refer to the Training Organisation’s Student Handbook. Location:  This assessment task may be completed in: ☐a classroom ☒ learning management system (i.e. Moodle),

☐workplace, ☐or an independent learning environment.  Your trainer/assessor will provide you with further information regarding the location for completing this assessment task. Instructions for answering the written questions:  Complete a written assessment consisting of a series of questions.  You will be required to answer all the questions correctly.  Do not start answering questions without understanding what is required. Read the questions carefully and critically analyse them for a few seconds; this will help you to identify what information is needed in the answer.  Your answers must demonstrate an understanding and application of the relevant concepts and critical thinking.  Be concise, to the point and write answers within the word-limit given to each question. Do not provide irrelevant information. Remember, quantity is not quality.  You must write your responses in your own words.  Use non-discriminatory language. The language used should not devalue, demean, or exclude individuals or groups based on attributes such as gender, disability, culture, race, religion, sexual preference or age. Gender-inclusive language should be used.  When you quote, paraphrase, summarise or copy information from other sources to write your answers or research your work, always acknowledge the source. Purpose of the assessment This assessment task is designed to evaluate student’s knowledge essential to undertake financial management in an organisation in a range of contexts and industry settings and knowledge regarding the following:  Knowledge to identify the purpose of the financial plan  Knowledge to implement the budget/financial plans and to measure the outcomes are achievable, accurate and comprehensible.  Knowledge to plan and execute the financial contingency plan  Knowledge to prepare a list of methods/techniques to disseminate the budget/financial plan  Knowledge to recognise the resources required to manage the financial management processes  Knowledge to identify factors that contribute to cost variations and expenditure overruns in a project  Knowledge to implement the Cost Monitoring and Controlling Techniques  Knowledge to describe the importance of the Quarterly Budget Report  Knowledge to explain the significance of the different type of information presented in the Quarterly Budget Report to the management  Knowledge to identify the types of data and information to be analysed to evaluate the effectiveness of financial management systems  Knowledge to identify the basic records that a business needs to keep for tax purposes  Knowledge to identify and recognise the financial reporting obligations of a company for auditing purpose  Knowledge to identify and document the fundamental principles of budgetary control

Explain the purpose of a financial plan. What are the key elements of a financial plan? Write your answer in 50-100 words. Financial planning is a step-by-step approach to meet one's life goals. A financial plan acts as a guide as you go through life's journey. Essentially, it helps you be in control of your income, expenses and investments such that you can manage your money and achieve your goals. A financial plan is a document containing a person’s current money situation and long-term monetary goals, as well as strategies to achieve those goals. A financial plan begins with a thorough evaluation of the person’s current financial state and future expectations and may be created independently or with the help of a certified financial planner. The key elements of a financial plan is: -Determining capital requirements, it will depend upon factors like cost of current and fixed assets, promotional expenses and long range planning. Capital requirements have to be looked with both aspects: short- term and long- term requirements -Determining capital structure, the capital structure is the composition of capital, i.e., the relative kind and proportion of capital required in the business. This includes decisions of debt- equity ratio- both short-term and long- term. -A finance manager ensures that the scarce financial resources are maximally utilized in the best possible manner at least cost in order to get maximum returns on investment. -Framing financial policies with regards to cash control, lending, borrowings, etc. c. What are the four main (4) types of financial planning? 1. Cash Flow Planning: Cash flow planning is a process where individuals calculate their present and future expenditures and strategize accordingly to achieve their financial goals. Cash Flow refers to inflow and outflow of money. For better financial planning, one should keep a check on his income and expenses. 2.Investment Planning: investment Planning is a process of identifying one’s goals in life and correspondingly prioritizing them. In the long run, These financial instruments could be equities, debt securities, mutual funds, fixed deposits, a small savings scheme, etc. 3. Insurance Planning: This is one of the most important aspects of financial planning because most of the problems in life come unannounced. It is better to secure oneself from these unpredictable risks and mitigate them in any way possible.Life and health insurance should be the topmost priorities out of a list of insurance coverages a person can get. Apart from this, one should also look for auto and home insurance. Tax Planning: Tax planning is the process of organising the affairs of a taxpayer or a group of taxpayers so that, as far as legally or commercially possible, the liability of the taxpayer or group of taxpayers to income and other taxes is minimised. Tax planning is not limited to complex, high risk or sophisticated arrangements. Tax minimization and proper tax-planning should be everyone’s priority if one wants to expand his/her wealth. You can invest in various tax-saving instruments to minimize taxable income.

Q2: What steps would you implement to ensure the clarification of budget/financial plans and to measure if the documented outcomes are achievable, accurate and comprehensible? Explain in 150-200 words. Stakeholder Analysis and Stakeholder Influence Stakeholder Analysis (Stakeholders Analysis) is a process of identifying these people before the project begins; grouping them according to their levels of participation, interest, and influence in the project; and determining how best to involve and communicate each of these stakeholder groups throughout. Stakeholder analysis related to the organization is involved. It helps to define the vision, mission and goals. The main objectives of the agency are correct. due to the agency not only have a relationship with the ministry, the owner and the service recipient but there are also other stakeholders. Stakeholder Influence, which influences the planning and Operations of the agency can be classified into 3 types as follows: (1) Internal Stakeholders, i.e. executives at all levels and Operational staf (2) direct stakeholders in receiving services ) such as Service recipients, partners, contractors, and sells equipment and materials for procurement according to the rules of supplies, etc. (3) Stakeholders in society but outside the organization such as Consumer Protection Board Food and Drug Administration Financial Institutions Council of the Chamber of Commerce The Federation of Thai Industries NGOs and the media, including formal and informal political groups, as well as the Courts of Justice and the Administrative Courts, which are responsible for overseeing and preventing to prevent and resolve

Q3: Answer the following:  In a project, why is it sometimes required to vary the initial budgets and financial plans? Explain in 50-100 words.  Prepare a list of six (6) steps to help you plan and execute your financial contingency plan. When we working on a project we need to make a budget for the project to fund the project while we working on it. The approved budget is what drives project funding . It will tell stakeholders how much money is needed and when it is needed. Your ability to get people, equipment, and materials when they are needed are dependent on the funding provided as a result of your budget. But in the process we might have some unexpected expenses that can comes up and need extra funds to handle it. That’s why we need to vary the initial budgets and financial plans for our project. • Prepare a list of six (6) steps to help you plan and execute your financial contingency plan. 1. Identify risks.-the company’s risks to five or six realistic scenarios that could truly derail your business. How likely are they, and how severe would their impact be? 2. Analyze your financial profile. Use all the financial planning and analysis tools you have to detail your operations and the markets you serve, including costs, cash flow and competitive positioning. This can give the company insights into the likelihood of various scenarios and their potential impact. 3. Analyze causes. Understand and document why each of these situations might emerge. 4. Prescribe actions. Detail the strategy for responding to each crisis by specifying and prioritizing which steps to take, how, by whom and in what time frame. 5. Track indicators. Based on this analysis, list the possible signs of trouble and come up with ways to track them to stay ahead of the situation. Inventory your assets and funding sources. Ask yourself these questions: How much do you have in cash reserves? Which assets are indispensable and need to be protected? Which assets would you consider shuttering or selling?

Q4: Answer the following: a. List any four (4) changes that can impact the budget/financial plan in a project. b. What processes would you use to negotiate these changes in budget/financial plan? Explain in 50-100 words.

- Goals, Goals is what we need to bring the team together and give a common objective. When the team all buys into the goal, they are unified in purpose and it creates synergy. - Roles, we need to be clearly defined so that everyone knows what to do and what others are doing. Roles make sure that everyone on the team has the opportunity and obligation to contribute. - Interpersonal Relationships, this kind of relationships are the glue that create trust, collaboration and connection. Most of my work personally in regards to leadership and teamwork is in helping others develop better interpersonal relationships. Our ability to connect, interact, network, work with, persuade, listen to, engage, serve, pay attention to and get to know others comes into play in every area of our lives – especially in teams. - Processes and Procedures, these are the rules which govern behavior, expectations and absolutely the consequences when standards are not met. By explicitly stating this, every person knows where they stand and what is expected. It is easy to be fair and people know the boundaries

Q6: Prepare a list of any six (6) methods/techniques to disseminate the budget/financial plan details to team members. 1. Identify the data to be collected. 2. Identify the appropriate sources of data. 3. Ensure currency, reliability and validity of the data. 4. Classify and code the data according to accounting and organisational principles. 5. Ca l cu l a t e co st s, p r o fit / l o ss a n a l y se s w h e r e n ee d e d . Assess the results of data analysis and provide formal or informal reports on your outcome Q7: Answer the following questions: a. Explain the role of financial management process in 30-50 words. b. What resources are required to manage the financial management processes? Write your answer in 100-150 words.

- Poor Site Management, Personalities clash just as often as a project’s site changes unexpectedly. An inherent trust gap between owners and contractors may already exist because of the natural conflict of interest between the two parties and it can have devastating impacts on a project’s momentum. - Changes in Project Scope, It’s a rare project that gets smaller over time; a project almost always grows, and with that growth, the costs. Many people defend “scope creep,” saying that it should be expected, as a project begins to take shape. Don’t fight it; embrace it, they say. - Lack of Leadership Experience A lack of project management experience can reveal itself in myriad ways: lack of planning, poor communication, insubordination and missed or unenforced deadlines, among them - Project Delays During the course of any project, it's fair to expect at least a few delays. All the moving parts, and people, practically guarantee that something or someone will not perform as planned. But as you surely know, there's a big diference between an isolated incident and a repetitive problem that can trigger some of the most frustrating causes of cost-escalation in project management. - Hiring the Wrong Team, if everything has been estimated correctly, the project plans are flawless and scope change is being managed effectively. Outside of all of that, overruns are still likely to occur if the team executing the work is not up to a certain level of standards. b. How can you measure these variations? Write your answer in 30- 50 words. - In order to avoid and prevent waste of money when the mistakes occurred and achieve the desired project outcomes, we need to take closer look for issues promptly like I have mentioned before. We need to be very careful in every aspects that involved in the project. If we do so hopefully the projects will run as planned.

Q9: Explain the following cost monitoring in 200-250 words: a. Earned Value Management or Analysis b. Variance Analysis a. Earned Value Management or Analysis Earned value management (EVM) is a project management methodology that integrates schedule, costs, and scope to measure project performance. Based on planned and actual values, EVM predicts the future and enables project managers to adjust accordingly. b. Variance Analysis Variance analysis is planned value, actual cost, and earned value numbers are fundamental to variance calculations. At this point, the project manager wants to know how far off we are from the project baseline. This can be determined through schedule and cost variance.

Q11: What is the importance of the Quarterly Budget Report? What information does the Quarterly Budget Report provide to the management? Write your answer in 200-250 words. Quarterly budget report is important because a quarterly budget report informs you whether the company has enough working capital to meet its needs. Working capital is the amount of cash your business has available to pay all expenses for the following 90 days. Your company's credit standing with its suppliers depends on timely payment, so you should immediately address any shortage in working capital. The information that this report provide to the management is the information of the expenditure, revenues, history, and financial health. A quarterly report is a summary or collection of unaudited financial statements, such as balance sheets, income statements, and cash flow statements, issued by companies every quarter (three months). In addition to reporting quarterly figures, these statements may also provide year- to-date and comparative (e.g., last year's quarter to this year's quarter) results. Publicly-traded companies must file their reports with the Securities Exchange Committee (SEC). Quarterly reports include key accounting and financial data for a company, including gross revenue, net profit, operational expenses, and cash flow. The Securities and Exchange Commission (SEC) requires issuers of publicly traded shares to file annual reports on Form 10-K and quarterly reports on Form 10-Q within 60 days of the end of the applicable period. These forms may include more detail than quarterly and annual reports

Q12: What types of data and information should be analysed to evaluate the effectiveness of financial management systems? Prepare a list of at least ten (10). - Vertical, this type of financial analysis involves looking at various components of the income statement and dividing them by revenue to express them as a percentage. For this exercise to be most effective, the results should be benchmarked against other companies in the same industry to see how well the company is performing. - Horizontal, this analysis involves taking several years of financial data and comparing them to each other to determine a growth rate. This will help an analyst determine if a company is growing or declining, and identify important trends. - Leverage, leverage ratios are one of the most common methods analysts use to evaluate company performance. - Profitability Profitability is a type of income statement analysis where an analyst assesses how attractive the economics of a business are. Common examples of profitability measures is like gross margin, EBITDA margin, and EBIT margin. - Growth Analyzing historical growth rates and projecting future ones are a big part of any financial analyst’s job. Common examples of analyzing growth is like yerar over year, regression analysis, and other forecasting method. - Efficiency, efficiency ratios are an essential part of any robust financial analysis. These ratios look at how well a company manages its assets and uses them to generate revenue and cash flow. - Scenario & Sensitivity Analysis, these analysis is the component of financial modeling and valuation is performing scenario and sensitivity analysis as a way of measuring risk. Since the task of building a model to value a company is an attempt to predict the future, it is inherently very uncertain. - Liquidity, this is a type of financial analysis that focuses on the balance sheet, particularly, a company’s ability to meet short-term obligations (those due in less than a year). Common examples of liquidity analysis include current ratio, cash ratio, acid test, and networking capital. Valuation Analysis, this is the process of estimating what a business is worth is a major component of financial analysis, and professionals in the industry spend a great deal of time building financial models in Excel. The value of a

Q14: Answer the following: a. According to A New Tax System (Goods and Services Tax) Act 1999, who must give GST returns? Write your answer in 50-100 words. b. When can a GST credit be claimed? Write your answer in 100-150 words. c. What are the four (4) exceptions where you can claim the GST credit you paid on a purchase you use to make your financial supply? Write your answer in 50-100 words.

a. According to A New Tax System (Goods and Services Tax) Act 1999, who must give GST returns? Write your answer in 50-100 words. - According to a new tax system (Goods and Services Tax) Act 1999, the one who must give GST returns is: 1. If you are * registered or * required to be registered , you must give to the Commissioner a * GST return for each tax period . 2. You must give the return whether or not: - your * net amount for the tax period is zero - you are liable for the GST on any * taxable supplies that are attributable to the tax period . b. When can a GST credit be claimed? Write your answer in 100-150 words. - You can claim GST credits if the following conditions apply: You intend to use your purchase solely or partly for your business, and the purchase does not relate to making input- taxed supplies. The purchase price included GST. You provide or are liable to provide payment for the item you purchased. c. What are the four (4) exceptions where you can claim the GST credit you paid on a purchase you use to make your financial supply? Write your answer in 50-100 words. - There are four exceptions where you can claim the GST credit you paid on a purchase you use to make your financial supply: 1. You use the purchase to make a financial supply through a business or a part of a business that you carry on outside Australia 2. You do not exceed the financial acquisitions threshold . 3. Your purchase relates to a borrowing you make, if certain conditions are met. Your purchase is a reduced credit acquisition that you use to make a financial supply Q15: Explain the following methods/techniques of reporting GST: a. Cash basis b. Non-cash basis (accruals). Write your answer in 250-300 words.