ASSESSMENT_TASK_1_BSBFIM601A_manage_finances - Copy.docx - Manage Finances BSBFIM601 Task 1 PROFIT BUDGET PROFIT BUDGET 2011\/12 Revenue Qtr1 Qtr 2 Qtr 3

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Manage Finances BSBFIM601 Task 1 PROFIT BUDGET PROFIT BUDGET 2011/12 Qtr1 Qtr 2 Qtr 3 Qtr 4 Revenue 20% 24% 26% 30% Sales 16,971,237 3,394,247 4,073,097 4,412,522 5,091,371 - Cost of goods sold 9,673,605 1,934,721 2,321,665 2,515,137 2,902,081 Gross profit 7,297,632 1,459,526 1,751,526 1,897,384 2,18,290 Gross profit % 43% 43% 43% 43% Expenses - Accounting Fees 10,000 2,500 2,500 2,500 2,500 - Interest Expense 84,508 21,127 21,127 21,127 21,127 - Bank charge 1,600 400 400 400 400 - Depreciation 170,000 42,500 42,500 42,500 42,500 -Insurance 13,390 3,348 3,348 3,348 3,348 - Store supplies 3,749 750 900 975 1,125 - Advertising 350,000 200,000 50,000 50,000 50,000 - Cleaning 16,282 3,256 3,908 4,233 4,885 -Repairs & Maintenance 64,272 16,068 16,068 16,068 16,068 - Rent 2,640,508 660,127 660,127 660,127 660,127 -Telephone 14,997 2,997 3,599 3,899 4,499 -Electricity Expense 26,780 5,356 6,427 6,963 8,034
-Luxury Car Tax 12,000 12,000 - - - -Fringe Benefit Tax 28,000 7,000 7,000 7,000 7,000 -Superannuation 187,020 37,404 44,885 48,625 56,106 -Wages & salaries 2,078,000 415,600 498,720 540,280 623,400 -Payroll Tax 98,705 19,741 23,689 25,663 29,612 -Workers’ Compensation 41,560 8,312 9,974 10,806 12,468 Total Expenses 5,841,371 1,458,488 1,395,172 1,444,514 1,543,197 Net profit (Before Tax) 1,456,261 1,038 356,260 452,871 646,092 Income Tax 436,878 311 106,878 135,861 193,828 Net Profit 1,019,383 727 249,382 317,009 452,265 Sales Budget SALES 2010/11 Qtr1 Qtr2 Qtr3 Qtr4 BUDGET Total Budget 20% 24% 26% 30% Total Sales 16,971,23 7 3,394,247 4,073,097 4,412,522 5,091,372 1 Bathroom fitting 30% 5,091,371 1,018,274 1,221,929 1,323,756 1,527,411 Bedroom fitting 25% 4,242,371 842,562 1,018,274 1,103,130 1,272,843
Mirrors 15% 2,545,685 509,137 610,965 661,878 763,706 Decorative items 10% 1,697,124 339,425 407,310 441,252 509,137 Lighting Fixtures 20% 3,394,247 678,849 814,619 882,504 1,018,274 GST Cash flow analysis CASH FLOW ANALYSIS- GST 2010/11 Qtr1 Qtr2 Qtr3 Qtr4 GST Collected 1,697,124 339,425 407,310 441,252 509,137 Less GST Paid 12,281,358 282,913 306,854 326,325 365,267 GST Payable 415,765 56,512 100,456 114,927 143,870 Aged Debtors budget AGED DEBETORS BUDGET TOTAL Qtr1 Qtr2 Qtr3 Qtr4 Sales 16,971,237 3,394,247 4,073,097 4,412,522 5,091,371 % Debtors Sales 20% 20% 20% 20% Total Debtors 100% 678,849 814,619 882,504 1,018,274 Current 84% 570,234 684,280 741,304 855,350 30 Days 10% 67,885 81,462 88,250 101,827 60 Days 5% 33,942 40,731 44,125 50,914 90 Days 1% 6,788 8,146 8,825 10,183 Budget notes:- Reason for profit and loses:- Profits prior year are $851,188 in 2008 and $1,019,499 in 2009. Reasons are that there is an increasing customer base and the business is built on superior after sales service.
Effectiveness of existing financial management approaches Inadequate analysis of revenue/expense to produce an informed estimate. Lack of computer software to produce timely and detailed reports. Too much reliance on qualitative input rather than balancing it with quantitative data and analysis . Comment on effectiveness of existing financial management approaches:- According to my assumptions future sales same sales growth 2010/11 as 2009/10. Inflation will be 4% per annual. Gross profit rate expected to reduce by 1% All assumption basis form budget Sales breakup – bathroom fittings 30%, bedroom fittings 25%, mirrors 15% and decorative items 10%, lighting fixtures 20%. Increase the advertising budget by $70,000 over the 2009/10 – $200,000 is planned for the first quarter with the balance apportioned equally over the following three quarters. Increase wages and salaries by $172,500 over the 2009/10 amounts. 2010/11 target apportioned across the quarters in the same % as was achieved in 2009/10. Accounting fees fixed amount of $10,000. Interest charges $84,508. Bank charges same as 2009. New expense such as store supplies –2008/09 results was $3,500 of the cleaning expense and $3,605 of the 2009/10 result. 1. The statutory requirements for tax compliances are listed below: * 9% of wages and salaries is to be calculated as superannuation for every quarter * 4.75% is payroll tax of wages and salaries for every quarter * Worker compensation is 2% of salaries and wages for every quarter * For every quarter the company tax is 30% of net profit before taxes.

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