CAQNDIDATE RESOURCE WITH SIMULATED ONLINE … · 19 BSBFIM601A/02 Establish Budgets and Allocate...

MANAGE FINANCES

CAQNDIDATE RESOURCE WITH SIMULATED ONLINE BUSINESS ASSESSMENT

BSBFIM601A

Precision Group (Australia) Pty Ltd

9 Koppen Tce, Cairns, QLD, 4870

Email: [email protected]

Website: www.precisiongroup.com.au

© Precision Group (Australia) Pty Ltd

BSBFIM601A

Manage Finances

ISBN: 978-1-74238-

Copyright Notice

No part of this book may be reproduced in any form or by any

means, electronic or mechanical, including photocopying or

recording, or by an information retrieval system without written

permission from Precision Group (Australia) Pty Ltd. Legal action

may be taken against any person who infringes their copyright

through unauthorised copying.

These terms are subject to the conditions prescribed under the

Australian Copyright Act 1968.

Copying for Educational Purposes

The Australian Copyright Act 1968 allows 10% of this book to be

copied by any educational institute for educational purposes,

provided that the institute (or the body that administers it) has

given a remuneration notice to the Copyright Agency Limited

(CAL) under the Act. For more information, email info@copyright.

com.au or visit www.copyright.com.au for other contact details.

Disclaimer

Precision Group has made a great effort to ensure that this

material is free from error or omissions. However, you should

conduct your own enquiries and seek professional advice before

relying on any fact, statement or matter contained in this book.

Precision Group (Australia) Pty Ltd is not responsible for any

injury, loss or damage as a result of material included or omitted

from this material. Information in this course material is current at

the time of publication.

1Candidate Resource BSBFIM601A Manage Finances© Precision Group (Australia) Pty Ltd

Table of Contents

2 Legend3 Qualification Pathways4 Qualification Rules5 Introduction7 BSBFIM601A/01 Plan for Financial Management Key Points

Review and analyse previous financial data to establish areas which have generated a profit or loss

Undertake research to review reasons for previous profit and loss

Review business plan to establish critical dates and initiatives that will require or generate resources in next financial cycle

Analyse cash flow trends

Review statutory requirements for compliance and liabilities for tax

Review existing software and its suitability for financial management

17 ‘True’ or ‘False’ Quiz

19 BSBFIM601A/02 Establish Budgets and Allocate Funds BSBFIM601A/03 Implement Budgets Key Points

Use previous financial data to determine allocations for resources

Make informed estimates of new items for inclusion in budget

Prepare budgets in accordance with organisational requirements and statutory requirements

Circulate budgets and ensure managers and supervisors are clear about budgets, reporting requirements and financial delegations

Manage risks by checking there are no opportunities for misappropriation of funds and that systems are in place to properly record all financial transactions

Review profit and loss statements, cash flows and ageing summaries

Revise budgets, as required, to deal with contingencies

Maintain audit trails to ensure accurate tracking and to identify discrepancies between agreed and actual allocations

Ensure compliance with due diligence


33 BSBFIM601A/04 Report on Finances Key Points

Ensure structure and format of reports are clear and conform to organisational and statutory requirements

2 Candidate Resource BSBFIM601A Manage Finances© Precision Group (Australia) Pty Ltd

Identify and prioritise significant issues in statements, including comparative financial performances for review and decision making

Prepare recommendations to ensure financial viability of the organisation

Evaluate the effectiveness of financial management processes


40 Summary41 Bibliography43 Assessment Pack

Legend

This symbol indicates the beginning of new content. The bold title matches the content of the competency and they will help you to find the section to reference for your assessment activities.

Activity: Whenever you see this symbol, there is an activity to carry out which has been designed to help reinforce the learning about the topic and take some action.

This symbol is used at the end of a section to indicate the summary key points of the previous section.

This symbol is used to indicate an answer to the Candidate’s questions or notes to assist the Facilitator.

Use considered risk taking in your ‘grey’ area

...and others will follow you!


“There are always two choices. Two paths to take. One is easy. And its only reward is that it’s easy”. Source Unknown

This unit of competency is provided to meet the requirements of BSB07 Business Services Training Package although can be used in a range of different qualifications. The BSB07 Business Services Training Package does not state how a qualification is to be achieved. Rather, Registered Training Organisations are required to use the qualification rules to ensure the needs of the learner and business customer are met. This is to be achieved through the development of effective learning programs delivered in an order which meets the stated needs of nominated candidates and business customers.

Qualification Pathways


Qualification requirements include core and elective units. The unit mix is determined by specific unit of competency requirements which are stated in the qualification description. Registered Training Organisations then work with learners and business customers to select elective units relevant to the work outcome, local industry requirements and the qualification level.

All vocational education qualifications must lead to a work outcome. BSB07 Business Services Training Package qualifications allow for Registered Training Organisations (RTOs) to vary programs to meet:

Specific needs of a business or group of businesses.

Skill needs of a locality or a particular industry application of business skills.

Maximum employability of a group of students or an individual.

When packaging a qualification elective units are to be selected from an equivalent level qualification unless otherwise stated.

Qualification Rules

“You’re either part of the solution or part

of the problem.”Eldridge Cleaver


Introduction

“Whether as an individual, or as part of

a group, real progress depends on entering whole-heartedly into

the process and being motivated to make you a

more deeply satisfiedhuman being.”

Source Unknown

This unit of competency is about being able to use the skills and knowledge required to manage finances. This will assist you in gaining the Unit of Competency BSBFIM601A Manage Finances. This is one of the units that make up Advanced Diplomas in Business.

This unit is broken up into four distinct sections. They are:

1. Plan for Financial Management

2. Establish Budgets and Allocate Funds

3. Implement Budgets

4. Report on Finances

At the conclusion of this training you will be asked to complete an Assessment Pack for this unit of competency. The information contained in this resource will assist you to complete this task.

On competent completion of the assessment, you will have demonstrated your ability to plan, implement and report on finances.



Key Points Section 1When planning your finances in a business, it is important that you consider:

How much profit or loss you made and why

Dates and initiatives for major projects and commitments

Cash flow

Compliance and tax

Your current computer systems.

PART 1:

Plan for Financial Management


Part 1: Plan for Financial Management

In this unit, we will be reviewing methods for managing finances within an organisation; specifically we will begin by examining plans for financial management (looking at profit and loss, cash flow trends and taxation). In the second section we will examine methods used for managing the budgetary process in an organisation and finally we will examine processes for managing financial reporting. Let’s begin by examining profit and loss.

Profit and LossOne of the key methods of determining how profitable a business is, is through the use of Cost/Volume/Profit (CVP) analysis. In order for any business to be effective and meet the objectives that you as a Manager are likely to set for it, it is crucial that the organisation has a solid understanding of the way that the business decisions that you make will impact on the financial status of the business as a whole. A business needs to be aware of what products they make the most profit on, they need to know what will happen if the price of your raw materials rise, if your sales fall or how loans are likely to affect the way in which your finances will be affected.

Think about this situation: if you were to reduce the price of your best selling product, would this impact on the profit you make or would the increase in demand mean that you would still make a profit? These are the types of question that an analysis of your profit and loss can help understand.

Linking your costs, the volume of sales and the profit that you make together is an excellent way of finding the answers to many questions that you are likely to have about the way that your business is operating and is very helpful for determining ways in which your business can become more and more efficient. CVP analysis is broken into three key areas: break even analysis, contribution margin analysis and operating leverage. We will look at each of these techniques in detail over the next few pages.

Breakeven Analysis

The process of breakeven analysis attempts to determine the volume of sales that your organisation needs to produce in order to make a profit. If sales volume is less than breakeven point, the company will incur a loss. However if sales volume is higher than the breakeven point, the company will make a profit. This is a very useful technique for analysing major investments - such as a widget factory deciding to expand its operations. Let’s assume that a factory can currently make 51,000 widgets a year, but by expanding they could increase this to 75,000 widgets a year. You could use breakeven analysis to look at the number of widgets that would need to be produced to breakeven after the expansion has gone through. Would the increase in widget sales provide enough funding to fund the expansion of the business?

So, let’s now look at how we would calculate the Break Even Point. The formula itself is in three parts. We first need to calculate the contribution margin per unit sold. This provides us with an indication of just how much each product sold contributes towards the bottom line after the cost of producing the widget (its variable cost) is taken into account.



Contribution Margin per unit produced = Sales Price per Unit — Variable Costs per Unit

From this, we need to calculate the Contribution Margin Ratio - which is used in our breakeven point calculation.

Contribution Margin Ratio = Contribution Margin per Unit divided by Sales Price per Unit

We are now ready to calculate our final Breakeven point.

Breakeven Point (volume of units sold) = Fixed Costs divided by Contribution Margin Ratio.

Let’s now look at an example of this in practice. Let’s assume that Widget Industries (Australia’s Premier Widget manufacturer) produces widgets with a fixed cost of $69,000 a year. The variable cost for producing each widget is $0.88. Our factory is capable, at present, of producing 140,000 units a year. Each widget manufactured is sold for $2.25. So, from this information, let’s work out the breakeven point:

Contribution Margin per unit produced = Sales Price per Unit — Variable Costs per Unit

Contribution Margin per unit produced = 2.25 — 0.88 = $1.37

So, once variable costs have been accounted for, each widget sold contributes $1.37 towards the bottom line.

Contribution Margin Ratio = Contribution Margin per Unit divided by Sales Price per Unit.

Contribution Margin Ratio = 1.37 divided by 2.25 = 0.61


Breakeven Point (volume of widgets sold) = 69,000 divided by 0.61 = 113,114 units.

We now have a breakeven point of 113,114 units. If Widget industries were to sell 113,110 units, they would make a loss for the year, if they were to sell 113,119 units they would make a small profit.

We can take this one step further and look at out factory example. Let’s assume that our factory expansion would allow us to produce an extra 60,000 widgets a year, however in order to fund the expansion we would need a loan that would cost us $49,000 a year to service. Would the expansion be viable? We can use our breakeven analysis to assist us. We know that our fixed costs would rise by $49,000 a year, and we know that out breakeven point should be 113,114 units + the extra 60,000 units. So we can now see if the expansion is viable.


Breakeven Point (volume of widgets sold) = 118,000 divided by 0.61 = 193,442 units.

So, once the loan is in place our breakeven point becomes 193,442 units. We are currently able to produce 140,000 units and after the expansion this would rise to 200,000 units. So, the number of units produced after the expansion is above the number of units needed for breakeven and the company would still make a profit. However, because the difference between maximum number produced and the breakeven point is less, the company profit would decrease even though the number of widgets sold would increase.



“Before you can really start

setting financial goals, you need

to determine where you stand

financially.” David Bach

Contribution Margin Analysis

Now that we have examined breakeven point, let’s move on and examine Contribution Margin Analysis. Contribution Margin is the amount of a sale that remains after the variable costs of attracting that sale are reduced. It is a useful means of looking at pricing and product line choices for a given business. Contribution Margin is generally found using an Income Statement, that has its expenses arranged not by type but rather by their nature (that is are they a fixed or variable cost?). Let’s look at an example from Widget Industries. Since we last met with the company, they have expanded their product range into three innovative widgets - the 1X, the 2B and the 3R.



From this income statement, you can note that the contribution margin is 34%, put another way, for every dollar of sales that Widget Industry makes, 34% (or 34 cents) remained to pay for operating costs and as potential for profit. We can take this process one step further and look at how the various widgets contribute to overall sales. Let’s look at the contribution margin of our company’s three product lines:

So, we have now calculated the contribution margin of the three major product lines at Widget Industries. From this information, we can see that the 3R has the highest contribution margin, and is thus the most profitable, although its volume of sales is half that of the 2B. So, an effective profit strategy would be to emphasise sales of the 3R over the 2B. The very low contribution margin of the 1X means that there is a possibility that the company could delete it from the product line, unless it has a specific reason for being there. You can see that the cost of the parts used to manufacture the 1X is actually higher than the cost of the parts for the 3R. This suggests that the 1X may be in need of a revision, or deletion from the product line.

Sales $642,432

Less Variable Costs:

Cost of Goods Sold $418,179

Delivery $3,569

Total Variable Costs $421,748

Contribution Margin $220,684 (34%)

Less Fixed Costs:

Advertising $7,541

Depreciation $1,452

Insurance $3,409

Rent $14,598

Electricity $11,937

Wages $52,304

Total Fixed Costs $91,241

Net Operating Income $129,443

Widget 1X Widget 2B Widget 3R

Sales $110,985 $368,921 $165,526

Less Variable Costs:

Cost of Goods Sold $99,898 $225,928 $95,922

Delivery Charges $689 $1,982 $898

Total Variable Costs $100,587 $227,910 $96,820

Contribution Margin $10,398 $141,011 $68,706

(9.3%) (38%) (42%)



Leverage

We now can move on and look at the concept of operating leverage. This follows on from a breakeven analysis. Leverage examines the role of your fixed costs. In particular it attempts to determine the effect fixed costs are having on your profit and loss statement and whether any changes can be made. Let’s look at the relationship between fixed costs and profits.

The contribution margin, as calculated above, provided us with a significant contributor to the bottom line of any business, but you will remember that the breakeven point is calculated by dividing fixed costs by contribution ratio. This means that the higher the fixed costs are in a business, generally speaking, the higher the increase in profits will be as volume rises; while this may seem all well and good, the converse is also important to remember. If fixed costs form a large part of your business’s operating costs, then as volume falls, the losses will mount up quicker. By using more fixed assets in production you increase the potential profit the business can make (or conversely risk losing more money if volumes fall).

Cash Flow AnalysisWe now move on from analysing profits to looking at cash flows. In essence, business is about generating cash flows. Cash is an asset to any business and is required for the business to be able to operate. Different businesses operate with differing levels of cash flow, and in this section, we will examine the idea of cash flows and how they affect business operations.

For the most part, a business wants to have a positive cash flow. That is, they want the money coming into a business to exceed the money going out of the business. Cash inflows are generally generated from sales. However, they can also come about due to investment in the business or taking out a loan. Cash outflows on the other hand may be generated through paying staff, buying assets, buying materials, paying off a loan or any other expense being paid.

Is Cash Flow the Same as Income?

This is an important distinction to make, and one that is sometimes difficult to grasp. For example your business may have a positive cash flow but be making a loss. Just think carefully about what a cash flow statement and an income statement actually show and think of this example. A business decides to buy a new building. This impacts the cash flow statement but not the income statement. Why is that?

When you think carefully about it, buying a building is a net outflow of cash from the business if paid in cash. However, the transaction simply is not recorded on the income statement at all - buying a fixed asset such as a building is recorded by:

Reducing the amount of cash in the bank.

Increasing the fixed asset amount – Building.

So, the entire transaction is recorded on the balance sheet, not on the income statement.



This ultimately shows the difference between cash flow and income. Income is any cash inflow directly affected by the sale of goods; however cash flow is affected by both operational and strategic decisions made by the business.

The Cash Flow Statement

You are probably most familiar (from any time you have spent studying accounting) with the Income Statement and the Balance Sheet. These are generally taught in introductory accounting courses, however something that is usually less familiar, and which is generally not taught until you study Financial Accounting or Business Finance, is the Cash Flow Statement.

Unlike the balance sheet and income statement, the cash flow statement attempts to bring together all cash transactions from both the income statement and the balance sheet. So in essence any change to the cash at hand figure will be reflected in the cash flow statement. This can be contrasted to items such as:

A loan being taken out, which increases cash, increases liabilities and has no affect on the income statement of the business.

The cash flow statement records any change in the cash on hand or cash at the bank for the business. It records any cash inflow and cash outflow that the business may have. Another example of differences between the various statements comes from the fact that expenses incurred may not be shown in the cash flow statement if the expenses do not need to be paid until after the date of the statement. In these cases they may show in your income statement since they were incurred but not in your cash flow statement since they have not yet been paid for.

Let’s now look at the common sections of a cash flow statement:

Cash Flow from Investing: This section of a cash flow statement includes any inflows and outflows associated with the purchase and sale of any assets that the company may use to produce income. For example, expansion of a business, selling machinery or other assets would be included in the investment section.

Cash Flow from Operations: This section outlines any cash taken in or used during the normal operations of a business. In this case, operations should outline a business’s ability to generate a positive cash flow from the normal course of their business. In most cases, this must be positive for a business to be viable.

Cash Flows from Finance: The final section of the typical cash flow statement outlines the cash flows associated with financial operations of the business. Mortgages, loans, paying stockholders and other financial transactions such as this will feature in this section. Generally speaking, you will find that this section is negative for many companies, since they will be paying back financial obligations without always having any inflow.

If a company does not have a cash flow statement, it can be calculated using the formula:

Cash inflow = Net Income + depreciation and any other non-cash income and expenses.

Although, for the most part, cash flow statements are produced as a part of the standard set



of financial statements that a business produces on a regular basis, interpreting a cash flow statement can be quite difficult, unless you have something to measure your results against. However, cash flows can be compared to other cash flow statements from competing industries. Generally speaking, the cash position of a business is a good indicator of its performance - particularly when times are bad. A company with a good positive cash inflow will perform better than one without this.

A company’s profitability often is not a good indicator of its performance, which is why the income statement and cash flow statement need to be read together. A company that is making a profit may still perform poorly if they do not have a high enough net cash inflow, as this can mean that the company is not in a position to actually stay liquid (pay its bills). This means that interpreting all statements together becomes more and more important.

Unfortunately, while we can gain a lot of information from a cash flow statement, there are various items that we do not gain good information about from a cash flow statement. As we mentioned above, a cash flow statement does not give us any idea on the profitability of the business. All the statement tells us is where cash is coming from and going to. Nothing more, nothing less. It is almost like looking at a business’s bank statement - showing cash in and cash out. However, it does provide the big picture when you analyse its information against information in the balance sheet and income statement.



Taxation RequirementsWe now move on to how taxation affects business and in particular financial management. What obligations does a business have with regards to taxation in Australia? We will begin by looking at exactly what a business is obliged to do.

Pay As You Go

Pay As You Go (or PAYG) is the method used in Australia for the payment of business taxation. Business tax is the system used to calculate and pay withholding amounts for your taxation obligations. In most cases, businesses will pay instalments based on their income - with the instalment rates calculated by the ATO. As you can imagine, because these will be cash payments, they will affect your cash flow statements as being net cash outflows from your business operations.

Goods and Service Tax

GST is a tax charged on all goods and services sold in Australia. Generally, only businesses with an income over $75,000 need to register to pay GST. Again, this will be a net cash outflow from your business.

Fringe Benefits Tax

FBT is paid by any business that provides any non-monetary employment benefits. FBT should be lodged as required by the FBT.

Business Activity Statement (BAS)

A Business Activity Statement is a statement that is submitted to the ATO indicating all business activity of the business, which is generally used to calculate taxation obligations. BAS can now be submitted online to simplify the overall process.

Superannuation Guarantee Scheme

Businesses must pay superannuation support for all of their employees. This is at a level required by the ATO.

Payroll

Employers are also required to submit and pay payroll tax for each of their employees at the prescribed rates.

The ATO requires that all businesses keep all of their financial statements for a minimum of 6 years. This includes all information used to compile these reports and they should be easily available for checking as required. It is important that all businesses are able to get access to this information.



Activity OneDescribe the various financial statements that you get to see on a regular basis. What information do these provide?

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .



Section 1 - ‘True’ or ‘False’ Quiz

Please tick True False

Contribution margin calculates the amount of a sale that is above the cost of producing the goods.

Breakeven analysis is used to calculate profit levels.

Breakeven analysis is a one step calculation.

GST is payable by all businesses.

Taxation requirements vary from business to business.

If breakeven point is 54,568 units, you must sell 54,569 units to make a profit.

Leverage is related to liquid asset use.

CVP analysis is used to determine the reasons a business may be profitable.

Cash flow differs from income.

Cash flow only occurs from sales.

Date post:	06-Aug-2018
Category:	Documents
Upload:	lamdien
View:	214 times
Download:	0 times

CAQNDIDATE RESOURCE WITH SIMULATED ONLINE … · 19 BSBFIM601A/02 Establish Budgets and Allocate...

Documents