Describe the Potential Effects of Discrimination

Applied Business Unit 8: Business Planning Task 6 Worksheet Task Six: Financial Planning YOU CANNOT START AND/OR COMPLETE THIS WITHOUT A FINAL SALES FORECAST AND A LIST OF ALL YOUR OPERATIONAL COSTS ————————————————- Lesson breakdown ————————————————- Lesson 1: †¢Introduction to Financial Planning and how do we create an integrated plan: Focus on cash flow forecast using operations plan ————————————————-Lesson 2+3: Cash flow analysis and develop aims and objectives; ————————————————- Introduce ‘ILP-time-off’ work to do  Ã¢â‚¬â€Ã¢â‚¬â€Ã¢â‚¬â€Ã¢â‚¬â€Ã¢â‚¬â€Ã¢â‚¬â€Ã¢â‚¬â€Ã¢â‚¬â€Ã¢â‚¬â€Ã¢â‚¬â€Ã¢â‚¬â€Ã¢â‚¬â€Ã¢â‚¬â€Ã¢â‚¬â€Ã¢â‚¬â€- Lesson 4: Cash flow revisions, Problem spotting based on cash flow and develop aims and objectives ————————————————- Lesson 5: Profit and loss account and Financial Ratio Analysis and developing aims and objectives ————————————————- Lesson 6: Break Even analysis and then develop aims and objectives ————————————————-Lesson 7: Final Amendments to Financial Planning; Problem spotting based on P&L, ratio analysis, break-even and develop plan Task 6 Brief Overview * In this section, you are going to produce financial documents for yo ur business proposal. You will need to use the sales forecasts and operations plan that you produced earlier. This section is important as you are attracting investment and assessing the viability of your plan * Calculate, analyse and evaluate the following; Use these subheadings in your report * Size and duration of budget * Start-up costs Running costs * Cash flow forecast * Break even analysis * Financial ratios * Profit and loss * Analyse all your financial documents showing detailed consideration for the Aims and Objectives: * Are they achieved? * If not what are the possible problems this can cause your business? * Can you think of any solutions to help you to overcome these problems so that you could achieve your aims? SUBMISSION OF TASK 6 The following is to be submitted as a Word document Use the following headings for your submission of your Financial Plan 1st submission.Copy and paste these into your final document: Submit all work on moodle for deadline 3rd December 2010 (4:15PM) 1. Financial Planning (main heading) 2. Cash Flow Forecasting Table (MB4 students need to submit 2 (+? )CFF Tables) a. Cash Flow Forecasting analysis (of each CFF produced) 3. Profit and Loss statement and Financial Ratios Table (MB4 students need to submit 2 (+? )P&L and F/R Tables) b. Profit and Loss statement and Financial Ratios analysis (of each P&L and F/R produced) 4. Breakeven Table (MB4 students need to submit 2 (+? )Breakeven Tables) . Breakeven analysis (of each Breakeven produced) TASK 6 FINANCIAL PLANNING CONTENT/ASSESSMENT CHECKLIST CRITERIA CASH FLOW FORECASTING| 1. Start-up budget: | a) 12 monthly graph (Cut and paste information from your cash flow forecast for your first graph)| b) Analysis needs to consider:| I. You must have an in-depth explanation of how these could achieve the aims and objectives of your business proposal. | II. Research used to underpin and develop aims and objectives/ownership/key personnel| III. Research used to underpin an d develop business idea| IV.Identify problems and solutions with your plan (develop it) and also your aims and objectives:| V. What changes to your original idea/USP/aims do you have to consider in light of this new data? | 2. Running costs: | a) 12 monthly graph (Cut and paste information from your cash flow forecast for your first graph)| b) Analysis needs to consider:| I. You must have an in-depth explanation of how these could achieve the aims and objectives of your business proposal. | II. Research used to underpin and develop aims and objectives/ownership/key personnel| III.Research used to underpin and develop business idea| IV. Identify problems and solutions with your plan (develop it) and also your aims and objectives:| V. What changes to your original idea/USP/aims do you have to consider in light of this new data? | 3. 12 monthly Cash Forecast: 1 : Your initial forecast used to help identify problems| a) Analysis needs to consider:| I. You must have an in-depth explanati on of how these could achieve the aims and objectives of your business proposal. | II. Research used to underpin and develop aims and objectives/ownership/key personnel| III.Research used to underpin and develop business idea| IV. Identify problems and solutions with your plan (develop it) and also your aims and objectives:| V. What changes to your original idea/USP/aims do you have to consider in light of this new data? | 4. MB4 12 Monthly Cash Forecast: 2: A working example of your solutions to your identified problems in CFF1| a) Analysis needs to consider:| I. You must have an in-depth explanation of how these could achieve the aims and objectives of your business proposal. | II.Research used to underpin and develop aims and objectives/ownership/key personnel| III. Research used to underpin and develop business idea| IV. Identify problems and solutions with your plan (develop it) and also your aims and objectives:| V. What changes to your original idea/USP/aims do you have to co nsider in light of this new data? | PROFIT AND LOSS ACCOUNT| 5. Profit and Loss Account 1 : Your initial forecast used to help identify problems| a) Analysis needs to consider:| I. You must have an in-depth explanation of how these could achieve the ims and objectives of your business proposal. | II. Research used to underpin and develop aims and objectives/ownership/key personnel| III. Research used to underpin and develop business idea| IV. Identify problems and solutions with your plan (develop it) and also your aims and objectives:| V. What changes to your original idea/USP/aims do you have to consider in light of this new data? | 6. MB4 Profit and Loss Account 2: A worked example of your solutions to your identified problems in P&L1| b) Analysis needs to consider:| VI.You must have an in-depth explanation of how these could achieve the aims and objectives of your business proposal. | VII. Research used to underpin and develop aims and objectives/ownership/key personnel| VII I. Research used to underpin and develop business idea| IX. Identify problems and solutions with your plan (develop it) and also your aims and objectives:| X. What changes to your original idea/USP/aims do you have to consider in light of this new data? | FINANCIAL RATIOS| 7. Financial Ratios: Gross and Net Profit for P&L account 1| a) Analysis needs to consider:|I. You must have an in-depth explanation of how these could achieve the aims and objectives of your business proposal. | II. Research used to underpin and develop aims and objectives/ownership/key personnel| III. Research used to underpin and develop business idea| IV. Identify problems and solutions with your plan (develop it) and also your aims and objectives:| V. What changes to your original idea/USP/aims do you have to consider in light of this new data? | 8. MB4 Financial Ratios: Gross and Net Profit for P&L account 2| a) Analysis needs to consider:| I.You must have an in-depth explanation of how these could a chieve the aims and objectives of your business proposal. | II. Research used to underpin and develop aims and objectives/ownership/key personnel| III. Research used to underpin and develop business idea| IV. Identify problems and solutions with your plan (develop it) and also your aims and objectives:| V. What changes to your original idea/USP/aims do you have to consider in light of this new data? | BREAKEVEN| 9. Breakeven table and calculation:1 : Your initial forecast used to help identify problems| a) Analysis needs to consider:| I.You must have an in-depth explanation of how these could achieve the aims and objectives of your business proposal. | II. Research used to underpin and develop aims and objectives/ownership/key personnel| III. Research used to underpin and develop business idea| IV. Identify problems and solutions with your plan (develop it) and also your aims and objectives:| V. What changes to your original idea/USP/aims do you have to consider in light of this new data? | 10. MB4 Breakeven table and calculation:2: A working example of your solutions to your identified problems| b) Analysis needs to consider:|VI. You must have an in-depth explanation of how these could achieve the aims and objectives of your business proposal. | VII. Research used to underpin and develop aims and objectives/ownership/key personnel| VIII. Research used to underpin and develop business idea| IX. Identify problems and solutions with your plan (develop it) and also your aims and objectives:| X. What changes to your original idea/USP/aims do you have to consider in light of this new data? | TASK 6 ASSESSMENT GUIDE: HOW TO ACHIEVE THE BEST RESULTS? * You are assessed in Task 6 for BOTH AO2 and AO3 marks AO2 is marked out of 22 marks and all learners should be aiming for a minimum of MB4 which is 17/22 marks * AO3 is marked out of 14 and at this stage all learners should be aiming for a minimum of MB4 which is 11-14 marks. * We will award high marks for those learne rs who can: * Purposefully select data from a wide range of sources, * Analyse the problem and possible solutions * Develop their plan based upon research. * Give an in-depth explanation of how the marketing plan could achieve the aims and objectives of the business proposal. AO2 ASSESSMENT OBJECTIVES MB1| MB2| MB3| MB4| 2 3 4 5| 6 7 8 9 10| 11 12 13 14 15 16| 17 18 19 20 21 22| A business plan which includes aspects of the marketing plan. A description of how this supports the aims and objectives of the business proposal. | A business plan which contains the marketingPlan. A basic explanation of how this contributes to achieving the aims and objectives of the business proposal. | A business plan which contains a developed marketing plan. An explanation of how this could achieve the aims and objectives of the business proposal. | A business plan which contains comprehensive marketing plan.An in-depth explanation of how this could achieve the aims and objectives of the business propo sal. | * Aspects of the components are produced * Superficial coverage of aims and objective| * The components are complete * Aims and objectives are broadly considered| * The components are complete and developed * Beginning to target particular aims and objectives, but lacks precision| * The components are complete, developed and address the key parts of the problem * Targeting particular aims and objectives with precision| AO3 ASSESSMENT OBJECTIVES MB1| MB2| MB3| MB4| 2 3| 4 5 6| 7 8 9 10| 11 12 13 14| Collects some up-to-date data from a limited range of sources. Uses numerical and/or non-numerical techniqueson the collected data to provide a partial analysisof the requirements of:†¢ the marketing plan†¢ the operations plan†¢ the financial plan. Uses the results of the analysis to identify some relevant elements of the business plan. | Selects some up-to-date data from a limited range of sources. Uses numerical and/or non-numerical techniques on selected data to p rovide a partial analysis of therequirements of:†¢ the marketing plan†¢ the operations plan†¢ the financial plan.Uses the results of the analysis to outline a relevant business plan. | Selects relevant and up-to-date data from a range of sources. Uses appropriate numerical and/or non-numericaltechniques on selected data to provide a partial analysisof the requirements of:†¢ the marketing plan†¢ the operations plan†¢ the financial plan. Uses the results of the analysis to develop a relevant business plan, which considers the aims and objectives, form of ownership and key personnel required. Selects relevant and up-to-date data from a wide range of sources. Uses appropriate numerical and/or non-numericaltechniques on selected data to analyse the requirementsof:†¢ the marketing plan†¢ the operations plan†¢ the financial plan. Uses the results of the analysis to develop a consistentand integrated business plan, showing detailedconsideration o f the aims and objectives, form of ownership and key personnel required. | MB1| MB2| MB3| MB4| 1 2 3| 4 5 6| 7 8 9 10| 11 12 13 14|Collects data from a limited range of sourcesProcesses dataIdentifies some elements of the plans components| Selects data from a limited range of sourcesProcesses selected dataOutlines components of the plan| Purposefully selects dataAnalyses key parts of the problem or practical solutionsDevelops components of the plan| Purposeful selects data from a wide range of sourcesAnalyses key parts of the problem AND practical solutionsDevelops integrated components of the plan| Follow the below detailed overview of each task for advice and help on how to achieve MB4 for Task 6Task 6 MB4 Detailed Overview CASH FLOW FORECAST, ANALYSIS AND DEVELOPMENT Lesson 1: Task 1 1. Download cash flow forecast from moodle 2. Complete pre start up budget (SEE CASE STUDY!! ) 3. Complete pre start-up costs calculated from T5 4. Insert monthly sales figures from final sales forec ast 5. Insert monthly fixed costs calculated from T5 6. Insert monthly variable costs from T5 Lesson 2+3: Task 2 Analysis * All marks gained with this task is from your analysis of your financial data; not from your reports themselves. ————————————————-Identify problems and solutions with your plan (develop it) and also how your aims and objectives can/can’t be achieved Learners can achieve MB4 in A02/A03 by following the Financial Planning Assessment Objectives which requires them to identify problem areas and developing practical solutions to consider alternative perspectives. What you will need to include will depend on your individual business proposal. You need to identify areas of weakness such as high fixed costs, start up costs? * Perhaps you need a cash injection by selling equity to help you pay for start up costs? It could be you source alternative suppli ers for your variable costs or project that you will pay 30 days later which is to improve your working capital. * What is happening to the figures in the net cash flow cells, are you losing money each week? * This is a cash flow negative situation. * Or are you cash flow positive? * How long before you are cash flow positive? * Why is this so long? Lesson 3+4: Task 3 MB4- Revised cash flow forecast * MB4- You need to produce a refined Cash Flow forecast based upon the analysis of the key issues identified in T6 task 2. This is to include the developments you have made. Label this Cash Flow Forecast 2. * You need to analyse CFF2: * Identify problems and solutions with your plan (develop it) and also if your aims and objectives can be met- How/Why? PROFIT AND LOSS and FINANCIAL RATIOS Lesson 4: Task 1 1. Download Profit and loss template from moodle 2. Insert sales for year 1 from your final sales forecast 3. What is the total cost of these sales? How much were the total variable cos ts related to the output. These are costs such as ingredients, packaging or price of the club. Put this figure in Direct costs/cost of materials sold 4.Calculate A-B to = C which is the identification of Gross Profit 5. Insert all other costs for the year in the respective headings, adding headings where needed. 6. Add up all your total overheads and insert this figure in D 7. Calculate C-D to identify Net Profit or Loss Figure 8. Calculate your Gross Profit MB4- Task 1 b Revised PROFIT AND LOSS and FINANCIAL RATIOS You must now repeat this action again for the second cash flow forecast figures * You need to analyse P&L2 AND F/R2: * Identify problems and solutions with your plan (develop it) and also if your aims and objectives can be met- How/Why?Task 2= Financial Ratios Overview Profitability ratios are a key source of information for both investors and business planners. They provide a clear image of the business both in terms of your costs and profit. A strong ratio can be t he difference between investment and failure. Task A 1. Use the figures in your first profit and loss account to calculate Gross Profit Ratio. ————————————————- Gross Profit margin: ————————————————- A measurement of how much profit the business has made on its buying and selling activities. ———————————————— How good a business is at trading. ————————————————- Gross Profit margin= Gross Profit/turnover (Sales Revenue) X 100 (%) ——————————————†”—- The higher the % the better, e. g. ————————————————- A GPM of 45% means that for every ? 1 of sales, the firm makes 45p in gross profit 2. Use the figures in your first profit and loss account to calculate Net Profit Ratio. ————————————————- Net Profit margin: ———————————————— It is a measure of how much overall profit the business has made after taking into account all relevant costs that have been incurred. ————————————————- Net profit margin= net profit/turnover (sales revenue) X 100 —————â₠¬â€Ã¢â‚¬â€Ã¢â‚¬â€Ã¢â‚¬â€Ã¢â‚¬â€Ã¢â‚¬â€Ã¢â‚¬â€Ã¢â‚¬â€Ã¢â‚¬â€Ã¢â‚¬â€Ã¢â‚¬â€- The higher the % the better, e. g. ————————————————- A NPM of 45% means that for every ? 1 of sales, the firm makes 45p in pure profit Task B MB4 Complete for 2nd profit and loss account if constructed CFF2 Task 3= Analysis You must now undertake a critical analysis of each profit and loss account with clear reference and commentary related to the key issues such as profit or loss, gross profit, overhead costs, GPM, NPM etc * Clearly relate back to the businesses achievement of its aims and objectives (explain HOW AND WHY THEY ARE ACHIEVED), developing or revising your aims where necessary in your business plan. * Make clear reference to the FIGURES from your profit or loss, gross profit, overhead costs etc * You must undertake a critical analysis of each financial ratio * Identify and pr oblems and/or solutions: Are you profitable? If so†¦ by how much? * Can you grow? * Which costs are too high? * How can you improve your profitability? * What are the possible knock-on effects of these solutions for your business> * Which costs could be reduced? If so what would the possible impact of this be on your business idea? * Which costs cannot be reduced further? Why? What problems does this bring up? * How does a cash injection help or hinder the financial ratios/P&L? BREAK EVEN Task 1 1. Download the Breakeven table from Moodle 2.Input into the table your Annual Revenue (TR), annual FC and VC (with total FC and VC), and total costs. 3. You must then divide the total variable costs by the number of units you are selling in a year ( units can be the bottles/ no of clubbers you expect/ etc in a year) 4. This will give you the variable cost /unit 5. You must now calculate the break even OUTPUT point using the formula: 6. MB4 Calculate Break Even 2 from your revise d financial documents 7. All marks gained with this task is from your analysis of your financial data; not from your reports themselves. Identify problems and solutions with your plan (develop it) and also if your aims and objectives can/cant be achieved * Do you break even? * If so at what output? * Work out from your sales forecast when you will reach this breakeven output level * What aims can be achieved? How? Why? * If you don’t breakeven; why not? * You need to identify areas of weakness such as high fixed costs, start up costs, raw materials, low selling price? * What aims cant be achieved? How? Why? * What could you do to solve this breakeven problem? (hint: see changing B/E variables section) 8.MB4 analyse the effect of changing variables (FC, VC and/or Price) on the break even figure. * Calculate the effect of changing variables (FC, VC and/or Price) on the break even figure: * Analyse these break even scenarios and link to your aims and objectives. * What is the ef fect on breakeven level? * What are the potential problems you have identified with your break even? * Are there any solutions you can recommend to the business? * Such as reducing selling price? * Increasing selling price? * Increase advertising to increase sales? Reducing fixed or variable costs further? etc