Fin 317 Wk 7 Assignment 3 More of the Basics and Beyond

In outlining a budget there are two phases that must be determined to create a budget, an operating phase and a financial phase. “Developing a new operating budget starts with examining budgets from previous years and identifying what components are going to change, by how much and if any new components need to be added or existing ones reduced or cut” (Budget Challenges, 2012). In the first phase of the budget it needs to be determined how much money is going to be needed to operate the day to day activities of the business.

Assignment - AFF2491 Company Reporting Semester 1 2013 This assessment task is designed to test a student’s achievement of objectives 1, 2, 3 and 4 (refer to AFF2491 Unit Guide). It is an individual assessment task. This assignment must be handed in for successful completion of this unit. It will contribute 15% towards the final mark in this unit. The assignment consists of: Part B (7 Marks) Accounting for income tax Part C (8 Marks) Consolidation This assignment is due on Friday 10 May 2013 by 5:00pm (Week 9). Students are required to submit a hard copy in the assignment box located at Level 3, Building H, Caulfield Campus.

Activity mode aims to provide quality study notes and tutorials to the students of HRM 595 Week 5 Case Study 1 Capital Mortgage in order to ace their studies.

There are different types of budgeting that businesses typically use and those include Operating budgets, Capital Budgets and there are many subtypes that exist because a budget can also be created for special events, the recruitment and retention of new staff, and to manage the advertising expenses and return on investments for a business (Demand Media, 1999-2012). According to Demand Media (1999-2012), "An operating budget outlines the total operating expenses and income for the organization, typically for the period of a fiscal year. Capital budgets evaluate the investments and assets of the business, and a cash budget shows the predicted cash flow in and out of the business over a period of time” (para.2 ). According to the Cost-Benefit Analysis (2012), “Capital budgeting has at its core the tool of cost-benefit analysis; it merely extends the basic form into a multi-period analysis, with consideration of the time value of money. In this context, a new product, venture, or investment is evaluated on a start-to-finish basis, with care taken to capture all the impacts on the company, both cost and benefits. When these inputs and outputs are quantified by year, they can then be discounted to present value to determine the net present value of the opportunity at the time of the decision” ("Cost-Benefit Analysis," 2012).

2. Once you have estimated the start-up needs for this business, determine the best financing

5. How would you identify timescales, priorities and financial resources when preparing a budget? [2.3]

Complete an income statement, balance sheet and statement of cash flows for 2011. Please provide information on any assumptions you make not already stated in the case.

YOU CANNOT START AND/OR COMPLETE THIS WITHOUT A FINAL SALES FORECAST AND A LIST OF ALL YOUR OPERATIONAL COSTS

Pro-Forma Financial Statements (I/S, B/S and Statement of Cash Flows) with deltas out three years and analysis

Capital planning and budgeting is a very vital piece in the Public Budgeting System process. It is an essential implement in the financial management practice and is effective in both public and private organizations. It is the method which consists of the determination and the evaluation of the investments and the possible expenses by an organization. As explicate by Lee, Johnson, & Joyce (2008), capital budgets help in determining how much of each form of investment is needed, and it supports an organization in assessing the available revenue which includes loans is required to finance those investments (p. 475). Capital budgeting is a central part of the universal

........................................................................7 7.0 Financial Plan .........................................................................................................................................7 7.1 Start-up Funding ...........................................................................................................................7 7.2 Important Assumptions ..................................................................................................................8 7.3 Break-even Analysis ......................................................................................................................8 7.4 Projected Profit and Loss ..............................................................................................................9 7.5 Projected Cash Flow....................................................................................................................12 7.6 Projected Balance Sheet .............................................................................................................14 7.7 Business Ratios ...........................................................................................................................15

We have constructed pro forma financial statements based on the sales-driven estimates and interest and tax fixed burdens. The key determining factors to the accuracy of these projections are the assumptions made about revenue growth and the sales-driven accounts like cost of goods sold, current assets (viz., inventory). Also, assumptions about the company’s capital budgeting

1. For the year-end December 31, 2007, financial statements, what amount should M record as a liability?

The following is an example of how this assignment might look when finished. The word limits are indicated at the end of each section. This is neither an essay or a report; it is simply an assignment with 3 sections. It does not need to have an introduction or a conclusion. Clarity is achieved by clear section headings, and clear paragraphing.

3. When a new business is started, or a patent idea needs funding, venture capitalists or investment bankers will want to see a business plan that includes forecast information related to a profit and loss statement. What type of forecasting information do you suppose would be required?