BAO6000 Alpha Global Limited Case Study

Assignment Task

Your role
Alpha Global Limited is a large multi-national conglomerate domiciled in England and having a global footprint. Alpha Global operates in a diverse range of business activities. One of their divisions is Richbrew Australia Limited (Richbrew), a company registered and operating in Australia. The company imports green coffee beans into Australia from various destinations where coffee is grown. Richbrew is a subsidiary of Coffee Traders Global, which operates from Singapore. Coffee Traders Global is in turn owned by Alpha Global.The poor profit performance of Richbrew Australia Limited is of concern to the Directors of Alpha Global. The management team of Richbrew is considered to be both competent and dedicated to improving the performance of their business. An excerpt from the minutes from the last management meeting is provided in the case data below.On receiving this excerpt, the Directors of Alpha Global realised that they needed an external expert advice to improve business processes at Richbrew. They engaged your consultancy for this task and provided you with the following brief.Diagnose the deficiencies in the current information system as described (List up to 10 deficiencies drawing on Week 1 resources and/or your practical experience).Advocate improvements to the MIS to overcome these deficiencies. (300 words)Assess the current adequacy and proposed structure of the finance function to implement your advocated improvements. 
Case dataDetails of the business
The vision of Richbrew Australia Limited (Richbrew) is to offer a reliable supply of a wide range of competitively priced coffee beans to coffee roasters in Australia. The initial long-term plans of Richbrew envisaged a return on investment of 25% per year on the initial investment of $20 million (i.e. a $5million profit per year).Anne Smith is the General Manager of Richbrew. She is supported by 4 Account Managers, who look after the customers in NSW, VIC and SA, QLD and WA. She is also supported by a National Purchasing Manager who does the sourcing of products, a National Logistics Manager responsible for warehousing and product delivery to customers and an Administration Manager responsible for the Accounts Receivable and Accounts Payable, HR and Administrative areas. These persons comprise the senior management team of the business. A further 20 persons are employed in the business supporting this management team achieve the objectives of the business. The overall Finance and Accounting function is performed by the Head Office in Singapore. The Technology Function including maintaining the ERP database is also performed by the Head Office in Singapore.The Finance team in Singapore provides a financial report to the General Manager of Richbrew at the end of each month. The Senior Management team have access to the company IT system and can generate reports on inventory position and on customer sales and profits and unpaid customer account balances.
Current circumstances
The financial report for the 6 months to end December 2019 has been made available to the General Manager. Details are given below. Profit Statement for the 6 months July 2019 to December 2019 (all amounts in $ 000’s)
Budget Actual Variance

• Sales 15,000 10,000 (5,000)
• Cost of Goods Sold (9,750) (8,000) 1,750
• Gross Margin 5,250 2,000 (3,250)
• Warehousing (200) (250) (50)
• Delivery (400) (300) 100
• Salaries and wages (1,500) (1,200) 300
• Other Selling Expenses (500) (200) 300
• Other Admin Expenses (600) (500) 100
• Head Office Management Fee (200) (200) 0
• Bank Interest (250) (350) (100)
• Net Profit 1,600 (1,000) (2,600)
• Based on these results, the Head Office has expressed disappointment with the performance of Richbrew in Australia. The CEO of the parent company in Singapore has instructed the General Manager to take the required action to rapidly bring the business back to profitability and achievement of budget. She has called a meeting of her senior management team to discuss why the actual performance is poor and what steps can be taken to restore profitability to the business.

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