MBS539 - Accounting for Managers - Case Study - Accounting Assignment Help

Assignment Task

Scenario:
After a few weeks of studying the role of accounting information in a business, you convince yourself that it is now the time to start on embarking a new small business. For this task, it is recommended to choose a simple trading or service business with a single product cost such as the Campus Fruit Juice Truck or other small businesses such as a coffee, doughnut or hot dog stand, soccer ball shop or a headphones shop, car wash, music studio/tuition, mini-golf hire, among others. If you choose a more complex business, the task and the assessment weight become disproportionate, and it is not the intention of this exercise.

Your assignment: Prepare a business plan and the first quarter Cash Budget for this business, create transactions, prepare a column worksheet for each month for the first two months of the business operation, develop financial statements and finally analyse your business performance. The following are the detailed requirements.

1. The Business Plan and Cash Budget. Prepare your business plan report as outlined in the Business Plan section below. Based on the Business Plan, develop a cash budget for the first quarter of your operation. Remember that your cash budget should reflect (match with) your business plan.

2. Create and list hypothetical sets of transactions for the first two months of your business operation (10 -15 transactions (including adjustments) each month).

3. Prepare a column worksheet (for recording your transactions as per Ch 4) for the end of each month.

4. Prepare a classified Income Statement (Statement of Profit or Loss) & classified Balance Sheet (Statement of Financial Position) each, for the 1st & 2nd month

5. After the first two months of operations, you want to know how your business has progressed. Use your 1 st & 2nd -month financial statements to calculate ratios for both months to analyse your liquidity, profitability, operating capability, and financial flexibility (see template attached as a guide or create your own). Provide your analysis based on the ratios. Use applicable ratios according to your type of business.
6. Prepare a paragraph summary of your business viability - liquidity, profitability, operating capability, and financial flexibility, express your opinion/outlook/expectation about the business.
The Business Plan Prepare your plan according to the following list:
Description of the business: –
Form of organisation of the entity; state the form of the small business you choose;
- Location; state the location of your business and the reason for you to choose that location. - Goals; list at least three current and future expansion goals for your business. - Personnel involved (their role) in the start-up and management of the entity - briefly.

2. Marketing plan:
This section explains how your business will make sales (the demand of your product – prospect, potential competitors - based on the market research you have conducted) and how it will influence (promote, price, and distribute the product) and respond to the market condition.

3. Operating plan: This section shows strategies to develop and support your product; this includes the business relationship with potential contract suppliers and customers and your plan for your business expansion in the future.

4. Environmental management plan: (2 marks) For this assignment, you are required to only briefly describe some environmental and social concerns that your business can maintain, such as on the equipment, supplies, or materials you use in the business.

5. Financing plan – Sources of capital/equity: State the amount and the source of your business capital requirements - initial cash/investment by owners, purchase of start-up equipment, possible loans – long/short terms, etc. When do you think you would have enough cash inflow to pay an instalment of a loan (if any)?

6. Financial plan - Projected financial performance: This section covers some estimations/assumptions of your business performance, including the projected sales and the relevant purchases, as well as predicted operational expenses, cash collections and payments (cash inflows and outflows). Information in this section is the summary of key assumptions of your business Projected Financial Performance you have drafted in your discussion worksheet. These data should be then being reflected into your cash budget, involving: o the payment term set up by the suppliers.

o Estimated sales amount and the terms of payment you set up for them and other projected customers.

o Day to day expenses such as the monthly wages/salaries, utilities, depreciation of assets and other general & admin expenses, etc.

7. Prepare a Cash Budget for the first quarter of your business operation.

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