pay for GBE806 financing enterprise assignment 2 solution NMIT

Question - Nelson Marlborough Institute of Technology

POST GRADUATE DIPLOMA IN BUSINESS ENTERPRISES

Activity Title: GBE.806 – Financing Enterprise
Standard
Number and
Title:

GBE806
Assessed
Elements:

Conditions:








ASSIGNMENT 2

2

Task/Activity Instructions:
Business Idea
Provide a brief overview of your business and the services/products you will provide.


Establishing your business
Prepare an itemised list of assets needed to establish your business.
Discuss how you will finance the purchase of these assets ie
debt/equity.


Managing your Assets
Discuss methods/procedures you will use to evaluate business asset purchases. ie
cost/benefit analysis

Discuss methods/procedures you will use t ...Read More o manage your working capital ie cash, inventory,
accounts receivable, accounts payable.


Income Statement (Profit & Loss)
Estimate your sales and expenses (exclusive of GST) for each month, for the first year of
your business (including a total column) and the resultant profit(loss).


Note: You will need to explain your sales and expense estimates.
 Sales
o Your sales estimate should include an explanation on the selling price. This
explanation should refer to the costing of your service/product and comparison to
competitor pricing.
o You also need to give details on the volume of your sales eg number of customers.
o You should also explain when you expect to receive your sales in cash (for use in
your cash flows budget)

 Expenses –
o A brief explanation for each of your expenses will suffice.
o Don’t forget to include depreciation and insurance costs.
o You should also explain when you expect to pay these in cash. (for use in your cash
flows)


Cash Flows
Estimate your cash receipts and payments (including GST) for each month for the first year of your
business (including a total column).

Note: Assume that you are on the 6 monthly GST payments basis
 Use your sales and expense estimates to calculate when you will receive/pay cash.
 Don’t forget to include establishment costs (assets), loan finance and drawings.


Cost Volume Profit Analysis
Using your forecast income and expenses classify the expenses into fixed and variable costs.
Calculate the breakeven point for your business. Provide a contribution margin statement to prove
your calculations are correct. Show workings.

Using the variable cost percentage and fixed costs calculated for breakeven point above, prepare a
forecasted Income Statement (contribution margin format) based on the most likely, most optimistic

3

and most pessimistic outcomes for your business.

4


CRITERIA:

Possible
Marks
Your
Mark
75 – 100%  Methods and procedures discussed in relation to asset
management are appropriate for the type of business
ï‚· Establishment costs and financing are realistic and
consistent with the type of business
ï‚· Appropriate explanations have been provided in the
evaluation of forecasted financial statements
ï‚· The key forecasted financial reports are consistent with
explanations and logically relate to the appropriate report
ï‚· Key sections of the plan relating to the establishment
costs, income statement, cash flows and cost, volume,
profit analysis are logically linked
ï‚· Overall the report is well structured, logical and
professionally presented

60 – 74%  Methods and procedures discussed in relation to asset
management are appropriate for the type of business but
some minor modifications may be needed
ï‚· Establishment costs and financing are realistic and
consistent with the type of business but some gaps
identified
ï‚· Appropriate explanations have been provided in the
evaluation of forecasted financial statements but some
minor gaps identified
ï‚· The key forecasted financial reports are consistent with
explanations and logically relate to the appropriate report
however there are some inconsistencies
ï‚· Key sections of the plan relating to the establishment
costs, income statement, cash flows and cost, volume,
profit analysis are logically linked however there are some
logical inconsistencies
ï‚· Overall the report is well structured, logical and coherent.

5


50 – 59%  Methods and procedures discussed in relation to asset
management are appropriate for the type of business but
some major modifications may be needed
ï‚· Establishment costs and financing are realistic and
consistent with the type of business but some important
gaps identified
ï‚· Appropriate explanations have been provided in the
evaluation of forecasted financial statements however
some important gaps may be evident
ï‚· The key forecasted financial reports are consistent with
explanations and logically relate to the appropriate report
but there are some important inconsistencies
ï‚· Key sections of the plan relating to the establishment
costs, income statement, cash flows and cost, volume,
profit analysis are well linked but there are logical
inconsistencies
ï‚· Overall the report is has some deficiencies regarding its
structure and logic

40 – 49%  Methods and procedures discussed in relation to asset
management are inappropriate for the type of business
ï‚· Establishment costs and financing are not realistic and
inconsistent with the type of business
ï‚· Not enough appropriate explanations have been provided
in the evaluation of forecasted financial statements
ï‚· The key forecasted financial reports are not consistent
with explanations and do not logically relate to the
appropriate report
ï‚· Key sections of the plan relating to the establishment
costs, income statement, cash flows and cost, volume,
profit analysis have not been completed and/or not well
linked and there are significant logical inconsistencies
ï‚· Overall the report has major deficiencies regarding its
structure and logic

0 – 39%  Seriously deficient in all areas.

Comments:




Competent / Not Competent ...Read Less

Solution Preview - Amandeep Kaur GillDate – 13 Nov. 2014 BUSINESS ESTABLISHMENT Introduction of Company Manufacturing sector is considered to be the most wealth making sector in the economy. Welcome to the manufacturing world. Eventually, from the most versatile commercial entities, the manufacturing starts with the raw materials acquisition or extraction that

Original Question Documents

N/A