Description
Assessment 2 overview
Assessment Requirements
1. Read the case study.
2. Develop a variance report based on the format and template provided by Houzit.
3. Complete a cash flow analysis on the average length of time it takes Houzit to collect funds from its debtors to determine the trend based on the financial reports in Assessment Task 1.
4. Examine the sales budget and profit budget, cash flow budget and debtor ageing summary provided in the case study for the Assessment Task 2 to identify the following:
a. Issues:
i. Identify, describe and prioritise significant issues that are evidenced in the provided case study information and describe reasons or causes of these issues. Discuss issues of financial probity that you have identified or considered when monitoring these budgets.
b. Variances:
i. Complete an actual-to-budget variance report, using the template provided in the case study.
ii. Identify variances by comparing actual results with the established budget, and provide reasons why these variances may have occurred.
c. Performance:
i. Compare financial performance of the organisation (according to financial information provided) to industry benchmarks for this organisation in line with the retail trade sector.
iii. Determine a trend of the average debtor days and the impact to the cash flow of Houzit.
d. Recommendations:
i. Outline your recommendations for ongoing financial viability for the organisation, based on your assessment of the issues, reasons for variances and organisational performance you have identified (Steps 1–3).
ii. Include recommendations on effective management of any relevant contingencies and issues that you have identified above.
e. Evaluation:
i. Provide a summary review of the financial management processes in place for the organisation, in light of your assessment of the issues, reasons for variances and organisational performance you have identified. Include in this section any recommendations you have for modifying management processes.