ambition in action. ambition in action du.au head teacher development program – finance...
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Ambitionin Action
Ambition in Action
www.sit.nsw.edu.au
HEAD TEACHER DEVELOPMENT
PROGRAM –
FINANCE MANAGEMENT
ACTIVITY WORKBOOK
Ambition in Action
www.sit.nsw.edu.au
CONTENT/ Source of Finance Activity
/ Cashflow Activity
/ Sales Budget Activity
/ Purchase Budget Activity
/ Human Resource Budget Activity
/ Monitor Progress Activity
/ Self-Test Quiz
Ambition in Action
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Source of Finance
/ Where does the source of Finance come from in TAFE?
Ambition in Action
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Cashflow Activity
/ On the next page use the cashflow template to complete a cashflow budget for your particular section.
Ambition in Action
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Cashflow ActivityBUSINESS CASHFLOW FORECAST
JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN TOTAL
INFLOW (Receipts)00
GST Collected 0Money from l 0
TOTAL INFLOWS 0 0 0 0 0 0 0 0 0 0 0 0 0
OUTFLOWS (Payments) JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN
Purchases/Stock 0Accounting fees 0Advertising 0Bank Fees 0Electricity 0GST paid 0Insurance 0Lease equipment 0Licences 0
00
Memberships 0Phones - mobile 0Phones/fax - business 0Plant & equipment 0Post & stationery 0Repairs & maintenance 0Vehicle costs - fuel & maintenance 0
00
Wages 0Workers Compensation 0 TOTAL CASH OUTFLOWS 0 0 0 0 0 0 0 0 0 0 0 0 0
OPENING BANK BALANCE 0 0 0 0 0 0 0 0 0 0 0 0Monthly surplus/deficit 0 0 0 0 0 0 0 0 0 0 0 0CLOSING BANK BALANCE 0 0 0 0 0 0 0 0 0 0 0 0
Ambition in Action
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Sales Budget Activity
/ In groups design a small sales budget for your section by product. Include estimates of the following:
/ Sales volume. / Prices. / Selling & marketing expenses.
Ambition in Action
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Ambition in Action
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The Purchase Budget Activity
/ Do TAFE Institutions need to have a purchasing budget?
/ Is purchasing done by the head teachers only as the need arises or should the cost of these activities be accounted for in the business?
/ Should purchasing activities occurring regularly be methodically planned?
Ambition in Action
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/ Have you considered how much time you will need to set aside in your section for purchasing activities?
/ Discuss your ideas with other learners. Are their ideas similar to yours?
Ambition in Action
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Human resources budget
/ What are the costs at TAFE of employing someone?
/ How much time will need to be spent adhering to record keeping, payroll and other administrative tasks
related to employing staff?
/ How much time will need to be spent supervising staff or outsourced work?
Ambition in Action
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Monitor Progress
/ What financial measurements do you think will be important for TAFE? Give reasons why.
Ambition in Action
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Monitor Progress
/ Answers
/ Financial measurements important for your businessThe choice of financial measurements suitable for your business depends on many factors. Is there an inventory to keep track of? Is service the main function of the business? Is there debt? Do you run accounts or deal mainly in cash? Do you have a certain profit objective? You (and your accountant) must understand the reasons for the financial measurements you choose
Ambition in Action
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Self-test Questions
/ Question 1
/ Which of the following lists the two main approaches to developing a cashflow forecast?
/ A Identify sources of finance and guess how much will flow into your business.
/ B Review old forecasts and base the next forecast period entirely on the previous one.
/ C Make a guess about the most likely cashflow forecast and compare this with the best guess of someone
else working in the same industry.
/ D Start with market research and a prediction about sales and profits expected from marketing
strategies and use dollar targets to calculate whether the market can be tapped for this amount.
Ambition in Action
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Self-test Questions
/ Question 2
/ Which of the following is the most liquid business asset?
/ A Machinery./ B Building./ C Stock./ D Cash.
/ Question 3
/ Is the following statement true or false?
/ Financial statements can assist you in monitoring your business’ financial health.
Ambition in Action
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Self-test Questions
/ Question 4
/ Is the following statement true or false?
/ Current assets are those assets which form part of the infrastructure of the business.
/ Question 5
/ Is the following statement true or false?
/ Current liabilities are those amounts owed which need to be paid within a short period of time (i.e. usually within 12 months).
/ Question 6
/ Is the following statement true or false?
/ Financial statements generally show trends, relationships, strengths and weaknesses in key areas of your business.
Ambition in Action
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Answers to self-test questions/ Question 1
/ The correct answer is D - Start with market research and a prediction about sales and profits expected from marketing strategies and use dollar targets to calculate whether the market can be tapped for this amount.
/ These approaches will tell you about market potential as well as the dollar amounts required to survive.
/ Question 2/ The correct answer is D - Cash. / Cash is the most liquid business asset. How quickly certain
assets can be converted to cash is one measure of business viability.
/ Question 3
/ This statement is true. Financial statements are very useful for monitoring the financial health of your business.
Ambition in Action
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Answers to self-test questions
/ Question 4
/ This statement is false. Current assets are those assets that are consumed during the normal operating cycle of the business, e.g. stock and cash. Fixed assets are assets that form part of the infrastructure of the business.
/ Question 5
/ This statement is true. ‘Current liabilities’ refers to amounts owing, other than long-term loans.
/ Question 6
/ This statement is true. These are the benefits of financial statements.