Assessment Task 3 BSBFIM601 Manage Finances
Attribution to © 2011 Innovation and Business Assessment Task 3 – BSBFIM601 Hospitality s1-2019
Industry Skills Council Ltd Author: HenryM
1st edition version: 2 Last Updated: May 19
Page 1 of 3
Assessment Task 3: Monitor & Review Budgets
Case Study
Submission details Bunyip Investments Pty Ltd
The Assessment Task is due on the date specified by your assessor. Any variations to this
arrangement must be approved in writing by your assessor.
Submit all required evidence as outlined in specifications below:
Signed cover sheet with printed budget spreadsheets and word document answers
Electronic version of spreadsheets to be emailed to assessor
The task may be completed in groups of two (preferable).
Performance objective
This Assessment Task requires you to monitor the implementation of a budget and report on
the variances, trends and performance of the established budget for a fictional business and
provide recommendations for ongoing financial viability.
Assessment description
You will need to review the provided current case study information and compare it to the
budget you established in Assessment Task 2.
After evaluating these you will need to report on the following:
● significant issues
● variances from budget
● comparative performances
● recommendations for ongoing financial viability
● evaluation of financial management processes.
This assessment will cover aspects of Element 4.
Assessment Task 3 BSBFIM601 Manage Finances
Attribution to © 2011 Innovation and Business Assessment Task 3 – BSBFIM601 Hospitality s1-2019
Industry Skills Council Ltd Author: HenryM
1st edition version: 2 Last Updated: May 19
Page 2 of 3
Procedure
Read the case study.
- Variance report: Develop a variance report based on the format and template provided.
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. - Debtors reports: Complete a cash flow analysis on the average length of time it takes
Bunyip Investments to collect funds from its debtors. Where required, use information from
the earlier case study. Determine a trend of the average debtor days, analyse the aged
debtors breakdown and discuss the impact to the cash flow of Bunyip Investments Pty Ltd
of any payments by debtors being late. - Examine the sales budget, profit budget, GST cash flow budget and debtor ageing
summary 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.
Include in this issues of financial probity that you have identified or considered
when monitoring these budgets.
b. Performance:
i. Benchmarks: Compare financial performance of the organisation (according to
financial information provided) to industry benchmarks for this organisation in line
with your industry sector.
ii. Board questions: Respond to the performance questions provided by the CEO, as
provided by the Board of Bunyip Investments Pty Ltd.
c. 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.
ii. Include in this section your plans for a revised budget, effectively managing
contingencies and issues that have been identified in feedback and monitoring of
the budgets.
Assessment Task 3 BSBFIM601 Manage Finances
Attribution to © 2011 Innovation and Business Assessment Task 3 – BSBFIM601 Hospitality s1-2019
Industry Skills Council Ltd Author: HenryM
1st edition version: 2 Last Updated: May 19
Page 3 of 3
Case study
Soon after the end of the first quarter, Chris Watson the CEO of Bunyip Investments Pty Ltd,
asked you to follow up with Toni Street, Bunyip Investments’ accountant, to see how the actual
results compared with the budget you had prepared three months ago.
You explained that you had a meeting with Toni that afternoon to get the results and that you
would report back as soon as you had done some analysis.
The key questions that the Board was most interested to have answered from the budgets and
the variance reports were:
● ‘To what extent do the reports support the view of the board that Bunyip Investments is
financially viable?’
● ‘Will we be able to maintain our gross profit margins in the predicted downturn?’
Harrison and you both agreed that it had been a tough quarter with the economy still in a flat if
not recession business cycle and the impact this was having on the retail sector. Possible rising
interest rates in the future are always a concern.
Harrison was pleased that the sales seem to be holding up reasonably well as first quarter
results are generally supported by factors relating to public and school holidays but he was
concerned however about the discounts that had to be given to generate these sales.
‘That’s going to hurt us at some point’ Harrison said. ‘Just a pity we could not get
into some magazines this quarter to promote the store offers. I’m sure that would
have helped us exceed the budgets you set. I guess we will just have to spend that
advertising money in the next quarter’ Harrison said. ‘I still think we are running our
wages and salaries a bit high. The industry benchmark for wages and salaries is
close to 11%* of sales’
Chris Watson went on to explain,
‘One of our contingency plans in a slowing economy is to reduce our exposure to
debt by applying our profits to the repayment of the long term debt. This will help
reduce the interest burden on the business and take some pressure off the
diminishing profits. It would also be of interest to determine the impact that our
debtors has on the cash flow of the business from 2016/17.’
You are a beneficiary of the company’s profit bonus scheme that is based on the profitability of
the company’s financial reports which you are required to prepare.
You also prepare the departmental reports that form the basis of the performance review of the
managers. You are the manager of finance/administration and prepare this department’s
report as well.
You met that afternoon with Toni and she provided you with the following report on the actual
results for the quarter ended 30 September 2020.
- 11% of sales is the figure used in this case study. Your research may uncover other benchmark %’s for
relevant industries. The task is to demonstrate your understanding of benchmarks in your analysis.