Question 1: What is a financial strategy?
|It is an act or action which aims for the improvement of the Finance function according to the objective of the organization. The formation of financial strategies is very important from the organization’s point of view. Before the creation of a financial strategy, we have to keep certain things in our mind such as:
Steps for the creation of financial strategy:
Question 2: List the main components of a financial strategy.
| The main components of the financial strategy are: –
Question 3: List the main steps involved to prepare for a financial strategy.
| Main steps involves to prepare a financial strategy area:
Question 4: What are financial reports?
| Financial report is a report that shows the current financial position of the organization. This report gives very clear, systematic, proper, and structured information. Financial reports help you to provide an understanding of financial information, and appraisal of the current financial situation of the market. It also helps in the identification of opportunities, threats, debility, and durability of the market which also includes competitors as well as organizations (Fuadah, & Setiyawati, 2020). It also provides a lot of information about the financial performance of the organization. There are certain components included in the financial reports are: (Jha, 2019).
1) Balance sheet: The balance sheet helps you to scan or inspect the assets and liabilities of the organization.
2) Income statement: It gives you a proper understanding of the revenues and expenses of the organization. When the expenses are minimized from revenues it gives you an amount of profit or you can have called as the organization’s net income.
3) Cash Flow Statement: There are two types of cash flow one is positive and the other one is negative. An organization has to maintain a positive cash flow to be profitable (Hess, et al., 2019).
Question 5: How can you interpret a cash flow statement?
|A cash flow statement is a statement that shows the inflows and outflows of cash and cash equivalent. Cash flow is divided into three activities operating, investing, and financial activities. Cash flow gives a dynamic understanding of the stage of business. To understand the interpret a cash flow statement are:
Question 6: List different steps involved to analyse financial reports.
|Steps involved to analyse a financial report are:
1) Identify the industry’s economic characteristics: It is very important to understand the economic conditions of your domain which gives you an upper hand on your competitor and helps in building effective strategies according to the environment.
2) Identify company strategy: Different-different strategies are formed during the process of strategy formulation but we have to choose the best strategy that helps an organization to reach its objective.
3) Assess the quality of the firm’s financial statement: This step includes determining the quality of the overall financial statement by analysing it.
4) Analysing of risk: The next step is to help in the finding of risks that are involved in choosing a particular strategy or in the external environment.
5) Forecasting of profitability: It includes all the assumptions we usually make about the future in terms of profit (Fuadah, & Setiyawati, 2020).
Question 7: What is a business budget? List its different features.
|A business budget is a type of budget which involves the incomes and expenses of a particular income.
Feature of Business Budgets are:
1) Business budget is an objective achieving process that helps the organization to achieve its objective
2) It is futuristic and a business task.
3) It gives you a rough estimation of the overall expenses of the financial year.
4) It helps in determining the income and expenditure of the organization of the financial year.
5) Business budget is authorized by higher command and it should be in the return form.
6) It makes you educate about the administration and approaches of budget in fiscal or financial terms.
7) It involves the prediction of concluding the fiscal position of the business.
8) Business budget shows the business administration which needs to follow to accomplish organizational objectives (Murad, 2022).
Question 8: Describe the main steps involved in developing budget according to organisational and legislative requirements.
|Steps involve in the developing budget according to the organizational and legislative and requirements are:
1. Detect organizational profit: For the creation of a business budget, the first step an organization needs to follow is to adjust or detect the overall profit of the financial year of the organization subtracted from taxes and deductions.
2. Detect organizational expenses: The next step is to adjust all the expenses of the organization during the financial year.
3. Pick the proper budget ideas: In the third step, we create a list of different ideas related to our budget, and then after analysing all the alternatives we have to select the most suitable plan for our organization.
4. Implementing the plan: The next step is to choose the best plan among all the plans and implement it in the organization.
5. Monitoring of the implemented plan: The next and final step of the entire budget plan is to continue monitoring the implemented plan whether it is performing well or not (Murad, 2022).
Question 9: List different ways to presentations recommendations to the stakeholders.
| Ways the present the recommendation to the stakeholders are:
Question 10: What are support staffs?
| Support staff comprises two words support and staff which includes the workers that work for or in the business to keep a business alive and helps the workers who are involved in the essential business called support staff. Some of the other names of the support staff are an organization, faculty, workers, employees, assistant, team, force, etc. Support staff includes different-different types of work some of them are:
There are also different types of support staff they are:
Question 11: List different methods to support staff in the implementation of recommendations?
|Methods to support staff are:
1. By providing them with learning about the work they will do for the development or the improvement of the organization. An organization will perform well and achieve its objective if its support staff will be well trained.
2. An organization can support staff by spinning them from job to job basically giving them an overview of different work they used to perform in the organization.
3. Asking about their concerns on the particular work
4. Provide mentoring which gives them new knowledge about the work they are doing and how to make it easier.
5. Communicate with the know about their concerns and preferences it will make them feel and give them the confidence to work with their full potential
6. Treat them as an important element of the team. One should treat a support staff as an important element of their team (Goel, et al., 2012).
Question 12: What is a budget deviation? List different reasons for deviations in a budget.
|The budget deviation is an action where funds are accessible for dropping on an appropriate matter which are allowable to employ in a way that is dissimilar to the original budget and authorises by the business.
The different reasons for the deviation in the budget are:
1. Mistakes or errors: There are multiple reasons which cause the deviation in the budget the first one is the errors. Errors like not taking proper assumptions or any mistakes because of maths or because of wrong data and so on etc.
2. Dynamic Conditions of Business: The second cause of the deviation in the budget is the change in the business condition. The everyday business has evolved and the environment of business is completely dynamic. It affects the budget of a business.
3. Hopes: According to the budget plan we generally hope for the best outcome high hopes and sometimes it won’t happen as planned (Navarro, 2015).
Question 13: What are the action plans to remedy significant deviations?
|The action plan to remedy significant deviations are:
Step 1. Find a photocopy of the last budget plan:
So basically every work starts from where it ends so to correct a budget deviation we firstly have to re-analyse or examine all the budget from start to end to find out the mistake.
Step 2. Examine the overall picture of expenses:
The next step is to manage or determine all the external cost or the cost that is going out of the organization and spend time investigating all the errors.
Step 3. Communicate to management:
The next thing is to collect and manage the data or the information that you have received and communicate all the information to the management as soon as possible.
Step 4. Implement the new budget:
Now after understanding all the issues and the problems present in the budget is solved so you can implement a new budget in the organization can follow along (Reta, et al., 2018).
Question 14: What are the main points to consider while developing contingency plan for your organisation?
| To understand the main points of a contingency plan for the organization they first have to understand what is a contingency plan. A contingency plan helps an organization fight future threats or situations that will or will not come.
The main points that are considered while developing a contingency plan are:
Assume that you are working as project manager in ABC construction company. Your company has given you the opportunity to lead one project in regional area. You are required to prepare financial strategy in this project. In regard to that, answer the following questions:
Question 1: What are the different strategies that you will use to analyse financial reports?
| Strategies use to analyse financial report of the project are:
1. Analysing financial report on regular basis: If an organisation wants to perform well on a regular basis then the organisation has to analyse its financial report of the regular basis because the climate condition of the business world is not stable so the organisation have to track all the changes and then take a necessary action according to it.
2. Recognition of where an organisation is not performing up to the mark: The next thing is to recognise where an organisation is not performing up to the mark or according to your assumptions and what is the reason behind it (Zhi, 2020).
3. Checking of income statement: An organisation should review its income statement or profit and loss account to get the idea of performance or to maintain the records of finance.
4. Assess cash flow statement: An organisation should inspect its cash flow statement to get the idea is the organisation id performing according to the plan or not in terms of finance.
5. Audit your balance sheet: Last you also have to audit or analyse the organisations balance which gives the information about assets, liability and the fiscal place of the organisation (Jha, 2019).
As you have analysed the financial reports in this project, discuss the steps and procedures that you will use to identify resourcing requirements to implement financial recommendations on project by ranking.
|Resource planning or the identification of resource requirement is an expertise actual employment of assets because business has scare resources and the management of all the assets it’s very important. There are different types of resources or assets which needs to be save because organisation has a shortage of it so of them are:
1. Resources related to finance: It very important to insure the availability of finance and use of finance in the right way whether it is coming from inside of the organisation and out the organisation whether short term or long term. Financial resource gives the power to the organisation to buy commodity and services which are used in business or day to day or for long term activities.
2. Human Resources: The second or the most important in terms of making an organisation more profitable are the human resource or the humans which are working in the organisation. Every organisation need a penalized human resources which can provide strength by their work to the organisation.
3. Other Resources: Others resources includes machine transportation facilities location all the resources have its own importance it terms of finances because the wastage of any resources lends to the wastage of finance (Jury, 2012).
As you have identified resourcing requirements to implement financial recommendations. Now you have to explain the appropriate methods and strategies to monitor implementation of financial strategy of work within your organisation?
|Monitoring involves the group of information which is examine on a regularly interval. Monitoring use the past information or result to create a new strategy finance to survive in the business environment (Zhi, 2020).
The strategies used to monitor financial strategy are:
1. Determining business fiscal situation: To understand and monitor the performance of the financial strategy an organisation had to understand the current situation of a business in financial terms.
2. Regulate Fiscal objectives: On organisation should know about its objectives how it should be targeted and achieved.
3. Substitute of: On organisation should maintain substitutes of funds so if one investment if failed we have other option to regulate the financial flow in and out of the organisation.
4. Understanding of substitute investments: Assess all the others sources of finances from where an origination regulates its financial needs
5. Arrange it with earlier fiscal idea or strategy: Basically arrange this ides or plan with the implemented strategy.
6. Re-view again-again: Now monitor this strategy or method on the regular basis (Prastawa, et al., 2021).
Answer may vary but student must address the questions according to the following resources:
- Learner Guide
- PowerPoint presentation
- Self-study Guide
- Live Training sessions and discussions with trainers/assessors
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