Student Guide: Financial Management Block 2

SIT40516 Certificate IV in Commercial Cookery Block F
SIT50416 Diploma in Hospitality Block A
Student Guide
Financial Management Block 2
Units of Competency
This module is comprised of the following units of
competency:
SITXFIN002 Interpret financial information
Elements of Competence
 Access and interpret financial information
 Use and provide financial information.

SITXFIN003 Manages Finance within a budget
 Allocate budget resources
 Monitor financial activities against a budget
 Identify and evaluate options for improved budget performance
 Complete financial and statistical reports

SITXFIN004 Prepare and Monitor Budgets
 Prepare budget information
 Prepare budget
 Finalise budget
 Monitor and review budget
FM2 - SITXFIN002, SITHXFIN003, SITXFIN004 - CC Block F/ Hosp Dip Block A - Student Guide - Reviewed Jan 2018 Page 1
Table of Contents
Page
Units of Competency....................................................................................................................... 1
Methods of Assessment.................................................................................................................. 7
Assessment Outcomes................................................................................................................... 8
Reasonable Adjustment.................................................................................................................. 8
Assessment Schedule..................................................................................................................... 8
Assessment One: Case Studies......................................................................................................9
Assignment One: Case Studies - Marking Guide..........................................................................19
Assessment Two: Assignment......................................................................................................21
Assessment Two: Assignment - Marking Guide............................................................................23
Assessment Three: Project........................................................................................................... 25
Assessment Three: Project - Marking Guide.................................................................................27
Assessment Four: Written Test.....................................................................................................29
Assessment Four Part A: Written Test - Results Sheet.................................................................30
Assessment Four: Written Test Part B..........................................................................................32
Assessment Four: Written Test Part B- Results Sheet..................................................................33
Final Assessment Summary & Feedback......................................................................................35
Program
This program is of eighty (80) hours duration: sixteen (16) hours per week for one teaching block
of five (5) weeks.
Module Overview
This module covers three units of competency.
The first describes the performance outcomes, skills and knowledge required to interpret financial
information and reports used by organisations to monitor business performance and provide
information on operational or departmental financial activities
This second describes the performance outcomes, skills and knowledge required to take
responsibility for budget management where others may have developed the budget. It requires
the ability to interpret budgetary requirements, allocate resources, monitor actual income and
expenditure and report on budgetary deviations.
This third describes the performance outcomes, skills and knowledge required to analyse financial
and other business information to prepare and monitor budgets. It requires the ability to draft and
negotiate budgets, identify deviations and manage the delivery of successful budgetary
performance.
The module is comprised of the following units of competency:
SITXFIN002 Interpret financial information SITXFIN003 Manages Finance within a budget

To achieve competency in this unit you must demonstrate you ability to:
1. Access and interpret financial information
2. Use and provide financial information
You are required to demonstrate skills in:

 literacy to:
o read and interpret a wide range of financial documents o
write explanatory notes to accompany financial information
• numeracy to interpret and use financial records and to calculate entries within financial
reports
• planning and organising to prepare information within designated timelines
• problem-solving to identify and resolve financial reporting discrepancies
• technology to use accounting software packages
You are also required to demonstrate knowledge of:

• for the specific industry sector and organisation:
o financial terminology, including average spend, cover, wastage and nett costs o
reporting periods, including different financial years observed by different
businesses
o the features and functions of accounting software programs used to manage
financial operations
o use of financial information and reports in monitoring overall business performance
• key elements of financial record keeping and key terminology, including:

o ledgers, subsidiary ledgers and journals o transactions, receipts and disbursements
o invoices, accounts payable, debtors and creditors o cash flow
• key elements of accounting and how it provides information for business management,
including:
o charts of accounts and account categories, such as assets, liabilities, equity, cost of
sales, income and expense
o basic rules for double entry accounting and the concept of debits and credits o
accrual versus cash accounting
o profit and loss statements and balance sheets as key financial statements used to
measure business performance, including their role; how these reports are
generated; and the format, features and key information
o reconciliations, including purpose, different types of reconciliation and the impact of
unpresented cheques, bank charges, direct debits and credits on reconciliations
o concept of costing, including fixed and variable costs o accounting for and reporting
Goods and Services Tax (GST).
SITXFIN003 Manages Finance within a budget
To achieve competency in this unit you must demonstrate your ability to:
1. Allocate budget resources
2. Monitor financial activities against budget.
3. Identify and evaluate options for improved budget performance
4. Complete financial and statistical reports

• communication to discuss budget requirements and to seek and provide feedback
• critical thinking to analyse resource use and costs
• initiative and enterprise to proactively identify better resource usage and budgetary
improvements
• literacy skills to:
o read and interpret a wide range of business and financial documents o
research options for more effective budgetary control o write budget
reports and recommendations
• numeracy to interpret and use budget figures in day-to-day work operations, and to
calculate budget estimates and scenarios for performance improvement
• planning and organising to produce budgetary reports within designated timelines
• problem-solving to identify budget deviations and deficiencies and develop options for
improved budgetary performance
• self-management to take responsibility for budget management
• teamwork to discuss desired budget outcomes with team members and provide direction on
resource usage
• technology to use accounting software packages.

• a range of formats for, use and contents of:
o budgets
o financial reports o statistical reports
• budget terminology
• for the specific industry sector and organisation:
o use of budgets to control costs and enhance profitability o importance of

budget control o techniques for maximising budget performance o financial
reporting procedures and cycles o features and functions of accounting
software programs used to manage budgets.
To achieve competency in this unit you must demonstrate your ability to:
1. Prepare budget information
2. Prepare budget
3. Finalise budget
4. Monitor and review budget

• communication to liaise and negotiate with colleagues on potential complex and conflicting
budget requirements
• critical thinking to analyse internal and external factors for potential impact on budget
• initiative and enterprise to draft budgets that meet organisational objectives  literacy
to: o read and interpret information that deals with complex ideas and concepts
o research internal and external factors that may impact on budgetary
performance
o write complex budget reports and recommendations
• numeracy to interpret and analyse financial information, including forecasts and previous
performance data, and to develop financial estimates and scenarios using complex
calculations
• planning and organising to access and sort all information required for budget preparation
and to coordinate a timely, efficient and consultative budget development process 
problem-solving to: o identify budgetary challenges and develop different options for their
resolution
o identify budget deviations and deficiencies and develop options for meeting
budgetary requirements
• self-management to take responsibility for budget development
• teamwork to invite and coordinate the input of others in the organisation, and provide
direction on budget management  technology to use accounting software packages.
•.
• budget terminology
• for the specific industry sector and organisation: o role and nature of budgets
o
a range of budget formats, budget performance and financial reports o
financial reporting procedures and cycles
o features and functions of accounting software programs used to prepare and
monitor budgets
• budget preparation and monitoring practices and techniques, including:
o sources and contents of data required for budget preparation o techniques for
making budget estimates o common reasons for deviations and budget
deviation management.

Methods of Assessment
There are four assessments for this module.
Case studies
This consists of four case studies in which students are provided with sets of financial information
related to hospitality scenarios and are asked to interpret the information and/or present it as a
short report.
Some of these may be done either in class, (individually) and others outside teaching hours
depending on the schedule. You should inform students when they are due.
Assignment
In this assessment, students are required to prepare a budget for personal finances and monitor it
over the 5 weeks of the course. They must then produce a budget report, identify any budget
variances, analyse the causes and propose ways of addressing variances in the future.
The assignment requires students to do a draft budget and consult with stakeholders before
finalizing it. Stakeholders could be other colleagues or yourself, if they do not wish to make
personal information known to others. The purpose of the consultation is to seek feedback. You will
need to inform them that all personal financial information submitted will be destroyed (or locked
securely). You may allow time in class to enable this consultation.
Project
This consists of a two part project in which students are to develop budgets and answer questions
around the budgeting situation, based on a hypothetical situation.
Answers will be individual, based on their own interpretation of the data. They should use
conventional formats and suitable software for presenting the budget. Responses should be
assessed using the Marking Guide.
Written Test
There are two parts. For Part A, students should be given two hours to complete the test. For Part
B, one and a half hours should be adequate.
Part A consists of 4 sections with questions designed to test both knowledge and skills: 5 multiple
choice questions, 10 filling in the blanks, 10 True/False and 18 Short Answer Questions. Students
must complete them all.
Tests should be administered according to the Assessment Schedule; Copies of the written test will
be given to the trainer/assessor by the Program Manager on the day of the written test. The rules
for the written test are explained below:
• Mobile phones must be off. They may not be placed on silent. Students who have been
found to have left their phone on will have their paper confiscated.
• Complete all questions as directed in pen – blue or black only.
• The use of electronic translators is not permitted.
• You may not talk at any time unless directed, including, when you are leaving the exam.
Students talking at any time, unless directed, will have their paper confiscated.
• Copying and cheating students will have their paper confiscated!
• Students leaving an assessment room will be deemed to have completed their assessment
and will NOT be permitted to return.
• Confiscated papers will not be assessed.
Assessment Outcomes
The assessment result will be given as either:
• S – Satisfactory
• NS – Not Satisfactory – requires re-assessment
Students will be awarded C = Competent on completion of the unit when satisfied that the student
has completed all assessments and has provided the appropriate evidence required to meet all
criteria. If the student fails to meet this requirement they will receive NYC = Not Yet Competent
and will be eligible to be re-assessed.
To be deemed competent in the units, students must achieve satisfactory outcomes in both theory
and practical components of the units.
Reasonable Adjustment
Remember to make adjustment in the assessment methods for any learners with special needs,
particularly those with language and literacy requirements.
Assessment Schedule
Week Case Studies Assignment Project Written Test

1 Hand out Hand out
2
Due Hand out 
3
4
5 Due Due 
Assessment One: Case Studies

Name:
Student Number:
Group:
Teacher:
Teacher use only: Result Satisfactory/Not Satisfactory
For this assessment you are to demonstrate your skills to access and interpret financial information
correctly and accurately as well as your ability to apply financial information to management
activities, identifying and using relevant business performance indicators and benchmarks for
decision-making purposes.
You will also be required to demonstrate your knowledge of the profit and loss statement and the
balance sheet as the key financial statements used to measure business performance.
There are four (4) case studies. You are to complete them all.
Case Study One
Using the following information, prepare a Profit & Loss Statement for the Food & Beverage
Department (Year ended 30 June 2009)
Holmes Hotel
120 Rooms – average occupancy 87%
3 PAX per room (average)
Food and Beverage Department
Sales information:
• 75 seat restaurant
• Breakfast revenue solely from hotel guests
• 70% of overnight guests eat breakfast
• Average breakfast spend per person $12.50
• Lunchtime seat turnover is 1.5
• Average lunch-time spend $17.50
• Dinner seat turnover is 2
• Average dinner spend $26.50
• Beverage revenue 50% food revenue (total)
These figures are related from Thursday to Sunday. These figures drop by 20%
from Monday to Wednesday.
Cost information:
• Food costs: 30% of food sales
• Beverage costs: 25% of beverage sales
• Labour costs: 35% of total F&B sales
• Overhead costs: 25% of total F&B sales
• Expected annual indirect costs next year: $300,000 (same as 2007/8)
• Fixed costs $342,000 per annum
Profit & Loss Statement

Food & Beverage Department
Year ended 30 June 2009
Sales Revenue 1,571,545
C.O.G. 432,175
Gross Profit Margin 1,139,370
OPERATING EXPENSES
Labour Cost 550,041 35% of sales revenue
Overhead Cost 392,886 25% of sales revenue

Indirect Cost 300,000 Actual amount
Fixed Cost 342,000 Actual amount

Total 1,584,927
NET PROFIT/LOSS (445,557) (1,584,927- 1,139,370)
Case Study Two
The Sunshine Fire

Sunshine Pty Ltd is a function centre located in Kangaroo Valley, NSW. In 2005 a fire
occurred in the administration office overnight (on 30th of June, 2005). Sunshine Pty Ltd
use a manual accounting system and although many accounting records were lost, the
owner desperately tried to collect as much information as possible on the business’s
financial affairs. The owner contacted both creditors and debtors and managed to have
some of the financial information recovered. With the recovered records and information
obtained from outside sources the following Trial Balance was developed.
Sunshine Pty Ltd
Trial Balance
As at 30th June, 2005
Account Title DR CR
Cash at the bank 198
Accounts receivable 382
Food and beverage Stock 200
Fixtures and Furniture 100
Accumulated depreciation-furniture and fixtures 60
Building 250
Accumulated depreciation on building 140
Accounts payable 578
Salary payable 5
Unearned service revenue 13
Capital 264
Service revenue 330
Salary expense 177
Food and beverage expense 40
Depreciation expense- furniture and fixtures 20
Depreciation expense- building 10
Miscellaneous expense 13
Totals 1390 1390
Required:
Based on the information provided by the owner of Sunshine Pty Ltd, answer all questions:
a. What is the amount of Sunshine’s Current Assets
b. What is the amount of Sunshine’s Total Assets
c. Prepare a balance sheet for the restaurant based on the information provided as of 30th of June
2005.
Sunshine Pty Ltd

Balance Sheet
As at 30th June 2005
Cash at Bank 198 Accounts Payable 578

Accounts Recievable 382 Salary Payable 5
Food and Beverage Stock 200 13
Fixtures & Furnitures 100 Unearned Service Revenue 264
(60)
Capital
Accumulated Depreciation - F&F 250
Building
Retained Earnings
Accumulated Depreciation - Building
Total Liabilities and Equity
Total Assets
d. Prepare an Income Statement for the restaurant based on the information provided as of 30th
June 2005.
Income Statement for Sunshine Pty Ltd

for the period ending 30th June 2005
Revenue
Service Revenue 330
Expenses
Salary Expense (177)
Food & Beverage Expense (40)
Depreciation Expense (F&F) (20)
Depreciation Expense (Building) (10)
Miscellaneous Expense
Total Expenses
Net Profit (Loss) 70
e. Briefly explain the role of the financial statements prepared in question c and d.
f. What key financial information operational managers can have access to by analysing: a) A
Balance Sheet
b) An Income Statement
g. The fire has destroyed the accounting records because Sunshine Pty was using a manual
accounting system. Would you recommend to the owners to switch to a computerized
accounting system? If so, what benefits/features regarding computerized accounting systems
would you use to support your argument?
ANSWERS
a) 780
b) 930
c) Prepared Above
d) Prepared Above
e) The financial statements are made to show the overall situation of the company, spe-
cifically to show the profit that is being made, the cashflow that are generated and the
financial position of the company. This information is useful for stakeholders and
individuals that are looking to either make transactions with the company or make
investments.
f) a) The operational manager can calculate various ratios from the Balance sheet(Quick
Ratio, Current Ratio, Debt/Equity Ratio and many more). The Current assets show
assets that are liquid, non-current assets are those which cannot be converted to cash
within a year whereas the Fixed Assets are used by the company to generate Revenes.
The current liabilities are short-term loans and payables, non-current liabilities are long-
term loans like mortgages whereas Equity is the investors amount. This gives an overall
standing of the company as the manager can see the assets & liabilities outstanding
b) The operational manager can calculate ratios such as (Gross Margin, Profit Margin,
Earnings per Share, Times Interest Earned and with a combination of Balance Sheet,
Return on Shareholders Equity. If the manager wishes to see the Income Statement in
its raw form, he can see the Sales that the company has done and the costs associated
with it and the profit that the company is making. Negative values would be an indicator
of a warning sign whereas he can compare the current year income statement with that
of previous years to see the overall performance of the company over the years.
g) Yes, Sunshine Pty should definately move to an automated accounting system.

There are many benefits to using the automated accounting system, firstly the entire
process of preparing accounts consumes less time as everything is computed through
softwares and is available at the click of a button. Next, the information is more
accurate as it is produced by a computerized system which reduces the possibility of
human error. Next this creates a more cost-effective process, since the time required is
reduced and less time is spent finding/correcting errors. Lastly, if we continue to use
manual accounting system while the company grows, the accounting process will
become more and more complex, therefore the manual system will not be able to adjust
to these changes whereas the system will continue to do its calculations based on the
formulas feeded into it.
Case Study Three
Paradise Reef is a Resort Hotel based in the famous Gold Coast. The resort has 75 guest
rooms and a small dining room with 40 seats. The following is a summary of financial
information provided by the resort’s manager for the month of March 2008.
a) Room revenue was $91,108.
b) A total of 1,798 rooms were occupied.
c) A total of 3,417 guests are using the 1,798 rooms occupied.
d) Dining room food revenue was $45,209.
e) Dining room beverage revenue was $14,810.
f) The dining room serviced a total of 3,720 guests.
g) Cost of sales, food was $18,904.
h) Cost of sales, beverage was $4,805.
i) Guest rooms labor costs were $21,867.
j) Dining room labor costs were $15,011.
Required
Based on the information provided by Paradise Reef calculate the following:
a) Rooms occupancy percentage:
b) Food cost percentage
c) Beverage cost percentage
d) Rooms labor cost percentage
e) Dining room labor cost percentage
f) Beverage sales revenue to food sales revenue percentage
g) Beverage sales revenue to rooms sales revenue percentage
h) If you were the manager of Paradise Reef and you had available $100,000 to invest in the
business operations, which one of the following actions you would support? (Justify your
answer based on the figures provided above)
a) Renovation of the premises in order to increase the number of guest rooms; or
b) Renovation of the dining area in order to increase the number of seats available.
i) Name two software packages that would be adequate for running this operation? What
softwares would recommend if the revenue was 5 times higher?
ANSWERS
a) 77% b) 80% c) 20% d) 59% e) 41% f) 33% g) 16%
h)
Guest Room Dining Room
Revenue: 91,108 Revenue: 60,019
Labor Cost: 21,867 Cost of Sales:
23,709
Return/Dollar: 4.17 Labor Cost: 15,011
Return/Dollar: 1.55
Since the Dollar return is more with Guest Room, therefore if I had an additional 100,000, I
would invest it further in increasing the number of guest rooms.
i) MYOB and Cashwhiz can be used to run this type of business, but if the business were to
grow 5 times more, then softwares like Quicken and MYOB can be used. It may also use
Micros Fidelio if a more sophisticated software is needed.
Case Study Four

Catering on the Run is an Australian owned catering company. The business started activities on
the 1st of July 2005 and the business owners are now looking for 2 new business partners.
Catering on the Run is owned by two brothers and employs 100 staff. The owners have offered
you and your brother a combined 25% shareholding for a one-off payment of $200,000. Your
brother is a famous chef in Australia and can add a great deal of commercial cooking expertise to
the business but has absolutely no financial knowledge. He has asked you to interpret the financial
information provided by the owners of Catering on the Run and decide if you both should go ahead
with the investment.
Catering on the Run Ltd

Comparative Income Statement
For the years ended 31 December 2007 and 2006
Increase (Decrease)
20X7 Amount %
Net Sales $858 ,000 $55,000 6.8
Cost of goods sold $513,000 $509,000 $4,000 0.8
Gross profit 17.3 $345,000 $294,000 $51,000
Expenses (revenues)
Selling expenses 10.5 $126,000 $114,000 $12,000
Administrative expenses (4.1) $118,000 $123,000 ($5,000)
Interest revenue ($4,000) --- ($4,000)
Interest expense 71.4 $24,000 $14,000 $10,000
Total 5.2 $264,000 $251,000 $13,000
Profit before income tax 88.4 $81,000 $43,000 $38,000
Income tax expense 94.1 $33,000 $17,000 $16,000
Net profit 84.6
$48,000 $26,000 $22,000
Catering on the R un Ltd
Comparative Balance Sheet
For the years ended 31 December 2007 and 2006
Increase
(Decrease)
20X7 20X6 Amount %
Assets
Current assets:
Cash at bank $29,000 $32,000 ($3,000) (9.4)
Accounts receivable, net $114,000 $85,000 $29,000 34.1
Inventories $113,000 $111,000 $2,000 1.8
Prepaid expenses $6,000 $8,000 ($2,000) (25.0)
Total current assets 11.0 $262,000 $236,000 $26,000

Non-current assets:
Long-term investments 100.0
$18,000 $9,000 $9,000
Property, plant and equipment, net 27.1
$507,000 $399,000 $108,000
Total assets 22.2
$787,000 $644,000 $143,000
Liabilities
Current liabilities:
Loans payable 55.6
Accounts payable 7.4
Accrued liabilities (12.9)
Total current liabilities 12.7 $42,000 $27,000 $15,000
Non-current liabilities $73,000 $68,000 $5,000
Long-term borrowings 46.0 $27,000 $31,000 ($4,000)
Total liabilities 33.0 $142,000
Net assets 11.3 $126,000 $16,000
$289,000 $198,000 $91,000
Shareholders’ Equity
$431,000 $324,000 $107,000
Share capital 0.0
Retained profits 26.9 $356,000 $320,000 $36,000
Total shareholders’ equity 11.3
$186,000 ---
$186,000
$170,000 $134,000 $36,000
$356,000 $320,000 $36,000
Required:
Analyse the financial statements provided by Catering on the Run and benchmark it against data
collected from industry average (provided in the table below). Write a brief report (250 words) to
your business partner regarding the proposed business acquisition. Ensure you include
calculations of the financial ratios used to arrive to your decision.
Food services and drinking places Corp

Average Financial Ratios
Return on Sales (%) 8.58
Return on Assets (%) 14.87

Return on Net Worth (%) 40.85
Quick Ratio 0.73
Current Ratio 1.01

Inventory Turnover (x) 62.22
Assets: Sales (%) 0.58

Tot Liabilities: Net Worth (x) 1.75
ANSWER
When an investor is looking to invest in a company, one of the most important ratio is the Return
on Net Worth. This ratio is similar to Return on Equity where we see how much return the
shareholders get on their investment. In this particular company, this ratio is well below the
Industry Average (only 13% as compared to market 40.85%). Another ratio that raises eyebrows is
the Inventory Turnover, the Industry average is 62.22 while this company only has a turnover of
4.58. This ratio deals with the Inventory that is sold during the year, since this ratio is so low, this
indicates that the company is not selling goods quickly and that demand for their products is low.
The Return on Sales ratio is also lower than the industry average (5.6%), this ratio is commonly
used to see the operational efficiency and profitability of the business. Although this ratio has gone
up from 3.2% (2006) to 5.6% (2007), it still remains below the industry average of 8.6%, this
means that the company is not efficiently generating profits from its revenues. The Return on
Assets ratio shows a similar story where the Industry average is 14.87% and the Company only
has a ROA of 6.1%, this ratio shows that the company is not effectively managing its assets and
economic resources to produce earnings. This is the reason why the Assets:Sales Ratio is almost
twice the industry average (0.92 as compared to industry 0.58) and has increased from 1.01
(2006) to 1.21 (2007). This further shows that the company is not able to convert assets into sales
and possibly a downturn in the business. Due to the reasons mentioned above, I believe they
should not invest in the business as it is performing well below the industry.
Assignment One: Case Studies - Marking Guide
Unit of Competence SITXFIN002 Interpret financial information
Student Name
Student ID
Assessor Name
Date of assessment
Assessment Case studies
Did the student: S NS Comments
(Case Study One)

Demonstrate knowledge of profit and loss
statements and balance sheets as key
financial statements?
(Case Studies Three and Four)
Identify financial information correctly
applying to particular areas of work
operation.
(Case Study Four)
Identify the required and relevant business
performance indicators necessary to justify
the proposed investment decision and
benchmark against information provided?
Calculate and interpret the following

financial ratios correctly.
• Return on Sales (%)
• Return on Assets (%)
• Return on Net Worth (%)
• Quick Ratio
• Current Ratio
• Inventory Turnover (x)  ROI
analysis?
(Case Studies One - Four)

Demonstrate understanding of profit and
loss statements and balance sheets as
key financial statements used to measure
business performance, including formats
and features
Demonstrate critical thinking when
evaluating the financial information
provided?
Demonstrate literacy skills to interpret a
wide range of business documentation?
Demonstrate appropriate numeracy skills
when interpreting the financial reports?
Feedback to student:
The student’s overall

 Satisfactory  Not Satisfactory
performance is:
 Yes  No
Is re-assessment necessary?
Date
Assessor
signature
Date
Student signature
Assessment Two: Assignment

SITXFIN003 Manage finances within a budget SITXFIN004
Develop and monitor budgets
Name:
Student Number:
Group:
Teacher:
For this assignment you are to demonstrate your ability to develop and monitor a budget and to
manage finances within a budget. You must demonstrate your knowledge of:
• information required for budget preparation

• components of a budget and a budget performance report
• techniques for making budget estimates
• type of supporting information required
• use of software for preparing and monitoring budgets
• how to present budgets and budget reports
• budget deviation management, including common reasons for deviations
You are to develop a budget for your own personal finances, monitor it over the 5 weeks of the
course and report on the budget variances at the end. You should include your income and all
costs! As part of developing the budget you will need to consult with colleagues or your
trainer/assessor to seek ideas and support and to make sure that you have addressed everything
in your budget. Discuss this with your trainer if you prefer to keep your financial information private.
(All information on your budget submitted will be returned.)
Tasks
1. Prepare for doing your budget. List all the factors that you will include. You must provide accurate
information about your income and costs (eg your wage and any other income, food, meal costs,
rent, transport, education costs, insurance etc)
You will need to do some research to get accurate information including income and expenditure for
previous time periods, and access documents such as invoices, bills etc
2. Prepare a draft of your budget including all income and all outgoings. Use suitable software to do
this.
3. You now need to consult on your draft budget. You can show the draft budget either to friends or
to colleagues, or you can show it to your trainer/assessor. The purpose is to seek feedback to
ensure you have a realistic budget and have included all relevant factors. You may arrange to do
this during class time or during one of the breaks.
4. Take into consideration any suggestions from your trainer or colleagues and finalise the budget.
5. Identify any internal and external factors that you think may have an impact on your budget and
make a list of them.
6. Monitor your budget (at least once during the 5 weeks of your course and again at the end) and
assess actual performance against your estimated performance
7. Prepare an accurate budget report showing variations between your budget estimates and actual
data. Use standard report format.
8. Write a brief report identifying possible causes for variations (if any). Suggest options for improved
performance in staying within your budgets next time.
Submit your budget together with your report to your trainer/assessor on the due date.
Assignment 2 - ANSWERS
Questions: 1,2,3,4
Week 1 Week 2 Week 3 Week 4 Week 5 Week 1 -5
Income: 1,0
Home Remittance 1,000 - - - - 00
Employment Income 500 500 500 500 2,5
00
500
Total Income 5 5 3,5
00 00 00
1 ,500 500 500
Expenses:
House rent 5 week 3
350 50
Food expenses for 5 week 100 100 100 100 5
00
100
Public transport expense 30 30
60
Car petrol and services 120 120 120 120 6
00
120
Vehicle registration 300 3
00
Movie tickets 16 16
32
House bills 200 100 300 100 8
00
100
Online shopping 89
89
Total Expenses 4 5 3 2,7
66 66 20 31
709 670
Net Total 1,034 7
69
(209) (66) (170) 180
5. Internal & External factors impacting the budget:
Internal
Unforeseeable personal financial commitments
Medical urgency including days off from work for medical reasons
Delay in home remittance
Decision to not driver and take bus and vice versa
Change in employment income including variable compensation
External
Car repairs and/or maintenance
Delay in employment income payments from employer
Traffic ticket or violation
Marketing condition effecting employment
Change in petrol prices
6, 7 Budget monitoring with Variance

Income: Budget Actual Variance Budget Actual Variance Budget Actual Variance Budget Actual Variance Budget Actual Variance Budget Actual Variance
Home Remittance 1,000 - 1,000 1,000 (1,000) - - - 1,000 1,000 -
Employment Income 500 450 50 500 500 - 500 500 - 500 500 - 500 450 50 2,500 2,400 100
Total Income Expenses: 1,500 450 1,050 500 1,500 (1,000) 500 500 - 500 500 - 500 450 50 3,500 3,400 100
House rent 5 week - - - - - - - 350 350 - - 350 350 -
Food expenses for 5 week 100 90 10 100 80 20 100 150 (50) 100 90 10 100 110 (10) 500 520 (20)
Public transport expense 30 - 30 15 (15) 30 - 30 15 (15) 15 (15) 60 45 15
Car petrol and services 120 140 (20) 120 100 20 120 140 (20) 120 90 30 120 130 (10) 600 600 -
Vehicle registration - 300 300 - - - - 300 300 -
Vehicle maintenance 380 - 380 (380)
Movie tickets 16 - 16 16 (16) 16 16 - 16 (16) 16 (16) 32 64 (32)
House bills 200 50 150 100 350 (250) 300 100 200 100 - 100 100 - 100 800 500 300
Online shopping - 89 150 (61) - - - 89 150 (61)
Total Expenses 466 280 186 709 1,011 (302) 566 406 160 670 561 109 320 651 49 2,731 2,909 (178)
Net Total 1,034 170 864 (209) 489 (698) (66) 94 (160) (170) (61) (109) 180 (201) 1 769 491 278
8. Possible cause of variation

- My decision to drive car instead of taking bus during the first week resulted in no expense for public transportation, but it costed me more for patrol- Due to surplus budget during week one I decided to delay my remittance to
second week
- Decision to take a day off from work resulted in lower employment income
- Decision to take public transport during the second week changed my public transport budget
- Watching movie for during second week shifted the movie cost from first to second week
- Some overdue bills were paid during the second week which I had missed in my budget resulting in substantially higher spending for house bills
- Driving car instead of public transport during week 3
- During week 5 I had to get maintenance done on my car which I didn't budget for, resulting in excess cash outflow. On the other hand, the house bills were substantially low which, some of them, were paidearlier during week
2
=- Overall the income side was close to what I had predicted due to predictable inflows and few lines items however costs under some of the outflows had higher variations.
Assessment Two: Assignment - Marking Guide
SITXFIN002 Manage finances within a budget SITXFIN004

Units of Competence
Develop and monitor budgets
Student Name
Student ID
Assessor Name
Date of assessment
Assessment Assignment
Did the student: Yes No Comments
Access and interpret the data and data

sources they required for the budget
preparation?
Analyse any internal and external factors
for potential impact on the budget?
Draft the budget, based on analysis of
all the available information and
estimating income and expenditure?

Support the budget with valid, reliable and
relevant information, including income
and expenditure for previous time
periods?
Circulate the draft budget to appropriate
individuals for comment and to confirm
the scope and nature of their budgetary
planning activity?
Incorporate all financial commitments
promptly and accurately into budget and
all budget reports?
Monitor financial activities against the
budget?
Complete a financial and statistical report
on their budget and any variances?
Identify and evaluate options for improved
future performance
The student’s
ove performancerall  Satisfactory  Not Satisfactory
is:
Is re-assessment  Yes  No
necessary?
Assessor Date
signature
Student Date
signature
Assessment Three: Project

SITXFIN002 Work within a budget SITXFIN004 Prepare and
monitor budgets
Name:
Student Number:
Group:
Teacher:
For this you are to demonstrate our ability to prepare budgets through the preparation of budgets for
two scenarios.
There are two parts; you must complete them both.
Part A
You and your partner are the owners of Country Haven, an 80 room motel in a country town
which you purchased in 2006. You have the responsibility of preparing next year’s budget from
the following information:
• Annual occupancy: 70 percent

• Average room rate: $88
• Variable costs per room occupied:$8
• Annual fixed costs: $880,000
1. Prepare the Country Haven’s budget for next year. Assume a 365 day year. You must use a
conventional format for presenting the budget and should use suitable software.
2. The Country Haven has a restaurant which opens for breakfast, lunch and dinner for guests
and the public 7 days a week. Breakfasts are busy but lunches are very quiet. Dinners are busy on
Fridays and Saturdays but quiet for the rest of the week, especially on Mondays. During the week
there are 2 permanent staff in the kitchen and two on the floor. At weekends there are 4 in the kitchen
(including 2 extra casual staff) and 4 on the floor (including 2 casuals). The restaurant is running at a
loss, food costs are increasing and you and your partner decided you need to make some savings in
the operating budgets. Your partner, who looks after the catering area, developed the operating
budget for the restaurant.
Your partner showed the budget to the chef who complained angrily to him that the kitchen budget
allocated for next year was unfeasible and he could not possibly take any cuts. He said that the
restaurant budget was too high and should be cut instead. He insisted that the consumables budget
must be maintained. Your partner considered his protest and the following offer was made to him: cut
the consumables budget or save the required amount from the wages component. The amount
needed to be saved is the equivalent to a full time wage or two casual staff.
a) How could the chef have acted differently?
b) Was your partner unreasonable? It is always as black and white in budget situations?
c) What could be done rather than cutting expenditure?
Part B
You have also purchased a small café, Cozy Café nearby, which caters mainly for local town people
selling light eat-in and takeaway meals. Cozy Cafe started in January 2009. In December 2009 the
following information was collected:
2009: The cafe sold 54,600 meals, and the average price per meal was $10.50, resulting in $573,300
of sales revenue. They also sold 20,000 coffees. Coffees are sold for $2.50 and the cost price is
$1.10.
You estimate that for the next year the price per average meal could be increased to an average of
$13.00 and have also predicted that sales (in units) will increase by 10% in 2010. Coffee selling
prices will remain the same for the next year in order to stimulate an increase of sales by 20% for
the next year. You and your partner have anticipated the following expenses for 2010:
Anticipated expenses for 2010
$75,000
Cost of goods sold
Rent $78,000
Wages $60,000
Other Expenses $50,000
1. Based on the above information, prepare the following budgets for Cozy Café:
• the 2010 sales budget
• operating expenses budget
• profit and loss budget
You should make up any details for budget items you require.
You must use conventional formats for presenting the budgets and use suitable software.
2. What are some internal and external factors that might affect the annual and operational budgets
of the restaurant and the café?
Assignment 3
Part A- 1. Budget for Year 2007
Income $ 1,798,720.00 = 80 * 70% * 88 * 365
Expenditures:
Variable Cost $ 163,520.00 = 80 * 70% * 88 * 8 * 365
Annual Fixed cost $ 880,000.00
Total Expenditures $ 1,043,520.00 Net Income $
755,200.00
Part A - 2.a
The chef's could have looked internally to assess the possibility of optimizing the staff shifts to reduce
or manage cost as explained in 2.c. Other factors such as consumable wastage could be looked into as
well for opportunities. Revisiting the menu option while ensuring the quality can also be considered.
Part A - 2.b
The partner's response was not logical as the consumables could not be reduced due to higher prices.
On top of that, due to uncontrollable factor (consumable prices) partner is shifting the onus on the the
chef to save up the amount. In this case the increase price should be considered in the budget
however, consumable wastages may play the part in higher overall consumables
Part A - 2.c
Since of the price of food is generally increasing it seems reasonable to at least maintain the consumable
budget instead of cutting it. Dinner is not busy from Sunday to Thursday and lunch are generally slow as
well.
Therefore, the restaurant should budget for at least 2 part time staff in the morning during busy time.
Two-part time staff from Sunday to Thursday should save up the amount equivalent to one full time wage.
Alternatively, although Sunday is weekend only the mornings are bust therefore it's reasonable to not have 4
casual staff (2 in kitchen and 2 on the floor). This day is no different from Monday were only regular staff is
needed for operation.
$ $ $
780,780.00 60,000.00 840,780.00
Unit Cost Quantity Total

Part B - 1
Sales Budget - 2010
Meal Coffee
Quantitiy
60,060 24,000
Price $ $
13.00 2.50
Total Sales
Operating Expenses Budget

COGS - Meal $ $ 48,600.00
0.81 60,060
COGS - Coffee $ $ 26,400.00
1.10 24,000
Rent $ 78,000.00
Wages $ 60,000.00
Other expenes $ 50,000.00
$ 840,780.00 $ 263,000.00
$ 75,000.00
$ 78,000.00
Profit & Loss Budget $ 60,000.00
$ 50,000.00
$ 577,780.00
Total Sales
COGS
Rent
Wages
Other Expenses
Part B - 2
Internal Factors
Wastage of raw materials could result in higher cost of sales
Productivity and quality of staff could impact both the price and demand
Decision to hire additional staff than expected as per budget
Composition of average sale price for meal may differ in 2010
Staff demand higher salary
Changes in restaurant open times
External Factors
Change in rent due to unforeseen circumstances
New restaurant in the area could impact the sales figures
Negative review by customer or food inspector
Staff demand higher salary
Increase in raw material prices or inflation
Change in the price by competitor
Assessment Three: Project -

Marking Guide
Units of Competence SITXFIN002 Manage finances within a budget

SITXFIN004 Develop and monitor budgets
Student Name
Student ID
Assessor Name
Date of assessment
Assessment Project
Did the student demonstrate: Yes No Comments
Parts A and B
Access and interpret the data and data
sources they required for the budget
preparation?
Analyse any internal and external factors
for potential impact on the budget?
Draft the budget, based on analysis of all

the available information and estimating
income and expenditure?
Support the budget with valid, reliable and
relevant information, including income
and expenditure for previous time
periods?
Circulate the draft budget to appropriate
individuals for comment and to confirm
the scope and nature of their budgetary
planning activity?
Reflect organisation objectives
appropriately within the budgets?
Present budgets and information clearly,

concisely and in an appropriate format?
Use appropriate software for preparing

the budgets?
Demonstrate knowledge of budgeting

including:
• role and nature of the budget
development process within different
businesses and contexts?
• accounting terminology, principles and
practices relevant to budget
preparation in any context and for
FM2 - SITXFIN002, SITHXFIN003, SITXFIN004 - CC Block F/ Hosp Dip Block A - Student Guide - Reviewed Jan 2018
Page 27
different types of budgets?

• information required for budget
preparation?
• components of a budget and a budget
performance report?
• techniques for making budget
estimates?
• use of software for preparing and
monitoring budgets
• how to present budgets and budget
reports?
• budget deviation management,
including common reasons for
deviations?
The student’s overall

 Satisfactory  Not Satisfactory
performance is:
Is re-assessment  Yes  No
necessary?
Date
Assessor
signature
Date
Student
signature
Assessment Four: Written Test
Part A
Duration: 1.5 hours
Name:
Page 28
Student Number:
Group:
Teacher:
Instructions:
1. You may use a calculator (not your mobile phone)

2. Complete all questions as directed.
3. You must not talk at any time, including when you are leaving the room.
4. Copying and cheating will incur a FAIL immediately
5. You must have your mobile phone switched off for the duration of the
test.
This test has four (4) sections. You must complete them all.
Assessment Four Part A: Written

Test - Results Sheet
Student name
Student ID
Assessor name
Unit of Competency SITXFIN002 Interpret financial information
Assessment Written Test Part A
Section One: Multiple Choice:
Q1 Q3 Q3 Q4 Q5
Section Two: Fill in blanks:
Page 29
Q1 Q3 Q3 Q4 Q5
Q6 Q7 Q8 Q9 Q10
Section Three: True/False:
Q1 Q3 Q3 Q4 Q5
Q6 Q7 Q8 Q9 Q10
Section Four: Short Answer Questions:

Response
Overall student
Comments
performance
S S
Q1
Q2
Q3
Q4
Q5
Q6
Q7
Q8
Q9
Q10
Q11
Q12
Q13
Q14
Q15
Q16
Q17
Q18
The student’sge overall was Satisfactory Not satisfactory
knowled
 
Page 30
Feedback:
Assessor’s signature
Student’s signature
Date of assessment
Assessment Four: Written Test Part

B
SITXFIN003 Work within a budget
SITXFIN004 Prepare and monitor
budgets
Name:
Student Number:
Group:
Teacher:
Page 31
There are 12 questions. You must answer them all.

Duration: 1 hour and a half
Assessment Four: Written Test Part

B- Results Sheet
Student name
Student ID
Assessor name
SITXFIN003 Work within a budget
Unit of Competency
SITXFIN004 Prepare and monitor budgets
Assessment Written Test Part B
Overall student Response
performance Comments
S NS
Part B Short Answer Questions
Q1
Q2
Q3
Q4
Q5
Q6
Q7
Q8
Q9
Q10
Q11
Q12
The student’s knowledge overall was Satisfactory Not satisfactory
 
Page 32
Feedback:
Assessor’s signature
Student’s signature
Date of assessment
Page 33
Final Assessment Summary &

Feedback
Student ID
Student Name
Date of
Assessor Name
Completion:
Module: Diploma of Hospitality SIT50313
Unit of SITXFIN002 Interpret financial information

Competency:
Student Results
Not
Assessments Satisfactor Not
Satisfactor
y Completed
y
One: Case Studies
  
Two: Practical Demonstration 1
  
Four: Written Test - Part A
  
Feed back to student:
 Competent  Not Yet Competent

Result:
Is Re-Assessment Required:  Yes  No
Assessor’s Signature Printed Name Date
Student’s Signature Printed Name Date
Page 34

Feedback
Student
Student ID
Name
Date of
Assessor Name
Completion:
Unit of SITXFIN003 Work within a budget

Competency:
Student Results
Not
Satisfactor
y Completed
y
Two: Assignment
  
Three: Project
  
Three: Written Test Part B
  

Result:
Page 35

Feedback
Student
Student ID
Name
Date of
Assessor Name
Completion:
Unit of SITXFIN004 Prepare and monitor budgets

Competency:
Student Results
Not
Satisfactor
y Completed
y
Two: Assignment
  
Three: Project
  
Three: Written Test Part B
  

Result:
Page 36

Student Guide: Financial Management Block 2

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Student Guide: Financial Management Block 2

Uploaded by

Copyright:

Available Formats

SIT40516 Certificate IV in Commercial Cookery Block F

SIT50416 Diploma in Hospitality Block A

SITXFIN002 Interpret financial information

 Access and interpret financial information

 Use and provide financial information.

 Allocate budget resources

 Monitor financial activities against a budget

 Identify and evaluate options for improved budget performance

 Complete financial and statistical reports

 Prepare budget information

 Monitor and review budget

This module covers three units of competency.

The module is comprised of the following units of competency:

SITXFIN002 Interpret financial information SITXFIN003 Manages Finance within a budget

SITXFIN002 Interpret financial information

You are required to demonstrate skills in:

You are also required to demonstrate knowledge of:

• key elements of financial record keeping and key terminology, including:

SITXFIN003 Manages Finance within a budget

You are required to demonstrate skills in:

You are also required to demonstrate knowledge of:

o use of budgets to control costs and enhance profitability o importance of

SITXFIN004 Prepare and Monitor Budgets

You are required to demonstrate skills in:

There are four assessments for this module.

Week Case Studies Assignment Project Written Test

Assessment One: Case Studies

Teacher use only: Result Satisfactory/Not Satisfactory

Case Study One

Food and Beverage Department

• Breakfast revenue solely from hotel guests

• 70% of overnight guests eat breakfast

• Average breakfast spend per person $12.50

• Lunchtime seat turnover is 1.5

• Average lunch-time spend $17.50

• Dinner seat turnover is 2

• Average dinner spend $26.50

• Beverage revenue 50% food revenue (total)

• Food costs: 30% of food sales

• Beverage costs: 25% of beverage sales

• Labour costs: 35% of total F&B sales

• Overhead costs: 25% of total F&B sales

• Expected annual indirect costs next year: $300,000 (same as 2007/8)

• Fixed costs $342,000 per annum

Profit & Loss Statement

Sales Revenue 1,571,545

Gross Profit Margin 1,139,370

Labour Cost 550,041 35% of sales revenue

Overhead Cost 392,886 25% of sales revenue

Fixed Cost 342,000 Actual amount

NET PROFIT/LOSS (445,557) (1,584,927- 1,139,370)

Case Study Two

The Sunshine Fire

Sunshine Pty Ltd

Cash at Bank 198 Accounts Payable 578

Income Statement for Sunshine Pty Ltd

Net Profit (Loss) 70

g) Yes, Sunshine Pty should definately move to an automated accounting system.

Case Study Three

Case Study Four

Catering on the Run Ltd

Catering on the R un Ltd

Comparative Balance Sheet