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School/Centre BITC SCHOOL OF HIGHER EDUCATION

Course Name Postgraduate Diploma in Hospitality ( cafe Management )
Module Name Finance for Managers
Issue date 03.01.2023 Final submission date 20.01.2023

Student Number BITC0476/22 Attempt 1st Attempt / 1st Resit / 2nd Resit

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Table of Contents:                                     
Page no

1-Introduction

2-Task 1 financial Accounting

3-Question A diffrence between financial and management accounting

4- Question B 10 financial ratios

5-Task 2 management accounting

6-    Question A 6 types of financial institutions

7- Question B importance of budgeting for an organisation

8-Task 3 Personal Financial Planning

9-Question A 4 micro and macro factors affect personal financial planning

10- Question B personal comprenhsive

11-Conclusion

12-References

Introduction

In this assignment we will discuss about diffrence between financial and mangement accounting
an what is purpose and importance of financial ratios in task 1. In task 2 we will discuss about
the roles of 6 types of financial institutions and with this we will also discuss about the
importance of budgeting for an organisation. in task 3 we will do an evaluation of 4 micro and
macro factors which will affect personal financing planning and we will prepare a personal
comprehnsive for 1 year budget which will be helpful for tracking our income and expenses and
at the end of the yearit will be helpful to have some saving .

Task 1

a. diffrence between financial and management accounting .

Financial Accounting

objects The main objects of fiscal account are to expose the end results of the business, and the
fiscal condition of the business on a particular date.

followership fiscal account produces information that's used by external parties, similar as
shareholders and lenders.

voluntary It's fairly needed to prepare fiscal account reports and partake them with investors.

Member reporting Pertains to the entire association. Certain numbers may be broken out for
materially significant business units.

Focus Financial account focuses on history; reports on the previous quarter or time.

Format Financial accounts are reported in a specific format, so that different associations can be
fluently compared.

Rules Rules in fiscal account are specified by norms similar as GAAP or IFRS. There are legal
conditions for companies to follow fiscal account norms.

Reporting frequence and duration Defined- annually,semi-annually, daily, monthly.

Information Monetary, empirical information.

operation account

objects The main ideal of directorial account is to help operation by furnishing information
that's used to plan, set pretensions and estimate these pretensions.

followership directorial account produces information that's used within an association, by

directors and workers.

voluntary directorial account reports aren't fairly needed.

Member reporting Pertains to individual departments in addition to the entire association

Focus directorial account focuses on the present and vaticinations for the future.

Format Format is informal and is on a per department/ company base as demanded.

Rules directorial account reports are only used internally within the association; so they aren't
subject to the legal conditions that fiscal accounts are.

Reporting frequence and duration As demanded- diurnal, daily, yearly.

Information Monetary and company thing driven information.

introductory functions of Financial Accounting

Methodical Record of Deals Big pots and large- sized enterprises have a large number of deals
taking place regularly, and flashing back all these deals isn't possible, which is why fiscal account
enables a methodical record of deals chronologically through a journal, tally and other books of
accounts.

Analysing Deals The platoon involved in preparing colorful fiscal statements and books of
accounts should assay the deals as and when they do and summarise and check whether the
deals aretrue.However, the sale will be recorded to assay the profit or loss of the company, and
also prepare a trial balance and ultimately summarise it in the form of a balance distance, If it's
authentic.

introductory Functions of operation Account

soothsaying Cash Flow Management account allows to prognosticate or read the cash inflow of
a business. operation can take independent opinions for the benefit of the establishment and
can state different programs or corrective measures through which the operation can increase
the business's cash inflow.

vaticinating the Company’s Future Management account helps prognosticate or read a

company's future and where it'll stand if it follows the same strategies. The establishment will
be suitable to prognosticate the social, profitable, political and technological changes passing in
the assiduity or the business terrain.

Analyses Return on Investments Management account helps, through the information gathered
in the form of data, how important they will get in return for their investments. It helps in
analysing return in terms of plutocrat, character, growth and share in the request to their
investments through the help of operation account.

10 financial ratios.

Quick rate

A quick rate shows that a establishment can meet its fiscal scores and pay off its arrears indeed
in the case of an unexpected situation. This rate indicates the extent to which a company has
quick means to pay off its current arrears. Advanced the rate, Advanced the solvency position of
the company and lower the threat of being void.

Quick rate = ( Current means, Loans & Advances – Current force-Repaid Charges)/ Current
arrears & vittles – Bank Overdrafts
Current rate

Current rate shows a company’s present fiscal strength. It's analogous to the Quick rate, and this
is also used to determine the short- term solvency of a company. A good current rate indicates a
strong short- term solvency position of the company. This is also occasionally appertained to as
working capital rate.

Current rate = ( Total Current means, Loans & Advances) Total Current arrears & arrears

force development rate

force development rate shows how constantly a company converts force into deals. This rate
reveals the force holding period. The shorter the holding period, Faster is the conversion of
force into deals indicating better effectiveness.

force Development rate = Cost of Goods vended/ Average supplies

ROI( Return on Investment)

ROI principally compares the quantum you invest in your business to how important plutocrat
you make from that investment. This rate measures the profitability of your business. Advanced
the ROI rate, advanced the profit your business will make. Investors also check this rate as a
primary index before investing plutocrat in any business.

ROI = ( Earnings – original Cost of Investment)/ original Cost of Investment

Return on Capital Employed (ROCE)

This rate indicates the return by the company on its aggregate on investment. It's the ultimate
measure of the company’s overall performance and productivity of capital employed, this rate
when compared with assiduity normal gives an suggestion about the fiscal performance of the
company. ROCE is a veritably useful rate in analysing capital- ferocious companies in telecom/
oil painting and gas/ heavy diligenceetc.

ROCE = Profit before interest and levies/ Total Capital employed

Return on Equity( ROE)

This rate indicates the income earned by equity shareholders. High rate means high tip, better
prospects and high valuation in the capital request.

Equity shareholder finances = Equity Share Capital Reserves and supernumerary/-Prolonged Tax
means or arrears
ROE = ( Profit after duty- Preference tip/ Total capital employed) * 100

Earnings per Share( EPS)

This rate shows the earnings made on each share of a company. It's one the important
measures of profitability for the judges or investors. This rate is the main consideration for
valuation of companies in case of combinations, etc. Advanced rate shows that the company is
in a positive light. Advanced rate indicates advancedreturns.Earnings per share( EPS) measures
the net income earned on each share of a company’s stock.

EPS = Profit after duty- Preference tip/ Number of equity shares

Debt- Equity rate( DER)

This rate indicates whether the company is counting on its own finances or espoused finances.
The debt- equity rate shows a establishment’s total long- term debt as a chance of its
proprietor’s totalequity.Higher the debt, further fixed arrears by way of interest and further
fiscal threat for the company. This rate also indicates whether the company has an optimal
capital structure to ameliorate the returns available to equity shareholders.

Debt equity rate = Long- term debt/ Equity

Debtor Development rate

This rate shows the effectiveness with which debtors are converted into cash. The advanced the
rate, the lesser the speed with which debtors are converted into cash. This rate can also be
expressed in terms of the number of days.

Debtor Development rate = Net Deals/ Average Debtors

Cash rate

This rate is to the working capital rate but while calculating this rate only cash and cash coequals
are taken into consideration. Cash fellow refers to the total value of cash in hand that includes
particulars that are analogous to cash or investments which develop within 90 days. Treasury
bills, Treasury notes, marketable paper are some exemplifications of cash coequals.

Cash rate = Cash and cash coequals Current arrears

Task 2 Management Accounting

a. 6 types of financial institutions

1. Banking Services
fiscal institutions, like marketable bankshelp their guests by furnishing savings and deposit
services. In addition, they offer credit installations like overdraft installations to the guests to
feed to the need for short- term finances. marketable banks also extend loans like particular
loans, education loans, mortgages, or home loans to their guests.

2. Insurance Services

fiscal institutions, like insurance companies, help to rally savings and investment in productive
conditioning. In return, they assure investors against their life or some particular asset at the
time of need. In other words, they transfer their client’s threat of loss to themselves.

3. Capital conformation

fiscal institutions help in capital conformation, i.e., increase in capital stock like the factory,
ministry, tools and outfit, structures, transport, communication, etc. also, they rally the idle
savings from individualities in the frugality to the investor through colorful financial services.

4. Capital conformation

fiscal institutions help in capital conformation, i.e., increase in capital stock like the factory,
ministry, tools and outfit, structures, transport, communication, etc. also, they rally the idle
savings from individualities in the frugality to the investor through colorful financial services.

5. Pension Fund Services

Through their colorful kinds of investment plans, fiscal institutions help individualities plan their
withdrawal. One similar investment option is a pensionfund.The individual contributes to the
investment pool by employers, banks, or other associations and gets the lump sum or yearly
income after withdrawal.

6. Backing the Small and Medium Scale Enterprises

fiscal institutions help small and medium- scale enterprises set up themselves in their original
business days. They give long- term as well as short- term finances to these companies. The
long- term fund helps them form capital, and short- term finances fulfill their day- to- day
working capital requirements.

b.significance of budgetion for an organsiation

1. It Ensures Resource Vacuity

At its core, budgeting’s primary function is to insure an association has enough coffers to meet
its pretensions. By planning financials in advance, you can determine which brigades and
enterprise bear further coffers and areas where you can cutback.However, for case, your
platoon needs to hire an fresh hand to gauge sweats, If.

2. It Can Help Set and Report on Internal Goals

Budgeting for an forthcoming period is n’t just about allocating spend; it’s also about
determining how important profit is demanded to reach companygoals.You can use budgeting
to set company-wide and platoon fiscal pretensions that align with them. This is especially
prominent when using exertion- grounded budgeting, but it’s salutary no matter which class
youuse.Financial pretensions should be attainable enough that you count on them to inform the
rest of your budget allocations. Your pretensions inform the charges demanded to reach them
and vice versa.

3. It Helps Prioritize systems

A derivate of the budgeting process is that it requires prioritizing systems and enterprise. When
prioritizing, consider the implicit return on investment for each design, how each aligns with
your company’s values, and the extent they could impact broader fiscalgoals.The value
proposition budgeting system forces you to determine and explain each line item's value to your
association, which can be useful for prioritizing tasks and larger enterprise.

4. It Can Lead to Financing Opportunities

still, it’s important to have proved popular information, If you work at a incipiency or are
considering seeking outside investors. When deciding whether to fund a company, investors
largely value its current, once, and prognosticated fiscalperformance.Providing documents for
former ages with calculated and factual spend can show your capability to handle a company’s
finances, allocate finances, and pivot when applicable. Some investors may ask for your current
budget to see your prognosticated performance and precedences grounded on it..

Task 3. personal Financial planning

a. 4 micro and macro factors affect personal financial planning

Micro Factors

1.Family Structure

connubial status and dependents, similar as children, parents, or siblings, determine whether
you're planning only for yourself or for others aswell.However, you have a fiscal responsibility to
someone differently, and that includes a responsibility to include them in your fiscal thinking, If
you have a partner or dependents. You may anticipate the dependence of a family member to
end at some point, as with children or senior parents, or you may have lifelong liabilities to and
for another person.

2. Health

Your health is another defining circumstance that will affect your anticipated income
requirements and threat forbearance and therefore your particular fiscal planning. particular
fiscal planning should include some protection against the threat of habitual illness, accident, or
long- term disability and some provision for short- term events, similar as gestation
andbirth.However, your income needs may increase, If your health limits your earnings or
capability to work or adds significantly to your expenditures.

Career Choice

Your career choices affect your fiscal planning, especially through educational conditions,
income eventuality, and characteristics of the occupation or profession you choose. Careers
have different hours, pay, benefits, threat factors, and patterns of advancement over time.
therefore, your fiscal planning will reflect the realities of being a postal worker, professional
athlete, commissioned deals representative, commercial counsel, freelance shooter, librarian,
erecting contractor, duty preparer, professor, Web point developer, and so on.

Age

requirements, solicitations, values, and precedences all change over a continuance, and fiscal
enterprises change consequently. immaculately, particular finance is a process of operation and
planning that anticipates or keeps abreast with changes. Although everyone is different, some
fiscal enterprises are common to or typical of the different stages of adult life. Analysis of life
stages is part of fiscal planning.

macro factors

Business Cycles

An frugality tends to be productive enough to give for the wants of its members. typically,
profitable affair increases as population increases or as people’s prospects grow. An frugality’s
affair or productivity is measured by its gross domestic product or GDP, the value of what's
produced in a period. When the GDP is adding , the frugality is in an expansion, and when it's
dwindling, the frugality is in a compression.

Employment Rate

An frugality produces not just goods and services to satisfy its members but also jobs, because
utmost people share in the request frugality by trading their labor, and utmost calculate on
stipend as their primary source of income. The frugality thus must give occasion to earn stipend
so more people can share in the frugality through the request. else, further people must be
handed for in some other way, similar as a private or public subvention charity or weal.

Other pointers of Economic Health

Other profitable pointers give us suggestions as to how “ successful ” our frugality is, how well
it's growing, or how well deposited it's for unborn growth. These pointers include statistics,
similar as the number of houses being erected or being home deals, orders for durable
goods(e.g., appliances and motorcars), consumer confidence, patron prices, and so on.

Currency Value

Stable currency value is another important index of a healthy frugality and a critical element in
fiscal planning. Like anything differently, the value of a currency is grounded on its utility. We
use currency as a medium of exchange, so the value of a currency is grounded on how it can be
used in trade, which in turn is grounded on what's produced in the frugality.

b.particular comprehnsive

Step 1 Calculate your net income

The foundation of an effective budget is your net income. That’s your take- home pay — total
stipend or payment minus deductions for levies and employer- handed programs similar as
withdrawal plans and health insurance. fastening on your total payment rather of net income
could lead to overspending because you ’ll suppose you have more available plutocrat than you
do.

Step 2 Track your spending

Once you know how important plutocrat you have coming in, the coming step is to figure out
where it’s going. Tracking and grading your charges can help you determine what you're
spending the utmost plutocrat on and where it might be easiest to save.

Step 3 Set realistic pretensions

Before you start sifting through the information you ’ve tracked, make a list of your short- and
long- term fiscal pretensions. Short- term pretensions should take around one to three times to
achieve and might include effects like setting up an exigency fund or paying down credit card
debt.

Step 4 Make a plan

This is where everything comes together What you ’re actually spendingvs. what you want to
spend. Use the variable and fixed charges you collected to get a sense of what you ’ll spend in
the coming months. also compare that to your net income and precedences. Consider setting
specific — and realistic — spending limits for each order of charges.

Step 5: Adjust your spending to stay on budget

Now that you ’ve proved your income and spending, you can make any necessary adaptations
so that you do n’t overspend and have plutocrat to put toward your pretensions. Look toward
your “ wants ” as the first area for cuts. Can you skip movie night in favor of a movie at home? If
you ’ve formerly acclimated your spending on wants, take a near look at your spending on
yearly payments.

Step 6: Review your budget regularly

formerly your budget is set, it’s important to review it and your spending on a regular base to be
sure you're staying on track. Many rudiments of your budget are set in gravestone You may get a
rise, your charges may change or you may reach a thing and want to plan for a new bone .
Whatever the reason, get into the habit of regularly checking in with your budget following the
way over.

jan feb mar april may june july aug sep oct
rent 400 400 400 400 400 400 400 400 400 400
transport 100 100 100 100 100 100 100 100 100 100
fees 400 400 400 400 400 400 400 400 400 400
food 200 200 200 200 200 200 200 200 200 200
entertainmen
t 30 40 20 30 50 30 10 50 46 58
phone bill 20 20 20 20 20 20 20 20 20 20
light bill 600 500 400 400 500 300 500 400 200 300
total 1750 1660 1540 1550 1670 1450 1630 1570 1366 1478
income 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000
commission 500 500 500 500 500 500 500 500 500 500
total 3500 3500 3500 3500 3500 3500 3500 3500 3500 3500
saving 1750 1840 1960 1950 1830 2050 1870 1930 2134 2022

Conclusion

In conclusion, finance director is pivotal labor force in a establishment in regard to

capitalbudgeting opinions, capital structure and working capital operation opinions. Heoffers
advice to the top operation regarding what investments to venture by and theirexpected
returns. also, the 411 the operation on the stylish backing structuresand their appropriation so
as to insure that there's fat creations as well as costminimizations. He or she plays a crucial part
in the working capital opinions throughensuring that the establishment is suitable to manage
cash and force and meet short termobligations and forthcoming charges.