Liberty Restaurant Group

BSBFIM601
MANAGE FINANCES

NAME:
 NOTE: Assessment 1 answers to be provided in the tool. Sign the entire tool
wherever your name and id has been requested sincerely

Assessment would be incomplete without excels sheet with calculations and

without PowerPoint presentation and won’t be assessed.

Do not write your answers in bold.

 ASSESSMENT 2

PART 1

a. Calculate the Operating Expense Ratio (rounded to 2 decimals) for both

restaurants for the previous two years. Then, comment on the following:

i. Identify (and show the calculation) of the Y-1 and Y-2

Operating Expense Ratios for both Melbourne and Cairns in
the following table:
Operating Expenses ratio year 1=Operating expenses/revenue

= 839000/1020000

= 82.25%

Operating Year ratio Year 2= Operating expenses/revenue

= 936800/1080000

=86.74%

Cairns

Operating Expenses ratio year 1 = operating expenses /revenue

= 370116/309200

= 11.97%

Operating year ratio 2= Operating expenses /revenue

= 457000/420000

= 10.88%

Operating Expense Operating Expense

Ratio Ratio
(Year Y-1) (Year Y-2)
82.25 86.74
Melbourn
e
11.97 10.88
Cairns
 ii. What is the trend of the ratio for restaurant? Has it improved?
A restaurant procedures accomplishment in numerous habits: In kudos from clienteles, appraisals from native
media besides return appointments from happy consumers. But if the commercial is successful to last, it
requirements some compacted figures. There are at least seven important relatives that can be castoff to
quantity the continuous costs and incomes of a restaurant commercial. Custody pathway of them and by
means of them to make alterations to the industry can help the proprietor or stockholder support the level of
effectiveness the commercial needs to embellishment. In the restaurant industry, major costs comprise the
expenditures for food, beverages, organization, hourly work, and remunerations.

III) Interpret the ratio for each restaurant from a profit/loss perspective.
The business requirements a sequence of relations and the consistent statistics for other companies in the similar
manufacturing to be able to brand valuable assessments. You necessity also be unquestionable which income has
been castoff to calculate the relations. Remember, a stable might well brand a gross profit, but this might become a
loss when the rate is distorted to interchange profit. It is also valuable to have the attention rate to hand, as this puts
charges of income into viewpoint. Cost-effectiveness relations are indications, so developments in themselves unkind
little.

d. Research how sales and expense growth rates impact profits of a business.
Then, calculate the growth rates of Total Sales and Total Operating Expenses
for both restaurants, and comment on how they have affected the Net
Profit/Loss Before Tax in Year Y-2. Organise your analysis in the following
table:
Melbourne

total sales growth

=Final value -initial value /initial value
=89900-45500/20000

=20.22 %

Total operating expenses

Operating Expense = Advertising Expense + Salaries + Rent + Utilities

=12000+234600+48000+12000

=30600

Cairns

Total sales growth

= 60916-27800/27800

11.91%

Total operating expenses

=12000+71116+48000+12000

=143116
 Growth Rate Comments
(Year Y-2) over (Year
Y-1)
20.22 %

Total Sales
30600
Melbour Total Operating
ne Expenses
11.91%

Total Sales
143116
Cairns Total Operating
Expenses

Investigation and expansion expenses, publicity expenses, and strength development, as a substitution for plant and
tools expenses, can understandably be predictable to control sales and revenue development in comparable ways in
dissimilar vicinities. If transactions and income growth disturb effectiveness and marketplace value actions in
simulated besides definite surroundings, the inspiration variables might have an unintended as well as a direct
influence on effectiveness and marketplace value. Income development has the greatest considerable influence on
effectiveness and market value in the specialized willing while asset development is the greatest significant mutable
touching monetary performance in the decision-making game. Sales development is the greatest considerable
development adjustable moving financial presentation in the actual businesses.

e. Research how Accounts Receivable and Payable affect cash flow, then
analyse the Operating Cash Flow for Melbourne and respond to the
following:

i. What is the Net Cash from Operations position for Melbourne

in Year Y-2? What are its implications? Has it improved from
Year Y-1?
Net cash is a number that is stated on a business's monetary reports. It is intended by withdrawing a
business's total accountabilities since its total cash. The net cash character is normally castoff when appraising
a corporation's cash flows.370116 I as the quantity which demonstrations that the restaurant is stirring in a
correct course as the restaurant is manufacture profit from it.

ii. How have the change in Accounts Receivable and Accounts

Payable during Year Y-2, affected the operating cash position for
Melbourne in Year Y-1?
 Alteration in Receivables is the upsurge or reduction in the cash that consumers owe the business. This is one
of the numerous conducts net incomes and cash flow fluctuates. Change in Receivables disturbs cash flow,
not net revenue.

iii. Identify two actions Pesto’s can take to improve its cash position.

Make an incline of those properties purchase that aren't touching at the similar pace as other goods. They stalemate
up a lot of cash and could offend the cash flow.

Cumulative your amounts are a perception that starts numerous corporate proprietors. They're apprehensive it wills
principal to condensed sales.

Part 2

Access and review the extract of the Business Plan in Appendix A, then
answer the following questions:

a. What were the financial goals planned for both restaurants for the
Current Year (Year Y3)?

Financial development stretches personalities the capability to break depressed their moneys and find zones where
expenditure can be censored to except currency. Once there is further cash in the reasonable, this money can be
protected for upcoming objectives or capitalized to assistance brand the currency produce quicker.

In the third year ,the restaurant little bit additional transactions as associated to new two years and the working
expenditures has also away tall and the its reproduce in the net income of the restaurant

b. Based on market research,

(i) what are the critical timelines for sales forecasts for each restaurant in
the Current Year?
The capability to precisely estimate auctions and expenditures is a essential ability for a executive or proprietor to
have. Manipulative the visitor checkered regular is rather humble as long as the appropriate archives are existence
kept. The checkered regular is just what it utters, the regular of what each boarder devotes. It is designed by isolating
the whole food and drink auctions by the total number of people in a specific time period.

(ii) Which four initiatives or objectives of Liberty Restaurant Group will

generate or require resources in the next financial cycle?

 Provide home entertaining projects and around 30 boarding games;

 Provide numerous fundraising activities for toys, washing powder, personal care products, etc. every
month, use contribution boxes at BK places;

 Contribute the City's billboard record to increase the association Visibility

 Recollect your advertising agencies and deliver free services to Haven House to support your rebranding
exertions: creation of new logos, novel websites, marketing activities public / media relations, broadcasting of
public service declarations and signs / collateral resources.
Part 3

Conduct due diligence and review the Accounts Receivable Ageing Summary for the

Melbourne Restaurant. Answer the following questions:

a. What is the overall balance of Accounts Receivable as at 30 th June (Y-2)?

$4910 is the account receivable account.

b. How much of this value should the restaurant be recovering immediately to

bring Accounts Receivable within compliance of the Credit Policy (see the
Business Plan)?

Fast admissions to this money take more than presenting novel procedures. It also necessitates the money and
transactions subdivisions to effort composed to progress imbursement relationships that create intelligence for both the
industry and its consumers. While there are no hard-and-fast guidelines for accomplishing this end-state, convinced best
performs do happen.

c. Answer the following questions based on your understanding of the extract of

Credit Policy given in Appendix A:

i. Which overdue invoices qualify for an email/letter from the account’s

manager, reminding the client to pay?
31 to 60 days past due invoices qualify for an email/letter from the accounts manager, reminding the client to pay.

Identify clients and invoice details in the table below, and calculate total

Clients Invoice date Amount

Pacific Events 09.04.(Y-1) $3,200

Raymond's Vineyards 15.04.(Y-1) $3,980

AB Seminars 23.04.(Y-1) $810

Viet Conference Rooms 14.05.(Y-1) $990

Total
amoun
t
$8989

Which overdue invoices qualify for a letter of demand from the accounts manager,
cautioning the client that recovery action will be initiated if outstanding invoices
are not paid immediately? 61 to 90 days invoices qualify for a letter of demand from the accounts manager,
cautioning the client that recovery action will be initiated if outstanding invoices are not paid immediately

Identify clients and invoice details in the table below, and calculate
total amount owing.

Clients Invoice date Amount

Raymond's Vineyards 12.03.(Y-1) $4,200

AB Seminars 19.03.(Y-1) $690

Viet Conference Rooms 17.04.(Y-1) $900

Total $5790

Which overdue invoices qualify for hand over to and external debt
iii.
recovery agency?
iv. 91+ days qualify for hand over to and external debt recovery.

Identify clients and invoice details in the table below, and calculate
total amount owing.
Clients Invoice data Amount

Raymond's Vineyards 14.01.(Y-1) $4,000

Viet Conference Rooms 16.01.(Y-1) $1,000

Pacific Events 21.01.(Y-1) $3,000

AB Seminars 24.01.(Y-1) $800

Raymond's Vineyards 05.02.(Y-1) $3,500

Viet Conference Rooms 05.02.(Y-1) $970

AB Seminars 11.02.(Y-1) $800

Raymond's Vineyards 14.03.(Y-1) $1,200

Total $15270

Part 4

a. Identify at least four current statutory tax compliance requirements of Liberty

Restaurant Group.

The service tax rate is 14%, but since restaurants deliver both properties and facilities, the Central Government delivers
a reduction of 60% on the service tax to be imposed by them. These earnings that the service tax imposed by a
restaurant originates down to 40% of the definite rate, which is 5.6%.
b. Identify at least six of the current compliance requirements and liabilities for
Liberty Restaurant Group under the Corporations Act 2001.

Employee Misclassification Issues

Exempt employees are exempted from the central overtime responsibilities set into view in the Fair Labor Standards Act
(FLSA). Such employees must not accept overtime when they effort over 40 hours in a workweek.

Child Labor Laws

Federal and state laws limit the sympathetic of effort minors might achieve, the amount of hours they might work, and
when the work can be achieved. The amount of permissible work hours be contingent upon the youth’s age and
whether university is in sitting or not. In particular, restaurants employing youths should prudently deliberate studying
their groundwork performs and should instrument suitable protections to safeguard minors are not employed in
additional of centralized or state necessities.

Equal Pay Laws

The Equal Pay Act necessitates companies to reimbursement males and females the similar remuneration for
responsibility the similar effort. Conditions are progressively transitory comparable commandments, which can transmit
more severe consequences and/or relate in other backgrounds.

Joint Employment Concerns

Combined employ is a important apprehension in the restaurant business, and legal values might fluctuate contingent
on the rule at matter. Normally, a restaurant will be measured a combined company of additional commerce’s staff if it
movements adequate regulator over the relations and circumstances of that administration’s workers.

Paid Leave Laws

An cumulative amount of national and indigenous authorities necessitate companies to deliver workforces with
remunerated permission for a diversity of explanations. Characteristically, these laws necessitate succeeding companies
to deliver permission that the worker might usage for her own remedial illness, or in some authorities, the remedial
circumstances held by the worker’s personal associates.

Restrictive Covenant Agreements

Implementation values vary significantly since national to national. Non-compete, non-solicitation of clienteles, and
employee-raiding arrangements are castoff by numerous companies to defend intimate information, consumer info,
willingness, and their workers.

Part 5:
Task

Read the scenario given in tool and:

a. Identify four performance issues of the Liberty IT system.

  The system does not work properly and failed to provide the revenue and ageing, which makes it tough to make
knowledgeable estimates of future income
 Sometime it is very difficult to get the data which the restaurant have entered .it create lot of difficulties for the
owner to retrieve the data from the system. All the hardware on system needs to be arranged appropriately in
order for your system to effort correctly.
 The software does not allow the user to make graph and anything .Graph help the restaurant to get the exact
situation of the restaurant sales and income.
 The software does not allow the user to see the financial position of the restaurant which makes it difficult for
the owner to know the financial position of the restaurant in present year.

b. Research commercially available restaurant management software and select

two commercially available software titles (software) for comparison against
the capabilities of the existing Liberty IT system, and against the prioritised
requirements of the organisation.

The best restaurant management software is the Toast POS tool, which is specifically targeted at American businesses
such as restaurants. You can improve employee efficiency and the consumer involvement while dropping prices. The
software has a menu administration piece that can switch menu prices, online and offline customer customization, and
entire menu preparation. Sapped is a point of sale and delivery management designed to facilitate the operation of
restaurants. The system is suitable for foodservice industries of all extents, from takeaway and stands to large multi-
chain restaurants and fast food restraints. The Sapped scheme can also lodge all kinds of instructions, counting take-out,
take-out, and operational guidelines. In addition to 's wide range of uses, Sapped is calculated to be easy to use.
Additionally, the arrangement's Dine In segment also delivers a suitable indication of the position of all stands in the
restaurant, so that greeting staff can know precisely how several tables are obtainable, no matter how busy the
restaurant is.

c. Select the most suitable restaurant management software for Liberty

Restaurant Group and provide a reason for your choice.

Toast is an all-in-one cafeteria technology stage. Constructed exactly for restaurants, Toast carries composed numerous
explanations from combined online collation to talent card and faithfulness packages to employment and auctions
reportage all on a movable, cloud-based POS scheme. Toast assistances to progress your processes, grow income, and
get more industry understanding. Toast’s assignment is to generate the best conceivable restaurant visitor involvement
by associating with our consumers to challenge the exclusive encounters of the restaurant atmosphere.
Section B: Establish a budget and allocate ( Calculate and provide
excel sheet in attachment work out in appendix E)

a)
Total sales= 102000*20/100

= 204000

So budgeted total sales amount will be 1020000+204000

= 1224000

Operating Expenses = 893000

Operating Expenses = 893000*3/100

= 26790

Budgeted operating expenses = 893000+26790

=919790

Net Profit before Tax

= 127000 *15/100

=19050

Budgeted net profit before tax =127000+19050

= 146050

Net profit

=88900*38/100

= 33782

=Budget net profit

=88900+33782

=122682

b)
 BUDGET TOTALS ESTIMATED ACTUAL DIFFERENCE

Income 88,900.00 57,450.00 31450

Personnel Expenses 18,500.00 14,100.00 4,400.00

Operating Expenses 893000.00 936800.00 (43800)

Balance (Income (7950)

1000400 1008350
minus Expenses)

Assessment 3 – Project: Report on Finances

I. Overview of past performance

a. Identify and prioritise significant issues in the existing /factual financial

statements and forecasted information, for review and decision making – i.e. what
needs to be reviewed and actioned in which order?
Include a comparative analysis of financial performances of both restaurants for
review and decision making.

A main component of financial statistics movement breaks in the performance of planning. Budgeting is the procedure
of assigning determinate capitals to the arranged requirements of an association. In most cases, for a administrative
object, the budget characterizes the legal specialist to devote currency. Implementation of a budget in the community
subdivision suggests that a customary of choices has been completed by the leading panel and superintendents that
concludes in corresponding a administration's capitals with the object's requirements. As such, the budget is a produce
of the preparation procedure. The budget also delivers an significant tool for the regulator and assessment of
foundations and the usages of incomes. Using the bookkeeping method to endorse the will of the leading body,
superintendents are talented to perform and switch actions that have been authorized by the inexpensive and to
appraise financial presentation on the foundation of evaluations among planned and actual processes. Thus, the budget
is indirectly connected to financial responsibility and narrates straight to the financial reportage objectives recognized by
the GASB. The link among financial preparation and budget research provides the economical certificate a unique role in
administrative administrations. Budgets in the community ground are often measured the conclusive strategy article as
an accepted budget characterizes the financial strategy castoff by a administration to attain its objectives and aims.
II. Overview of budget changes
a. Identify the rationale and the assumptions for the budget you have developed.

Time and cash are unusual possessions to all personalities and administrations; the effective and actual usage of these
possessions wants development. Development unaccompanied, however, is deficient. Regulator is also essential to
safeguard that strategies essentially are approved out. A budget is a instrument that executives usage to strategy and
regulator the usage of scarce capitals. A budget is strategy presentation the business’s purposes and how organization
proposes to obtain and usage capitals to reach those aims.

b. Explain how you have applied the following accounting principles to develop
your budget:

o matching principle

The corresponding attitude is a bookkeeping thought that commands that corporation’s explosion expenditures. They
are typically balancing up against income via the corresponding belief at the same time as the incomes.

o account groups

The account collection is a direct of books based on criteria that effects how master archives are shaped. The budget
dated is the period of phase during which you are official to employ the reserves bestowed and duty meet the
corresponding or cost-sharing requirement, It guides departments and divisions for making revised estimations
and Budget Approximations.

o time periods

An eventuality reasonable is currency set sideways to shelter unforeseen prices during the edifice procedure. This
money is on standby and not owed to one area of the exertion, and merely “insurance” against other charges.
An eventuality plan is a strategy planned for an consequence other than in the normal strategy.

c. Identify at least one contingency that could impact your budget, and how would
you manage it.

a line-item budget is a form of inexpensive demonstration that collections planned expenses by section or
cost midpoint. This method of combination more easily demonstrations which sections and cost centers are
fascinating the wholesale of an entity's reserves
 d. Briefly explain how you have done your due diligence through checking all details
and aligning your budget to organisational objectives.
To device policies and databases in the utmost well-organized and money-making technique, the line offices
and activities should be given satisfactory suppleness to manage their resources within the strategy outline of
the budget. Overruns are occasionally caused by nonfulfillment of budget executives with the expenditure
restrictions distinct in the budget, when obligating expenditures. Since cash distributed to expenditure units for
took expenditures is normally measured, these invades turn into debts group.

III. Recommendations for improvements to financial processes and systems

a. Analyse and briefly comment on the effectiveness of existing financial
management processes.

Actual monetary organization is vital for commercial existence and development. It includes preparation, establishing,
supervisory and nursing your monetary capitals in order to attain your commercial aims. Good monetary organization
will help your industry to create actual use of capitals, fulfill promises to your shareholders, gain modest benefit and
organize for long-term monetary constancy. Economics frequently seen as the guardians of evidence, there is a serious
portion to play in important or contributing in this change. Economics has long been data-driven in footings of handling
the commercial with higher level 'strategic' choices such as preparation, accounting, predicting and reportage.

b. Make recommendations for improving the effectiveness of existing

financial management processes, including:

o three recommendations for internal controls for managing risks of

misappropriation of funds

 Regular evaluation of the fund's management and accounting methods and actions will help evaluate and
display the regulator environment and improve the trustee reportage system.
 The trustee must be pleased that the method delivers the evidence necessary to fulfill its obligations related to
fraud minimization and interior control.
 A code of conduct is needed to plan what is expected of each worker, whether they are contractors, employees
or consultants, and generally deliver direction in areas such as conflicts of interest.

o at least three recommendations for establishing a system to record all

transactions
  The utmost basic way for recording transactions is journal entries, where the accountant automatically enters
the account number and debits and credits for each deal.
 After receiving the supplier statement, the bookkeeper records it in the books payable unit of the accounting
software.
 When paying employees' wages, the accountant enters the wage rate and working hours of all staffs in the
wage component of the bookkeeping software.

o at least three recommendations for maintaining an audit trail

 Make an audit file before entering the procedure generation report. When the form is generated, the audit
items will be added to this folder.
 In the form build declaration; usage to print the code and features to be traced. The data for these qualities is
kept in the audit file, but does not seem on the form.
 By entering 1 instead of the x and y coordinates, the sequential number is prohibited from being displayed in
the form and kept in the audit file.

o a process for complying with due diligence

The budget is indirectly connected to financial responsibility and narrates straight to the financial reportage objectives
recognized by the GASB. The link among financial preparation and budget research provides the economical certificate a
unique role in administrative administrations. Budgets in the community ground are often measured the conclusive
strategy article as an accepted budget characterizes the financial strategy castoff by an administration to attain its
objectives and aims.

Characteristically, these laws necessitate succeeding companies to deliver permission that the worker might usage for
her own remedial illness, or in some authorities, the remedial circumstances held by the worker’s personal associates.

Financial development stretches personalities the capability to break depressed their moneys and find zones where
expenditure can be censored to except currency. Once there is further cash in the reasonable, this money can be
protected for upcoming objectives or capitalized to assistance brand the currency produce quicker.
 c. Develop a financial performance monitoring/ reporting schedule that covers:

o Types of reports to be
prepared Frequency of reports
p Formal or Relaxed Reports:
q Short or Long Reports:
r . Informational or Analytical Reports
s Proposal Report:
t . Vertical or Lateral Reports:
u Internal or External Reports:
v Periodic Reports:

o Personnel responsible for creating, submitting, and collating reports

Report type Monit Monitoring/ Personnel Reporting

reporting responsible dates (Q1 –
frequency Q4)
System 5 1.5 4.5
software
performance.
report for 6 6 2.3
financial
allocation
Performance 4 3.6 4.1
of staff

d. Make four recommendations for ensuring the financial viability of the organisation.

 Estimation income and expenditures.

 Perform a contribution examination to regulate if your strategy contributes definitely to the bottom line.
 Combine all of your figures into one-year and three-year financial forecasts.
 Organize delayed or recurring payment plans for major expenses
 Assessment 4 – Implement Budgets

PART A

Please fill the PowerPoint presentation template provided

Slide 1

Cairns is one of the restaurant who is getting lot of competition from other restaurant and unable to get the return
from its investment .in Crain’s, the expenses is more than income so the restaurant is not getting enough profit from it
so the restaurant management decided to close the restaurant .

Slide 2

The new budget of Melbourne restaurant has shown a huge profit margin. From 86 % to 87% change in the sales in
one year which is quite exception as the restaurants are facing lot of competition from other restaurant .As per the
current year financial statement ,the restaurants is moving in a right direction and will get enough profit from their
restaurant sales.

Slide 3

Restaurant Profit and Loss Recommendations (also known as Income Reports, Salary Reports, or Process Reports) are
a management tool used to evaluate earnings on the assumed date (positive results). What can be annoying is that
the financial condition of the restaurant is good and the future. The conclusions of the plan drawn from the income
statement should focus on creating even additional benefits for the restaurant.

Slide 4

Research and expansion costs, advertising and force development costs, as a substitute for factory and tool costs,
understandably predictable, and controls sales and revenue development in different neighborhoods in a comparable
way. If the growth of transactions and revenues disrupts the effectiveness and performance of the market value in the
simulation, in addition to certain circumstances, the incentive variables can have unexpected and direct effects on the
effectiveness and market value.

Section B - Revise forecast budgets to deal with contingencies (Appendix C - Year Y3 Q1 Actual
P&L).

More generally, the difference in the restaurant business refers to the alteration among what is predictable and what
happens. Discrepancies happen utmost often when you’re spending or usage is higher or lower than your plan and
budget. In short, using variance can take the conjecture out of following costs and practice, and permits you to
comprehend and explain any variance. By understanding the difference between your budget and actual payments,
usage, and sales, you'll have a smart way to deal with any kitchen or bar management issues, which can save you
thousands of dollars down the road. Scheming the variance and using it to earn more cash is not magic. The difference
tells you where to appearance, but you must enter the correct numbers to get dependable information. It is also
suggested that you run discrepancies reports regularly so that you can advertisement any difficulties before they
developed major losses. From there, you can be sure that any changes you find will point out where you can optimize
the business to excluding and earn more money.