ASAP please

1. Background You have been employed as financial controller from 1.12.2020 of a small family-owned company. In the past there has really been no financial management but now that the founder's daughter took over as CEO she wants proper procedures and reports. The company has a board of directors with three external board members plus two representatives of the owning family. The company imports electronic equipment from South Korea and Japan and sells that to distributors. There are no retail sales of the products directly to customers, but there is a service department selling spare parts online to consumers and repair shops. The company is organized into three divisions: Audio (2 salespersons), Video (1 salesperson) and Spares (1 salesperson). The purchasing is done by one person and you are in administration. The CEO is also a full-time employee. Business is going acceptably but there is a slight concern that the brands represented may not be at the spearhead of technology. The CEO is actively looking for new brands to sell, but that is likely to have an effect in 2022, earliest. Liquidity has been poor during the last year: 2. Numerical data The income statement and balance sheet for 2019 and 2020 (forecast) can be found below. The company has prepared no operating budget nor any cash flow budgets in the past. Ardaca Imports Ltd 2019 2020 Notes Financial information 000 of euros 2 096 1 467 629 INCOME STATEMENT Sales Cost of goods sold Gross profit Payroll costs Other operating expenses Depreciation Interested Profit before tax Income taxes Net profit 2087 1461 626 317 117 125 83 137 125 79 10 16 1 17 10 500 Annual depreciation 125 876 BALANCE SHEET ASSETS Office equipment Goods for sale in Inventory Spare parts in inventory Trade receivables Prepaid expenses Cash equivalent 158 442 132 152 2 260 375 937 212 458 77 41 2100 LIABILITIES Share capital Retained earning Long-term loans Trade payables Accrued expenses Other short-term debt Annual amortization 200 100 69 1500 390 113 88 2260 100 59 1 300 440 89 112 2 100 2020 Sales in 000 of Euros Audio Video Spares Total Manuary February March April May 100 113 107 111 100 77 0 79 78 74 92 57 52 0 22 13 9 11 7 9 13 4 18 22 7 19 8 140 192 200 192 >10 185 142 4 July August September October November December 85 112 78 76 170 197 238 281 2096 135 1106 138 ASO 3. The budget Your first task is to prepare a master budget (operating budget, balance sheet and cash flow budget) for 2021. The budget may of course be partly based on the figures from previous years but all budget numbers and underlying assumptions must be briefly discussed and documented. Where you lack data for the budget, carry out research and try to come up with sensible numbers that you can explain. Be sure to include recommendations and action points in the documentation, if you come up with any 4. The proposed financial report Secondly, prepare a proposal for a financial report for the company, in particular the Board. Prepare a template (a model) of the January 2021 monthly financial report, using January 2021 budget data, leaving the actual outcomes blank. Remember to include all relevant financial and non-financial information, but without drowning the reader in details. The report must give the Board all necessary information for evaluating the performance of the company. 5. Grading notes The assignment gives a maximum of 100 points as follows: documented budget assumptions with discussion and explanations 20 a sensible and realistic operating budget 20 a balance sheet that balances and ties in with the other parts 20 a realistic monthly cash flow budget that ties in with the others 20 reporting structure and template 20 Please note that Excels that are incomprehensible (impossible for me to understand) will get no points! Late submissions will get a penalty of 10 points. 1. Background You have been employed as financial controller from 1.12.2020 of a small family-owned company. In the past there has really been no financial management but now that the founder's daughter took over as CEO she wants proper procedures and reports. The company has a board of directors with three external board members plus two representatives of the owning family. The company imports electronic equipment from South Korea and Japan and sells that to distributors. There are no retail sales of the products directly to customers, but there is a service department selling spare parts online to consumers and repair shops. The company is organized into three divisions: Audio (2 salespersons), Video (1 salesperson) and Spares (1 salesperson). The purchasing is done by one person and you are in administration. The CEO is also a full-time employee. Business is going acceptably but there is a slight concern that the brands represented may not be at the spearhead of technology. The CEO is actively looking for new brands to sell, but that is likely to have an effect in 2022, earliest. Liquidity has been poor during the last year: 2. Numerical data The income statement and balance sheet for 2019 and 2020 (forecast) can be found below. The company has prepared no operating budget nor any cash flow budgets in the past. Ardaca Imports Ltd 2019 2020 Notes Financial information 000 of euros 2 096 1 467 629 INCOME STATEMENT Sales Cost of goods sold Gross profit Payroll costs Other operating expenses Depreciation Interested Profit before tax Income taxes Net profit 2087 1461 626 317 117 125 83 137 125 79 10 16 1 17 10 500 Annual depreciation 125 876 BALANCE SHEET ASSETS Office equipment Goods for sale in Inventory Spare parts in inventory Trade receivables Prepaid expenses Cash equivalent 158 442 132 152 2 260 375 937 212 458 77 41 2100 LIABILITIES Share capital Retained earning Long-term loans Trade payables Accrued expenses Other short-term debt Annual amortization 200 100 69 1500 390 113 88 2260 100 59 1 300 440 89 112 2 100 2020 Sales in 000 of Euros Audio Video Spares Total Manuary February March April May 100 113 107 111 100 77 0 79 78 74 92 57 52 0 22 13 9 11 7 9 13 4 18 22 7 19 8 140 192 200 192 >10 185 142 4 July August September October November December 85 112 78 76 170 197 238 281 2096 135 1106 138 ASO 3. The budget Your first task is to prepare a master budget (operating budget, balance sheet and cash flow budget) for 2021. The budget may of course be partly based on the figures from previous years but all budget numbers and underlying assumptions must be briefly discussed and documented. Where you lack data for the budget, carry out research and try to come up with sensible numbers that you can explain. Be sure to include recommendations and action points in the documentation, if you come up with any 4. The proposed financial report Secondly, prepare a proposal for a financial report for the company, in particular the Board. Prepare a template (a model) of the January 2021 monthly financial report, using January 2021 budget data, leaving the actual outcomes blank. Remember to include all relevant financial and non-financial information, but without drowning the reader in details. The report must give the Board all necessary information for evaluating the performance of the company. 5. Grading notes The assignment gives a maximum of 100 points as follows: documented budget assumptions with discussion and explanations 20 a sensible and realistic operating budget 20 a balance sheet that balances and ties in with the other parts 20 a realistic monthly cash flow budget that ties in with the others 20 reporting structure and template 20 Please note that Excels that are incomprehensible (impossible for me to understand) will get no points! Late submissions will get a penalty of 10 points