Grow Management Consultants is a consultancy business specialising in leadership consultancy and has been operational for the last five years. The company offers a range of services to assist companies to assess leadership behaviour of existing managers and performance metrics and to design and implement customised leadership programs based on the assessment. Services are offered Australia-wide.

The company employs a General Manager (you), 2 Principal Consultants (who are also Directors), 1 Senior Consultant, an Administration Officer and Receptionist.

Over the last two years, the company has diversified and offers regular professional development workshops on all aspects of leading and managing staff. These workshops are conducted approximately every 3 months in major cities including Sydney, Brisbane and Melbourne. In 2017 - 2018, the company ran a total of 36 workshops. The company has also recently produced an E-book about leadership techniques.

The intention is to replace the workshops with the annual conference in the next financial year as the workshops were not well attended and client feedback indicates a personalised, company focused approach in the form of consulting services is the service of choice.

The E-book has had reasonable sales but there needs to be a wider selection of books, as well as more marketing. The plan is to generate $10,000 worth of sales for the e-books during the next financial year and increasing over time.

As the General Manager for the company and with responsibility for finances, you are currently completing the financial planning for the year ahead. This involves a review of the company's business plan, previous year's profit and loss statement, the current business plan and strategic directions and cash flow statements. Based on the review, you will be establishing budgets and allocating funds. In developing the budget, you are to assume a 5% increase in cost of sales, as well as a 10% increase in sales for consulting services and executive search.

As per the business plan, the company plans to run an annual conference starting in 2019. The costs for the conference have been estimated by the Principal Consultant as set out in the Estimated Conference Costs document. Conference attendance is aimed at 80 people paying $610 (early bird) - $690 (standard) each. You will be provided with a copy of the Estimated Conference and E-book cost and Income, for the purpose of this assessment.

The Principal Consultant has also asked you to review the current accounting software used by the business. The company is currently using MYOB but as it has grown, the Principal Consultant wishes to review whether this is the best accounting software for the business. He has also requested that the software have a cloud feature.

Instructions:

It is now six months later and you are required to review the 2019 - 2020 interim Cash flow Statement.

The Principal Consultant has also asked you to focus on reviewing the conference costs as while there was very positive feedback from the conference and the company wishes to run another in the second half of the year (May). The budget needs to be revised to include this conference with a proposed price increase for the conference fee to make the conference more profitable.

The Principal Consultant would like you to report on a proposed conference fee given a 10% increase in all the recorded costs for the conference as shown in the interim Cash Flow Statement. Assuming 70 people will attend the 2020 conference in May. The Principal Consultant would also like a 20% return on the conference costs.

Complete the following activities:

Activity 1

Analyse financial information and develop a written report on Business Performance & Proposed Additional Conference.

Analyse the information provided in the 2018 - 2019 profit and loss statement and 2019-2020 interim cash flow statement, and develop a written report including each of the following:

1)Calculate the variation in actual versus budgeted amounts, at the six-month point, for each income source to maintain an audit trail.

2)Review the business expenses over the last 6 months. Budget v's Actual and provide comments to if the business is Over - Under - On Track.

3)Identify and prioritise any significant issues in the 2019- 2020 interim Cash Flow Statement.

4)Focusing on the proposed May conference in 2020, develop a budget for this event applying a 10% increase to previous expenses and include the required participant fee to achieve 20% on expenses.

5)Based on 70 conference participants, what is the new proposed conference fee for each participant?

6)Outline below your comments on any contingencies you have for the proposed conference