Question
Review Half Yearly Performance and Revise Projections Using the Appx1_Skyward_Budget_and Performance Report template review the data provided by Skyward for the first two quarters of
- Review Half Yearly Performance and Revise Projections
Using the Appx1_Skyward_Budget_and Performance Report template review the data provided by Skyward for the first two quarters of the year.
Review the current assumptions and parameters of the budget for accuracy and relevance and conduct appropriate research into the relevant industry to identify the feasibility of forecasts.
Use your research and the additional information provided by Skyward to perform relevant analysis to determine an appropriate response to the previous 2 budgetary quarters.
To perform this analysis, complete the following schedules in the EXCEL Template:
- 3A Half Yearly Performance (by quarter first and second quarters)
- 3B Revised projections (for the third and fourth quarter)
Make sure that your Excel Spreadsheet includes all appropriate formulas and calculations including links across worksheets.
- Prepare Cash Flow Forecast
Using the FNSACC523_AE_Sk3of3_Appx1_Skyward_Budget_and Performance Report template prepare a cash flow forecast for the third quarter and including calculations for cash Receipts and cash payments.
To prepare this budget complete the following in the EXCEL Template:
- 3C Cash Flow Forecast
Make sure that your Excel Spreadsheet includes all appropriate formulas and calculations including links across worksheets.
- Prepare Half Yearly Financial Report
Using the Appx4_Skyward_Half Yearly Financial_Report_template prepare the half-yearly Financial Report for submission to Skywards Executive Team.
Make sure that the structure of your report follows the template headings and includes the following:
- First and second-quarter performance analysis and review
- Third and fourth quarter revised projections for 2023/2024 with detailed assumptions
- Detailed cash flow forecast for the third quarter
- Provide detailed analysis and discussion for delivering the outcomes outlined in the 2023/24 Annual budget including:
- Recommendations to achieve a cash surplus
- Review of budget processes.
With the third quarter about to start, forecasted sales are down 35% from budgeted numbers for the third and 4th quarters.
Variable costs for the first and second quarters were accurately budgeted, however, variable costs are now forecasted to rise by 5% for the third and 4th quarters. Fixed costs have remained the same for the duration of the budget.
Additional information relating to cash flow is also provided:
- Sales:
- cash sales = 5% of total sales (EFTPOS, bank transfers and cash are reconciled daily)
- of credit sales, 65% paid within the month of sale and a 2% on-time payment discount is applied. The remaining 35% paid within the month following the sale.
- Purchases:
- All purchases are made on credit with 80% paid the month of purchase and the remaining 20% paid within the month following purchase.
- Cash balance as of 31 December 2023 was $883,253.
Skyward Travel/3.A | ||||||||||
Half Yearly Performance Report | ||||||||||
For the period ended 31 December 2023 | ||||||||||
1st Quarter Budget $ | 1st Quarter Actual $ | $ Variance | % Variance | F or U | 2nd Quarter Budget $ | 2nd Quarter Actual $ | $ Variance | % Variance | F or U | |
Sales | 2,654,385 | 3,185,262 | 530,877 | 20% | F | 1,516,791 | 1,895,989 | 379,198 | 25% | F |
Less Cost of Sales | 1,232,209 | 1,478,651 | 246,442 | 20% | U | 704,120 | 880,150 | 176,030 | 25% | UF |
Gross profit | 1,422,175 | 1,706,611 | 284,435 | 20% | F | 812,672 | 1,015,840 | 203,168 | 25% | F |
Gross Profit % | 54% | 54% | N/A | 0% | 54% | 54% | N/A | 0% | ||
Less operating expenses: | ||||||||||
Employee Expenses | 717,390 | 755,147 | 37,756 | 5% | F | 513,859 | 540,904 | 27,045 | 5% | UF |
Advertising | 7,354 | 8,090 | 735 | 10% | UF | 7,354 | 8,090 | 735 | 10% | UF |
Rent | 112,939 | 112,811 | -128 | 0% | F | 112,939 | 112,811 | -128 | 0% | F |
Other Operating Expenses | 8,402 | 10,004 | 1,601 | 19% | UF | 8,402 | 10,004 | 1,601 | 19% | UF |
Utilities | 10,354 | 10,354 | 0 | 0% | 10,354 | 10,354 | 0 | 0% | ||
Insurance | 26,705 | 26,705 | 0 | 0% | 26,705 | 26,705 | 0 | 0% | ||
Depreciation of Office Equipment | 6,450 | 6,450 | 0 | 0% | 6,450 | 6,450 | 0 | 0% | ||
Accounting Fees | 5,000 | 5,000 | 0 | 0% | 5,000 | 5,000 | 0 | 0% | ||
Total operating expenses | 894,595 | 934,560 | 39,966 | 4% | F | 691,064 | 720,317 | 29,254 | 4% | UF |
Net profit | 527,581 | 772,050 | 244,469 | 46% | F | 121,608 | 295,522 | 173,914 | 143% | F |
Net Profit % | 20% | 24% | N/A | 4% | F | 8% | 16% | N/A | 8% | F |
Skyward Travel/3.B | |||||
Quarterly Revised Projections | |||||
For the period ended 30 June 2024 | |||||
2023/24 Full Year Budget | 3rd Quarter Budget $ | 3rd Quarter Projection $ | 4th Quarter Budget $ | 4th Quarter Projection $ | |
Sales | 7,583,957 | 1,137,593 | 739,436 | 2,275,187 | 1,478,872 |
Less Cost of Sales | 3,520,598 | 528,090 | 554,494 | 1,056,179 | 1,108,988 |
Gross profit | 4,063,358 | 609,504 | 184,942 | 1,219,008 | 369,883 |
Gross Profit % | 54% | 54% | 25% | 54% | 25% |
Less operating expenses: | |||||
Employee Expenses | 2,326,811 | 446,015 | 446,015 | 649,547 | 649,547 |
Advertising | 29,418 | 7,354 | 7,354 | 7,354 | 7,354 |
Rent | 451,755 | 112,939 | 112,939 | 112,939 | 112,939 |
Other Operating Expenses | 33,609 | 8,402 | 8,402 | 8,402 | 8,402 |
Utilities | 41,417 | 10,354 | 10,354 | 10,354 | 10,354 |
Insurance | 106,820 | 26,705 | 26,705 | 26,705 | 26,705 |
Depreciation of Office Equipment | 25,800 | 6,450 | 6,450 | 6,450 | 6,450 |
Accounting Fees | 20,000 | 5,000 | 5,000 | 5,000 | 5,000 |
Total operating expenses | 3,035,629 | 623,220 | 623,220 | 826,751 | 826,751 |
Net profit | 1,027,729 | -13,716 | -438,278 | 392,257 | -456,868 |
Net Profit % | 14% | -1% | -59% | 17% | -31% |
Skyward Travel/3.C | ||||
Half Yearly Performance Report | ||||
For the period ended 31 December 2023 | ||||
December | January | February | March | |
Total Sales | 258,300 | 229,658 | 309,521 | 198,325 |
Cash Sales (5% of Total Sales) | 12,915 | 11,483 | 15,476 | 9,916 |
Credit sales (95% of Total Sales) | 245,385 | 218,175 | 294,045 | 188,409 |
CASH RECEIPTS BUDGET | January | February | March | |
Accounts Receivable Collections | ||||
December Collections | 85,885 | |||
January Collections | 138,978 | 76,361 | 64% | |
February Collections | 187,307 | 102,916 | ||
March Collections | 120,016 | |||
Total Collections from Accounts Receivable | 224,862 | 263,668 | 222,932 | |
Cash Sales | 11,483 | 15,476 | 9,916 | |
Total Cash Receipts | 236,345 | 279,144 | 232,848 | |
CASH PAYMENTS BUDGET | December | January | February | March |
Credit Purchases | 176,895 | 185,241 | 175,632 | 188,522 |
Payments: | ||||
December Payments | 141,516 | 35,379 | ||
January Payments | 148,193 | 37,048 | ||
February Payments | 140,506 | 35,126 | ||
March Payments | 150,818 | |||
Cash paid to suppliers | 141,516 | 183,572 | 177,554 | 185,944 |
Wages | 251,716 | 251,756 | 251,756 | 251,756 |
Accounting Fees | 1,667 | 1,667 | 1,667 | 1,667 |
Other operating Expenses | 3,335 | 3,335 | 3,335 | 3,335 |
Advertising | 2,697 | 2,697 | 2,697 | 2,697 |
Rent | 37,604 | 37,604 | 37,604 | 37,604 |
Insurance | 8,902 | 8,902 | 8,902 | 8,902 |
Utilities | 3,451 | 3,451 | 3,451 | 3,451 |
Total Cash Payments | 450,888 | 492,984 | 486,966 | 495,356 |
CASH BUDGET | January | February | March | |
Opening Cash Balance | 883,253 | 626,614 | 418,793 | |
Cash Received from Cash Sales | 11,483 | 15,476 | 9,916 | |
Cash received from Credit Customers | 224,862 | 263,668 | 222,932 | |
Total Cash Receipts | 236,345 | 279,144 | 232,848 | |
Total Cash Available | 1,119,598 | 905,758 | 651,641 | |
Cash paid to Suppliers | 183,572 | 177,554 | 185,944 | |
Cash paid to Employees | 251,756 | 251,756 | 251,756 | |
Cash paid for other operating expenses | 57,656 | 57,656 | 57,656 | |
Total Cash payments | 492,984 | 486,966 | 495,356 | |
Closing Cash Balance | 626,614 | 418,793 | 156,285 |
Appendix 4: Skyward Half Yearly Financial Report - GUIDELINES
Half Yearly Financial Report Skyward
Budget Overview/Summary |
Summarise here what this report is going to be about
|
First and Second Quarter Performance |
Copy the results from your 3A spreadsheet here. Dont just insert an image. Make it look pretty, this is a report to management remember |
Third and Fourth Quarter Revised Projections |
Copy the results from your 3B spreadsheet here. Dont just insert an image. Make it look pretty, this is a report to management remember |
Third Quarter Cash Flow Forecast |
Copy the results from your 3C spreadsheet here. Dont just insert an image. Make it look pretty, this is a report to management remember
|
Review of Assumptions and Feasibility of Forecasts |
List the assumptions you used in the budget process here Were they feasible? That is, were they a good projection or did you get it wrong What changed that made your projections out? What could change in the future that puts further projections out? |
Recommendations to Achieve a Cash Surplus |
Give some recommendations that improve cash For example, think of the work we did in NPV in FNSACC521 Financial business information, where you analysed the collection pattern of Acc Rec and saw that if they collected debts faster they got a higher NPV. For example, what costs can be reduced? |
Review of Budgeting Process |
What can be done better next time? |
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