TASK This task requires you to apply your knowledge to the start-up business you will establish as part of your final business plan. Part A enables you to prepare budgets for a business in Australia. Part B requires you to calculate and analyse financial ratios to assess the financial health of a business. Part C is the groundwork for your business plan that you will undertake in Assessment 3. The purpose of Part A and B is to develop preliminary research and budget preparations for your chosen business indicated in Assessment 1. You are required to prepare ratio calculations and financial forecasts using Microsoft Excel using the template provided. You are also required to prepare a report containing your ratio analysis and prospective financial information in Microsoft Word.

Part A: Budgeting You are to prepare monthly forecasted budgets following a chosen business in assessment 1. 1. Sales budget 2. Purchase budget 3. Cash flow budget 4. Profit and loss budget 5. Balance Sheet budget Note : You are to assumptions from your market research to workout the forecasted budgets.

Part B: - Ratio analysis

From the information in Part A, calculate the following financial ratios: Profitability ratios: Return on equity; Return on assets; Gross profit margin; Net profit margin; Asset efficiency ratios: Asset turnover ratio; Receivables turnover ratio; Liquidity ratios: Current ratio; Quick ratio; Capital structure ratios: Debt to equity ratio

Part C: Research plan Prepare a research report and critically analyse (a) and (b) above. Your analysis must include financial and non-financial issues. You should respond to the following: Identify and explain the nature and location of the new enterprise in Australia that you wish to establish as your own new start-up small business identify the ownership structure. Identify and explain your product/service selling price and compare and evaluate it against your key competitors. Identify and discuss the sources of finance available to small businesses - indicate which you will be using in your business. Please note: The amount of equity you have available for the venture from personal assets, including assistance from friends and family is AUD$20,000. You may, of course, seek additional debt or equity funding from other sources. Address all of the following financial forecasts including: Basic assumptions and information (not included in word count) Sales mix forecast (monthly for year 1) Cash flow forecast (monthly for year 1) Personal expenses (monthly for year 1)