Ambition

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Ambition
in Action
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HEAD TEACHER DEVELOPMENT PROGRAM FINANCE
MANAGEMENT ACTIVITY WORKBOOK
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CONTENT

• Source of Finance Activity
• Cashflow Activity
• Sales Budget Activity
• Purchase Budget Activity
• Human Resource Budget Activity
• Monitor Progress Activity
• Self-Test Quiz

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Source of Finance

• Where does the source of Finance come from in
  TAFE?

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Cashflow Activity

• On the next page use the cashflow template to
  complete a cashflow budget for your particular
  section.

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Cashflow Activity
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Sales Budget Activity

• In groups design a small sales budget for your
  section by product. Include estimates of the
  following
• Sales volume.
• Prices.
• Selling marketing expenses.

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The Purchase Budget Activity

• Do TAFE Institutions need to have a purchasing
  budget?
• Is purchasing done by the head teachers only as
  the need arises or should the cost of these
  activities be accounted for in the business?
• Should purchasing activities occurring regularly
  be methodically planned?

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• Have you considered how much time you will need
  to set aside in your section for purchasing
  activities?
• Discuss your ideas with other learners. Are their
  ideas similar to yours?

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Human resources budget

• What are the costs at TAFE of employing someone?
• How much time will need to be spent adhering to
  record keeping, payroll and other administrative
  tasks related to employing staff?
• How much time will need to be spent supervising
  staff or outsourced work?

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Monitor Progress

• What financial measurements do you think will be
  important for TAFE? Give reasons why.

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Monitor Progress

• Answers
• Financial measurements important for your
  businessThe choice of financial measurements
  suitable for your business depends on many
  factors. Is there an inventory to keep track of?
  Is service the main function of the business? Is
  there debt? Do you run accounts or deal mainly in
  cash? Do you have a certain profit objective? You
  (and your accountant) must understand the reasons
  for the financial measurements you choose

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Self-test Questions

• Question 1
• Which of the following lists the two main
  approaches to developing a cashflow forecast?
• A Identify sources of finance and guess how
  much will flow into your business.
• B Review old forecasts and base the next
  forecast period entirely on the previous one.
• C Make a guess about the most likely cashflow
  forecast and compare this with the best guess of
  someone else working in the same industry.
• D Start with market research and a prediction
  about sales and profits expected from marketing
  strategies and use dollar targets to calculate
  whether the market can be tapped for this
  amount.

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Self-test Questions

• Question 2
• Which of the following is the most liquid
  business asset?
• A Machinery.
• B Building.
• C Stock.
• D Cash.
• Question 3
• Is the following statement true or false?
• Financial statements can assist you in monitoring
  your business financial health.

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Self-test Questions

• Question 4
• Is the following statement true or false?
• Current assets are those assets which form part
  of the infrastructure of the business.
• Question 5
• Is the following statement true or false?
• Current liabilities are those amounts owed which
  need to be paid within a short period of time
  (i.e. usually within 12 months).
• Question 6
• Is the following statement true or false?
• Financial statements generally show trends,
  relationships, strengths and weaknesses in key
  areas of your business.

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Answers to self-test questions

• Question 1
• The correct answer is D - Start with market
  research and a prediction about sales and profits
  expected from marketing strategies and use dollar
  targets to calculate whether the market can be
  tapped for this amount.
• These approaches will tell you about market
  potential as well as the dollar amounts required
  to survive.
• Question 2
• The correct answer is D - Cash.
• Cash is the most liquid business asset. How
  quickly certain assets can be converted to cash
  is one measure of business viability.
• Question 3
• This statement is true. Financial statements are
  very useful for monitoring the financial health
  of your business.

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Answers to self-test questions

• Question 4
• This statement is false. Current assets are those
  assets that are consumed during the normal
  operating cycle of the business, e.g. stock and
  cash. Fixed assets are assets that form part of
  the infrastructure of the business.
• Question 5
• This statement is true. Current liabilities
  refers to amounts owing, other than long-term
  loans.
• Question 6
• This statement is true. These are the benefits of
  financial statements.