Develop and implement financial strategies

Assessment 1

Task 1

  1. Reviewing workplace data

While reviewing the data, it is essential for the data analyst under the organization to adopt appropriate strategy to review the data so that this process can be done efficiently (Jang, 2016). These are some specific points that need to be followed:

  • Step 1: Define the Questions

In the organizational or business data analysis, you must begin with the right question(s). Questions should be measurable, clear and concise.

  • Step 2: Set Clear Measurement Priorities

This step breaks down into two sub-steps:

  1. A) Decide what to measure: Using the government contractor example, consider what kind of data you’d need to answer your key question.
  2. B) Decide how to measure it: Thinking about how you measure your data is just as important, especially before the data collection phase, because your measuring process either backs up or discredits your analysis later on.
  • Step 3: Collect Data

With your question clearly defined and your measurement priorities set, now it’s time to collect your data.

  • Step 4: Analyze Data

After you’ve collected the right data to answer your question from Step 1, it’s time for deeper data analysis.

  • Step 5: Interpret Results

After analyzing your data and possibly conducting further research, it’s finally time to interpret your results.

  1. Determining options for financial strategies

In respect to determine the right options for financial strategies, it is important for the business owners to analyze all the available strategies so that effective and appropriate financial strategy can be adopted or chosen by the manager under the business (Hess et al., 2016).

In this way, Strategy is the large-scale plan for making the vision happens. Tactics are the specific actions involved in following the plan. Many people find strategic thinking difficult and easily revert to tactical thinking instead.

  1. Implementing new strategies in the workplace

In order to implement the new strategies in the workplace, there are some steps that can be adopted under the organization (Loeppke et al., 2015). These steps are defined below:

  1. Foster a Culture Of Transparency
  2. Provide Training
  3. Encourage Along the Way
  4. Keep Your Eyes on the Data
  5. Acknowledge the Strategy
  6. Monitoring and reviewing processes and evaluating outcomes
  • Step 1: Designing an Efficient Plan for Monitoring

Designing an effective plan is the most important activity in the project monitoring process.

  • Step 2: Designing Effective Report Management Mechanism

Project leaders can conduct meetings with the team members on a regular basis. This can be a formal meeting or an informal one.

  • Step 3: Recommendations for Project Improvement

This is one of the important activities in project monitoring. The project lead has to design a report management mechanism that effectively passes the information among the team members, top tier management, and other people linked to the project process (Yawar and Seuring, 2017).

  • Step 4: Ensuring Guidelines and Recommendations Are Followed Accordingly

Project managers must also ensure that the team is working according to the guidelines given by the client and also must see that the recommendations made by the top tier management team is implemented by the production team.

Task 2

  1. The types and sources of data and information used to analyze financial strategies

Types of data:

  1. Categorical:
  2. Nominal
  3. Ordinal
  4. Numerical
  5. Interval
  6. Ratio

Resources of data:

  1. Direct Personal Investigation
  2. Indirect Oral Interview
  3. Mailed Questionnaire
  4. Schedules
  5. Local agencies
  6. Published Sources
  7. Unpublished Sources
  8. Compare and contrast methods of:
  • Financial evaluation

Financial evaluation is defined as the process of evaluating various projects, budgets, businesses and further finance-related subsidiaries to agree on their viability for investment (Kostyukova et al., 2017). Financial evaluation or popularly known as financial analysis is used to examine whether a unit is steady, liquid, solvent, or profitably adequate to be invested in.

  • Storing, recording and updating financial information

Formal documents represent the transactions of a business, individual or other organization. Financial records maintained by most businesses include a statement of retained earnings and cash flow, income statements and the company’s balance sheet and tax returns (Ferrari et al., 2016). In addition, it is important to keep the financial records updated so that the accurate financial decisions can be made under the organization.

  1. Identify and explain the key principles of:
  • Cost–benefit analysis and forecasting techniques

Cost–benefit analysis:

  1. Discounting the costs and benefits
  2. Defining a particular study area (Dunn, 2015)
  3. Addressing uncertainties precisely
  4. Double counting of cost and benefits must be avoided

Forecasting techniques:

  1. Business Forecasting is Usually Wrong
  2. Business forecasting is more accurate for smaller time periods
  3. The business forecast must include an estimate of error
  4. The forecast must rely on historical data and external environmental factors (Li et al., 2017)
  5. The forecasting will require collection and analysis of data
  • Internal control, including statutory requirements
  1. Separation of Duties
  2. Accounting System Access Controls
  3. Physical Audits of Assets
  4. Standardized Financial Documentation (Dawes et al., 2016)
  5. Daily or Weekly Trial Balances
  6. Periodic Reconciliations in Accounting Systems
  7. Approval Authority Requirements
  • Risk management and budgetary control

Risk management:

  1. Risk identification,
  2. Risk analysis,
  3. Risk control,
  4. Risk financing (Olechowski et al., 2016)
  5. Claim Management

Budgetary control:

  1. Responsible fiscal management
  2. Clear lines of accountability
  3. Flexibility to respond to short-term challenges and plan for a long-term vision (Prinsloo et al., 2018)
  4. Good financial information
  5. Stability in the decision-making process
  6. Explain organizational structures and lines of management authority

Organizational structures:

An organizational structure is a system that outlines how certain activities are directed in order to achieve the goals of an organization. These activities can include rules, roles and responsibilities. The organizational structure also determines how information flows from level to level within the company (Kerzner and Kerzner, 2017).

Lines of management authority:

The chain of command within an organization that confers the power to order subordinates to perform a task within their job description. The line of authority within a business establishes who is in charge of giving who orders, and it contributes to the efficient attainment of the company’s objectives when property is used (Katsikea et al., 2015).

Assessment 2

Task 1

YearNew joinersNumber of Members after renewalRevenues First Class lounge Total revenue
150005000 $       25,00,000 $                2,00,000 $              27,00,000
250007500 $       35,00,000 $                3,00,000 $              38,00,000
350007500 $       35,00,000 $                3,00,000 $              38,00,000
450007500 $       35,00,000 $                3,00,000 $              38,00,000
550007500 $       35,00,000 $                3,00,000 $              38,00,000
650007500 $       35,00,000 $                3,00,000 $              38,00,000


Operational Costs Cost of cardInsurance costAdministrative fee pay to airlineOverdraft interest Total cost
 $                  4,75,000 $                2,50,000 $                       20,000 $                 10,00,000 $                         5,000 $       17,50,000
 $               12,45,000 $                    15,000 $                3,80,000 $                       30,000 $                 10,00,000 $                         5,000 $       26,75,000
 $                  1,44,000 $                    15,000 $                3,80,000 $                       30,000 $                 10,00,000 $                         5,000 $       15,74,000
 $                  1,72,800 $                    15,000 $                3,80,000 $                       30,000 $                 10,00,000 $                         5,000 $       16,02,800
 $                  2,07,360 $                    15,000 $                3,80,000 $                       30,000 $                 10,00,000 $                         5,000 $       16,37,360
 $                  2,48,832 $                    15,000 $                3,80,000 $                       30,000 $                 10,00,000 $                         5,000 $       16,78,832
 $                    15,000


Cash flowPV factorPresent value
 $       9,50,0000.909 $          8,63,636
 $     11,25,0000.826 $          9,29,752
 $     22,26,0000.751 $       16,72,427
 $     21,97,2000.683 $       15,00,717
 $     21,62,6400.621 $       13,42,829
 $     21,21,1680.564 $       11,97,344
Total present value $       75,06,706
 Marketing research cost $          2,00,000
NPV $       73,06,706

Decision: Net present values provides the present value of net cash flow means the difference between the cash inflows and cash outflows for a particular investment in present.

This investment appraisal method includes the time value of money to provide the reliable and valid decisions for the investment. If the net present value is positive and higher than it is beneficial or profitable of the company or individual to invest in that particular project. In this context, the net present value obtained is positive and higher ($7306706).

So, it can be stated that this project will be feasible for the company to invest due to positive and high net present value (Žižlavský, 2014). In relation to this, GC Ltd should proceed with the project and set up the internet business as it will be profitable for the company to generate the adequate returns for its shareholders and make returns on investment.

Task 2

CL Ltd is a small company and is intended to expand its business by developing a new type of contact lens requiring further finance of $1.5 million. For this, it is expected to use a mix of debt and equity finance to arrange the required fund. The following are the five factors that need to be taken into account when deciding on the mix of debt and equity finance:


Control is one of thesignificant factors that need to be considered when deciding on the mix of debt and equity finance. Issuing additional shares in equity option may result in dilution of control among the existing shareholders or owners. So if the firm is intended to have more control, then it will prefer more debt financing as compared to equity financing (Gbandi and Amissah, 2014). Owners of the company are five stakeholders and they may likely not to lose control of their business as they will consider equity financing up to a certain level.


Cost of capital is a major factor in deciding the mix of the debt and equity for financing the project. It is because it is mandatory for the organization to keep the cost of capital low that raises the need to consider the costs of the using equity or debt. In equity, the cost is related to the dividends paid to the shareholders while in debt, the cost is related to the interest on principle amount paid to the bank and origination fees and brokers’ fees (Brealey et al., 2012). So, it is crucial for the company to decide the proper mix of debt and equity which could be effective to reduce the cost of capital.

Repayment terms

Repayment terms are also a major factor deciding the mix of debt and equity for financing the project. It shows the time period in which the company wants to repay the amount taken from debt or equity option. In debt option, it is required for the firm to choose the repayment period like 1-2 years or 5-10 years or more, but in the equity option, it is not required to repay the amount but needs to pay dividends to the shareholders regularly (Fatoki, 2014). So, repayment will decide the mix of the debt and the equity in capital needed for the company in this project.

Financing Requirements

It is also required to consider financing requirements in deciding the mix of debt and equity. These are the requirements that are placed by the lender and investor on applicants. If the individual fulfils these requirements, then he/she can arrange the finance. Common financing requirements include credit score requirements and specific financial ratio tests as all these requirements need to be considered while deciding the mix of debt and equity in capital (Gbandi and Amissah, 2014).


Risk is a crucial factor that needs to be considered in deciding the mix of debt and equity for the financing this project for the company. Debt is considered less risky as compared to equity because the firm needs to protect the investors in the debt option while in the equity option; there is high risk to the investors or shareholders. So, if the firm wants to protect its investors as it will invest through debt option (Brealey et al., 2012).

Assessment 3

1.     Define the following terms:

  • Assess – Assess term can be defined as the checking, measuring, validating, evaluating and ensuring for investigation and understanding all factors related to a situation in correct way (Fourie et al., 2015).
  • Break-even Quantity –This refers to the quantity of the products generated from the investment to sell before the amount gained equals investment amount.

BEQ = Fixed costs / (Average price per unit – average cost per unit)

  • Capital – Capital can be referred as money used to purchase raw materials and goods effectively generate income.It is the money for investing into the organization to generate more income and wealth by improving and growing the business(Horngren et al., 2010).
  • Cash flow – Cash flow is the amount of money that flows into and out of the organisation during different cycles.
  • Debt to Equity Target – A debt to equity target is the organisations desired ratio that shows the safe option for the company to be in debt to at any one time.
  • Financial decision making –The decision making for selecting financing options to meet the fund requirements based on factual informative information (Gitman et al., 2015).
  • Long term debt –The debt that is paid out over a long period of time from longer than 1 year up to 30 years.
  • Organisational objectives – Organisational objectives are the goals and missions of the organisation.
  • Short term debt –The debt that is paid out within one year.
  • Start-up costs – The costs are needed to effectively set up and commence delivering products or services effectively.

2.     Discuss calculating the weighted cost of Capital.

WACC = E/V x RE + D/V x Rd x (1-Tc) (Gitman et al., 2015)


  • Cost of equity = Re
  • Cost of debt = Rd
  • Firm Equity as market value = E
  • Firms debt at market value = D
  • V = E + D
  • Percentage of equity financing = E/V
  • Percentage of debt financing = D/V
  • Corporate Tax rate = Tc

3.     List four types of assets or liabilities.

  • Inventory
  • Cash
  • account receivables
  • Plant

4.     What might long -term and short -term periods be based around?

  • Long term: more than 1 year to 30 years
  • Short-term: Within 1 year

5.     Discuss the three sections that a cash flow statement is divided into.

  1. Cash flow generated from operating activities: It shows the cash goes into and out of the business as a result of routine business activities including sales and general expenses (Garrison et al., 2010).
  2. Cash flow generated from investments: It shows the cash goes into the business as a result of the sale of non-current assets.
  3. Cash flow from financing actions: It shows the cash goes into and out of the business as a result of financing activities including payment and payouts.

6.     Identify four different types of long-term financing options.

  • Grants
  • Business loans
  • Investors (Horngren et al., 2010)
  • Lines of credit

7.     List at least six of the questions you will need to ask when analyzing past, current or future investments.

  • Which types of investment would be most beneficial?
  • What are the options for investment available to the organisation?
  • What is the cost of potential investments?
  • What are the benefits of potential investments?
  • What are the risks of potential investments?
  • Can these risks be reasonable managed?

8.     What are internal controls designed for?

Internal controls are designed for ensuring the financial decision making based on accurate information and decision making within the business accordance with the organisations goals and objectives. These controls are designed for supporting in risk mitigation and making the assets and profits safe and preventing fraud or error and promoting good management and compliance (Hoyle et al., 2015). It also ensures the correct financing reporting and supports in error detection.

9.     Short -term and long -term objectives may include what?

  • Debt retirement
  • Dividends
  • Periodic payments such as:
  • Leases
  • Loans
  • Salaries and other employee obligations (Fourie et al., 2015)
  • Superannuation
  • Taxation payments

10.  How must financial records be maintained?

  • Referencing and checking data sources with actual data
  • Cross-checking data against each other
  • Reviewing processes and approval used to collect and maintain data
  • Data-analysis reviews(Horngren et al., 2010)
  • Checking against legislation


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