BTEC Assignment Brief Level-3 Student Name /ID Number Unit Number and Title Academic Year Unit Tutor Assignment Title Issue Date Submission Date IV Name & Date Submission Format 3: Business Finance 2021-2022 Zunaira Raza Money, Investigate, plan, improve! Dr Nasir Karim The submission is in the form of an individual written report. This should be written in a concise, formal business style using single spacing and font size 12. You are required to make use of headings, paragraphs and subsections as appropriate, and all work must be supported with research and referenced using the Harvard referencing system. Please also provide a bibliography using the Harvard referencing system. The recommended word limit is 3500 words, although you will not be penalized for exceeding the total word limit. Unit Learning Outcomes Learning Aim A: Explore types of business finance available at different stages in the growth of a business. Learning Aim B: Understand how financial planning tools can be used to analyse financial data and assess business risks Learning Aim C: Understand how financial statements for a sole trader are prepared and used to analyses and evaluate business performance Assignment Brief and Guidance Scenario As a budding entrepreneur, itching to start your own enterprise, you realize that you need to understand business finance. No enterprise is successful, if the entrepreneur that runs it does not understand finances i.e. where you can source finance from, where revenue can come from and how this links to the objectives, size and type of the enterprise that you are running. Looking to further your financial literacy skills. A sole trader has approached you and asked for your help. They want you to analyses the performance of their business, identifying the current business risks and suggest ways that their business performance could be improved. You realize this is a great opportunity for you to truly understand how financial information can help a business monitor and improve their performance including how to prepare a formal financial report. Choose a sole trader of your choice, but ensure you can have access to the appropriate financial data. Write a title for your report and an introduction to the business. You will need to write a report (as this is also an important skill for an entrepreneur) to present your findings. Learning Aim A: Explore types of business finance available at different stages in the growth of a business Task 1: You will need to research the different sources of finance and revenue that are available to different businesses: Of differing sizes (e.g. small, medium, large) At different stages of development (e.g. start-up, sole trader, partnerships, private and public limited etc) That have different business objectives (e.g. expand, to develop products, to develop in new markets, to relocate etc) That offer different products (e.g. goods or services or both) That operate in different sectors (e.g. retail, electronics, health etc) In your report, you must include the following for the different businesses at the different stages of their development: An explanation of the features of different internal and external sources of finance that are available How different sources of internal and external finance can be accessed An explanation of how the features of the different internal and external sources of finance influence the decisions made An explanation of the different sources and suitability of revenue that is available An analysis of the similarities and differences in the approach taken by the different businesses to securing business finance. The advantages and disadvantages, including the business risks, of the different types of internal and external sources of finance A judgement on how far different types of internal and external business finance meet the requirements An evaluation of how far the different types of internal and external finance meet the needs of the different businesses. A conclusion determining the most appropriate types of business finance for the different businesses at different stages of their development. P1 Explain sources and suitability of finance available in different business contexts P2 Explain sources and suitability of revenue available in a specific business context. M1 Analyse the types of business finance required in a specific business context D1 Evaluate appropriate types of business finance applicable in a specific business context. Learning Aim B Understand how financial planning tools can be used to analyse financial data and assess business risks Task 2: Financial report must include: An explanation of the purpose of: o Cash flow forecasts and statements o Break even analysis for the selected sole trader An accurate cash flow forecast and statement and a break-even chart and calculation Calculations and in-depth analysis using data from the sole trader’s cash flow forecasts and statements and break even, to identify risks to the business. You should demonstrate your understanding of common risks e.g. an increase in fixed or variable costs, a reduction in selling price, decline in sales revenue etc A detailed examination of the factors that impact on the business risks. A broad range of conclusions and actions that the business could take to address these risks, based on the analysis of your calculations P3 Explain the purpose of financial planning tools in reviewing financial data in a specific business context P4 Perform appropriate calculations using financial planning tools to identify financial risks in a specific business context. M2 Analyse the factors that impact on financial risks in a specific business context. D2 Evaluate the impact of different factors that impact on financial risks in a given business context. Learning Aim C Understand how financial statements for a sole trader are prepared and used to analyses and evaluate business performance. Task 3: Financial report must include: An explanation of the purpose and the main components for sole traders of: o Statements of comprehensive income o Statements of financial position Using the financial data from the sole trader, you must prepare an accurate: o Statement of comprehensive income o Statement of financial position These must be professionally accepted and in a vertical format For both of the above statements, you need to make adjustments for: o Depreciation o Prepayments o Accruals o Changes in capital Accurate ratio calculations (measuring profitability, liquidity and efficiency), using data you have extracted from the above statements An analysis of the business’s performance i.e. a detailed examination of the ratio calculations A wide range of justified recommendations for improving the business’s performance, based on the outcomes of the ratio analysis. P5 Prepare and interpret financial statements for sole trader businesses. P6 Explain ways to improve profitability, liquidity and efficiency in a given business context M3 Assess business performance of a sole trader by manipulating financial data and making suggestions for improving business performance D3 Justify recommendations for improvements to business performance for a sole trader, arising from own preparation and interpretation of business financial data Grading Criteria Learning Aim A: Explore types of business finance available at different stages in the growth of a business. Pass P1 Explain sources and suitability of finance available in different business contexts P2 Explain sources and suitability of revenue available in a specific business context. B: Understand how P3 Explain the financial planning purpose of financial tools can be used to planning tools in analyse financial data reviewing financial and assess business data in a specific risks business context C: Understand how financial statements for a sole trader are prepared and used to analyses and evaluate business performance Merit M1 Analyse the types of business finance required in a specific business context Distinction D1 Evaluate appropriate types of business finance applicable in a specific business context. M2 Analyse the factors that impact on financial risks in a specific business context. D2 Evaluate the impact of different factors that impact on financial risks in a given business context. M3 Assess business performance of a sole trader by manipulating financial data and making suggestions for improving business performance D3 Justify recommendations for improvements to business performance for a sole trader, arising from own preparation and interpretation of business financial data P4 Perform appropriate calculations using financial planning tools to identify financial risks in a specific business context. P5 Prepare and interpret financial statements for sole trader businesses. P6 Explain ways to improve profitability, liquidity and efficiency in a given business context.
