Assesment 1 – BSBFIM501A Coles

BSBFIM501 Assessment 1 Manage Budgets and Financial Plans

Provide an overview of the organisation and your business unit

Coles Supermarkets Australia Pty Ltd, trading as Coles, is an Australian supermarket chain owned by Wesfarmers.

Founded in 1914 in Collingwood, Melbourne by G.J. Coles, Coles operates 776 supermarkets throughout Australia, including several BI-LO Supermarkets. Coles has over 100,000 employees and, together with rival Woolworths, accounts for more than 80 per cent of the Australian market.

Identify the internal strategic goals for this organisation and the external stakeholders, and discuss their influence on the financial decisions in to your organisation

Discuss the different types of budgets your organisation is required to prepare and provide an explanation on how each budget is developed

Master BudgetA master budget is an aggregate of a company’s individual budgets designed to present a complete picture of its financial activity and health. The master budget combines factors like sales, operating expenses, assets, and income streams to allow companies to establish goals and evaluate their overall performance, as well as that of individual cost centers within the organization. Master budgets are often used in larger companies to keep all individual managers aligned.

Operating BudgetAn operating budget is a forecast and analysis of projected income and expenses over the course of a specified time period. To create an accurate picture, operating budgets must account for factors such as sales, production, labor costs, materials costs, overhead, manufacturing costs, and administrative expenses. Operating budgets are generally created on a weekly, monthly, or yearly basis. A manager might compare these reports month after month to see if a company is overspending on supplies.

Cash Flow BudgetA cash flow budget is a means of projecting how and when cash comes in and flows out of a business within a specified time period. It can be useful in helping a company determine whether it’s managing its cash wisely. Cash flow budgets consider factors such as accounts payable and accounts receivable to assess whether a company has ample cash on hand to continue operating, the extent to which it is using its cash productively, and its likelihood of generating cash in the near future. A construction company, for example, might use its cash flow budget to determine whether it can start a new building project before getting paid for the work it has in progress.

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ue operating, the extent to which it is using its cash productively, and its likelihood of generating cash in the near future. A construction company, for example, might use its cash flow budget to determine whether it can start a new building project before getting paid for the work it has in progress.

Financial BudgetA financial budget presents a company’s strategy for managing its assets, cash flow, income, and expenses. A financial budget is used to establish a picture of a company’s financial health and present a comprehensive overview of its spending relative to revenues from core operations. A software company, for instance, might use its financial budget to determine its value in the context of a public stock offering or merger.

Static BudgetA static budget is a fixed budget that remains unaltered regardless of changes in factors such as sales volume or revenue. A plumbing supply company, for example, might have a static budget in place each year for warehousing and storage, regardless of how much inventory it moves in and out due to increased or decreased sales.

List the people, their roles and responsibilities in the organisation who are involved in the budget process (from planning to implementation). List the specific budget they are interested in.

Customers – feedback via letters, email and website.

Master Budget

Operating Budget

Cash Flow Budget

Financial Budget

Static Budget

Employees – various business involvement groups (such as the Community Involvement Committee and the Wesfarmers Indigenous Network), regular updates from the Group Managing Director.

Master Budget

Operating Budget

Cash Flow Budget

Financial Budget

Static Budget

Shareholders – annual general meeting, meetings with institutional investors, bi-annual investor briefings, quarterly retail sales briefings and other updates.

Master Budget

Operating Budget

Cash Flow Budget

Financial Budget

Static Budget

Suppliers – meetings with key industry groups, audit and review systems for responsible sourcing.

Master Budget

Operating Budget

Cash Flow Budget

Financial Budget

Static Budget

Government and regulators – meetings with state and federal government representatives, federal regulators, trade associations.

Master Budget

Operating Budget

Cash Flow Budget

Financial Budget

Static Budget

Non-government organisations – joint projects and initiatives, visits and meetings.

Master Budget

Operating Budget

Cash Flow Budget

Financial Budget

Static Budget

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