BSBFIM601- Financial Systems and Financial Management Assignment Help

The Financial system-

Acts as a mediator incorporate in between the accounting of the transactions and the management of the company. Financial systems account for daily accounting transactions in an effective way that the information flows accurately and effectively to the users of the information, mainly management. The effective financial system account for required controls in between to ensure the proper segregation of duties is in place to prevent any error or fraud. Effective financial system also provides the required forecast and analyzes performance apart from preparing the financial statements.

BSBFIM601 a manage finance sample of Victoria University may define various information and abilities based on planning, predicting, accounting policies, and directing personnel to accomplish the desired business objectives based on economic proposals and forecasts and budget control. People who have taken this course may develop new approaches to distributing cash and commenting on economic transactions. The research, on either side, is for persons who are responsible for economic reporting and obligations, such as the administration of budget across various business divisions. This research covers all aspects of financial management assignment and is backed up by a team of corporate finance experts. The research also aims to strengthen and expand skill competency within defined boundaries by the performance standards. 
This course also required students to complete work based on the real implementation of task evidence-based competency objectives regularly. Professionals and children will be admitted if they can demonstrate their roles in financial management, such as establishing various cash flows and aging summaries, analyzing accounts, and generating amended budgets that are in place and enforced. Professionals from a variety of backgrounds can take this course and fulfill all financial control regulatory requirements.

Financial management -

Effective financial management (panelC.Zopounidis, 1999) ensures the effective procurement and utilization of the funds, dues are paid in a timely manner, cash flows are flowing positively, and results and performance of the company are sound. It also means the effective planning and controlling of all the financial activities of an organization. Major financial and investment decisions are based on effective financial management. Investment decision like purchase of fixed assets, acquiring the stake of any other entity will be part of it. Financial decision is the procurement of the funds from the different sources in a cost-effective manner and utilization of funds in an efficient way. Dividend payment and retaining of the profits for future expansion and growth are also integral part of the financial management. The major objectives of the financial managers are –

1. Funds re properly supplied across the departments smoothly and efficiently.

2. Shareholders are getting a proper return on their invested amount.

3. Funds to be procured at the least cost possible.

4. Investments are made in a safe venture.

5. Effective composition of the capital which means ensuring the proper composition of the equity and debt funds.

Portfolio of evidence showing the plan of financial management

Effective financial management ensures the revenue is over the total cost, dues are paid on time, efficient procurement and utilization of the funds, cash flows are positive.

Below is the one liv example of CGI Inc – its performance results based on its effective managing of the finances.

Below table shows the profit or loss from its continuing operation in 2019 and 2018 –

From the above, it is cleared that the company is generating a sound profit in the current competitive environment and finance cost is also very less as compared to the size of the profit and revenue.

Net cash flows from the operating activities –

Cash flows from the operations are positive and has also increased in 2019 by $1.4M.

Overall, closing cash balances from the cash and cash equivalents –

Cash and cash equivalents have increased by $18M due to the positive operating cash flows.

Third-party workplace reports of on-the-job performance

In today globalized and competitive environment, many of the activities are outsourced to third party vendors like payroll processing, various account keeping work to reduce cost and management can focus on the core business activities.

At the same time, employers are taking report from the third party on the workplace improvement and job performance. These reports will help the management and leadership to identify any conflict of interest prevailing, reason for the attritions, increase employee morale and productivity, understanding the gap between employee and management or any biasedness due to any of the reason in the workplace. The management can work on the report to improve the overall job performance across the organizations.

Performance review results

Performance of the company effective financial management can be done through analysis if the financials through ratios, horizontal and vertical analysis, comparison of the budgeted vs actual figures and so.

Below we have done the various ratio analysis to understand the performance of the Company over the three years period. Ratio analysis help in analyzing the profitability, liquidity and solvency of the company.

Ratios	Calculation formula	2018	2017	2016
Liquidity ratio
Current ratio	Current assets/current liabilities	0.995	1.060	1.153
Quick ratio	Cash, marketable securities and receivables/current liabilities	0.538	0.540	0.619

Liquidity measures the short-term debt paying ability. It is decreasing over years though at a minimal rate which signifies the overall debt paying capacity are getting reduced at a slow rate.

 

Leverage ratio		2018	2017	2016
Debt/Equity ratio	Total debt/ shareholder equity	0.783	0.837	0.809
debt ratio	Total debt/total assets	0.439	0.456	0.447
TIE ratio	Income before interest income and tax/Interest expenses	20.40	20.29	19.15

Leverage shows creditors the corporation ability to sustain losses. Its decreasing over time though at a slow rate but it’s a good sign for the overall debt paying capacity.

 

Profitability ratio		2018	2017	2016
Profit margin	Net income/net sales	9.92%	9.55%	10.00%
Return on assets	Net income/average total assets	9.79%	8.97%	9.10%
Return on equity	Net income/average common stockholder equity	17.71%	16.34%	17.04%

Profit margin has remained same over the years, tough the return on total assets and ownership equity has increased a bit.

Overall, the performance is good as observed from the above ratio analysis.

Reviews relating to budgets

The budget (Kihn, 2011)can be used to monitor the financial performance of the organization because it tells us how much we are spending; how much we are profiting and where we should spend less than last year. It tells us if we are receiving enough to deal with the expenses and if we are profiting to ourselves. So, with this, we can monitor the financial performance of the organization.

7The budget I’ve done can contributes to financial management as it has been tried to reduce all the non-value-added cost and maximize profit for the shareholders.

Reviewing of the profit and loss, cash flow statement and ageing

Let’s see the (Inc, 2018)profit and loss statement, cash flow statement and ageing details of the company one by one with its analysis –

Profit and loss (in 000)–

• Revenue of the company has increased by $650M

• Finance cost is very less as compared to the size of the business and revenue.

• Net earning of the profit has also increased by 4100M around in 2018, thus, the EPS has also increased.

Cash flow statement –

Overall, cash and cash equivalents balance has increased by $18M in 2019.

Cash flow from operating activities has been positive due to better collection period and sales turnaround time.

Cash flow from investing activities has been negative due to purchase of PPE, intangible assets and further investments.

Cash flow from financing activities has been negative due to purchase and cancellation of class A subordinate shares.

Ageing analysis -

The following table shows the ageing of the account receivable reported at the Balance sheet –

Ageing over 90 days has increased by around $9 M and over 60 days by around $ 8M.

Overall, allowance with respect to total receivables has not changes, so the credit risk of the receivable is not affected in the current year.

Maintenance of audit trails

Audit trails signify good internal control prevailing in the Company. Nowadays, audit trails have moved from manual to electronics. Presence of audit trails make the information more reliable for the reader of the information as it can identify and control failure in between the processing of the data and transactions.

Audit trails also can identify is there is any noncompliance of the statutory requirement and if the Sops of the company is violated by red flagging.

IT plays a very vital role in the successful functioning and implementation of the audit trails/

Current accounting package like Sap, oracle has an inbuilt audit trails that identify and control failure, wrong processing of the transactions and violation of the segregation of the duties policies.

It improves risk management capacity of the company by examining the activities and providing the end reports to the final users. 

At CGI, Sap are sued which ensures the effective audit trails.

Reviews of recommendations prepared to ensure the financial viability

Overall, the financial performance of the CGI inc is sound, its businesses are growing, profitability margin has been good, return on total assets and equity has increased, leverage ratios have become stronger as the company must rely on lesser outside capital. The company has an efficient financial management in lace as it is understandable from the income statement where the finance cost is very manageable, positive profit and cash flows also validates it.  The Company also has an effective audit trails system put in place which put better control in place to prevent, detect and correct any control failure.

Overall the recommendation of the financial management and system is positive as observed from the above analysis.

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References

Inc, M. o. C., 2018. CGI annual report. [Online]
Available at: https://www.cgi.com/sites/default/files/2018-12/cgi-2018-annual-report.pdf
[Accessed 17 May 2020].

Kihn, L., 2011. How do controllers and managers interpret budget targets?. Journal of Accounting & Organizational Change, 7(3), pp. 212-236.

panelC.Zopounidis, A. l. o. o., 1999. Multicriteria decision aid in financial management. European Journal of Operational Research, 119(2), pp. 404-415.

Appendix

Abstract of the assets and liabilities figures from the Balance Sheet of the CGI inc is as for ratio analysis  –