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Elements and Performance Criteria

1. Analyse financial reports
   • Interpret taxation reports and determine accounts to be true and fair
   • Review and interpret management reports generated by the enterprise
   • Determine distribution of profit
2. Use financial analysis tools
   • Calculate gross margins and relevant breakdowns of profit and loss
   • Calculate ratios related to production activity, solvency and liquidity, gearing and profitability
   • Source and compare relevant performance benchmarks
   • Identify and analyse trends in production and profitability
3. Identify opportunities for increasing profit
   • Assess yield or production potential and determine current position
   • Identify key issues related to production efficiency
   • Identify key issues related to market return
4. Develop strategies for improving business performance
   • Use Strengths, Weaknesses, Opportunities and Threats (SWOT) approach to determine possible strategies for addressing production and marketing issues
   • Perform sensitivity analyses to evaluate strategies

Range Statement

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Performance Evidence

The candidate must be assessed on their ability to integrate and apply the performance requirements of this unit in a workplace setting. Performance must be demonstrated consistently over time and in a suitable range of contexts.

The candidate must provide evidence that they can:

analyse financial reports

use financial analysis tools

identify profit drivers for the enterprise

benchmark business performance against other businesses

develop strategies for improving business performance.

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Knowledge Evidence

The candidate must demonstrate knowledge of:

financial reports

financial analysis tools

performance benchmarking

issues related to production efficiency and marketing

SWOT analysis and developing business strategies.

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