AHCAGB604A
Analyse business performance

This unit covers the process of analysing business performance for an agricultural or horticultural enterprise and defines the standard required to: analyse financial reports; use financial analysis tools; identify profit drivers for the enterprise; benchmark business performance against other businesses; and develop strategies for improving business performance.

Application

This unit applies to analysing financial reports, using financial analysis tools, identifying profit drivers for the enterprise and developing strategies for improving business performance.


Elements and Performance Criteria

ELEMENT

PERFORMANCE CRITERIA

1. Analyse financial reports

1.1. Taxation reports are correctly interpreted and accounts are determined to be true and fair.

1.2. Management reports generated by the enterprise are reviewed and interpreted.

1.3. Distribution of profit is determined.

2. Use financial analysis tools

2.1. Gross margins and relevant breakdowns of profit and loss are calculated.

2.2. Ratios related to production activity, solvency and liquidity, gearing and profitability are calculated.

2.3. Relevant performance benchmarks are sourced and compared to the enterprise.

2.4. Trends in production and profitability are identified and analysed.

3. Identify opportunities for increasing profit

3.1. Yield/production potential is assessed and current position determined.

3.2. Key issues related to production efficiency are identified.

3.3. Key issues related to market return are identified.

4. Develop strategies for improving business performance

4.1. Strengths, Weaknesses, Opportunities and Threats (SWOT) approach is used to determine possible strategies for addressing production and marketing issues.

4.2. Sensitivity analyses are performed to evaluate strategies.

Required Skills

Required skills

analyse financial reports

use financial analysis tools

identify profit drivers for the enterprise

develop strategies for improving business performance

use literacy skills to fulfil job roles as required by the organisation. The level of skill may range from reading and understanding documentation to completion of written reports

use oral communication skills/language competence to fulfil the job role as specified by the organisation, including questioning, active listening, asking for clarification, negotiating solutions and responding to a range of views

use numeracy skills to estimate, calculate and record complex workplace measures

use interpersonal skills to work with others and relate to people from a range of cultural, social and religious backgrounds and with a range of physical and mental abilities.

Required knowledge

financial reports

financial analysis tools

performance benchmarking

issues related to production efficiency and marketing

SWOT analysis and developing business strategies.

Evidence Required

The evidence guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, range statement and the Assessment Guidelines for the Training Package.

Overview of assessment

Critical aspects for assessment and evidence required to demonstrate competency in this unit

The evidence required to demonstrate competency in this unit must be relevant to workplace operations and satisfy holistically all of the requirements of the performance criteria and required skills and knowledge and include achievement of the following:

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.

Context of and specific resources for assessment

Competency requires the application of work practices under work conditions. Selection and use of resources for some worksites may differ due to the regional or enterprise circumstances.


Range Statement

The range statement relates to the unit of competency as a whole.

Financial analysis tools and reporting systems applied may include:

the range of primary production and related business activities.


Sectors

Unit sector

Agribusiness


Employability Skills

This unit contains employability skills.


Licensing Information

Not Applicable