This unit requires the application of skills and knowledge required to evaluate an organisations financial performance. The unit encompasses evaluating returns to operations, determining long and short term needs and reviewing performance.
This unit can be applied to all sectors with the financial services industry and has application to those job functions that have responsibility for determining the organisations financial performance such as an accountant.
This unit requires the application of skills and knowledge required to evaluate an organisations financial performance. The unit encompasses evaluating returns to operations, determining long and short term needs and reviewing performance.
This unit can be applied to all sectors with the financial services industry and has application to those job functions that have responsibility for determining the organisations financial performance such as an accountant.
Not applicable.
Elements and Performance Criteria | |||
Element | Performance Criteria | ||
1 | Evaluate returns to operations | 1.1 | Cash flow and profitability patterns are trended to identify current position and expected returns from investments and projected operations |
1.2 | Averaged returns are disaggregated to assess strengths and weaknesses in organisational performance | ||
1.3 | Investment returns are evaluated against risk, profit and capital budget requirements | ||
2 | Determine short and long term needs | 2.1 | Resources required by organisation to meet short and long term obligations are identified and costed using standard financial analysis techniques |
2.2 | Financial priorities are established and reviewed based on reported performance and identified trends, organisational objectives and expected returns to operations and investments | ||
2.3 | Financial options review and analyse a range of possible assets and liabilities to optimise the capital mix required to support operations and trading need | ||
2.4 | Organisational policies and procedures for expenditures and investments are evaluated to ensure relevance to changing personnel profiles | ||
2.5 | Debt to equity targets are analysed in terms of organisation's expected performance and established in line with organisational objectives using standard accounting techniques | ||
3 | Review performance | 3.1 | Forecasts are justifiable given observed trends, information, events and assumptions |
3.2 | Standard errors are calculated to produce levels of accuracy suitable for planning purposes | ||
3.3 | Forecasts are reviewed regularly in line with actual performance and alternative sources of information | ||
3.4 | Risk strategies are assessed for long term viability and harmonised with short term goals and obligations | ||
REQUIRED KNOWLEDGE&SKILLS |
Knowledge requirements include: principles of cash flow and budgetary control principles of cost-benefit analysis and use of forecasting techniques principles of internal control (including statutory requirements) capacity to establish long and short term plans (eg SWOT analysis) principles of risk management duties of auditors financial legislation (eg taxable transactions, reporting requirements) ethical considerations for compliance understanding of organisational structures and lines of management authority |
Skills requirements include: planning skills for timetabling and scheduling reports and lodgements recording, gathering and consolidating financial information researching and identifying applicable accounting standards and decisions interpersonal skills and communication skills (eg liaising, listening, consulting) report writing and preparation numeracy skills for calculation of data statistics |
EVIDENCE GUIDE | |
Assessment of performance requirements in the unit should be undertaken in an industry context. The Evidence Guide identifies the critical aspects, knowledge and skills to be demonstrated to confirm competency for the unit. Competency is demonstrated by performance of all stated criteria including the Range Statement applicable to the workplace. | |
Overview of assessment requirements | |
To achieve competency in this unit, a person must be able to demonstrate: knowledge of standard financial analysis techniques knowledge of standard accounting techniques knowledge of organisational polices and procedures ability to evaluate returns to operations ability to determine long and short term needs ability to review performance | |
Critical aspects of evidence | |
Evidence required for demonstration of consistent performance: | Competence in this unit must be assessed over a period of time in order to ensure consistency of performance over the Range Statement and contexts applicable to the work environment. |
Delivery/assessment relationship to other units: | Prerequisite units: FNSACCT503B Manage budgets and forecasts. |
Assessment requirements | |
Method of assessment: | For valid and reliable assessment of this unit, evidence should be gathered through a range of methods to indicate consistent performance. Assessment of this unit of competence will usually include observation of processes and procedures, oral and/or written questioning on underpinning knowledge and skills and other methods as required. |
Context of assessment: | Assessment of performance requirements in this unit should be undertaken within the financial services industry context and should cover aspects of personal/financial responsibility and accountability. Aspects of competency, including the attainment of relevant knowledge and skills, may be assessed in a relevant workplace, a closely simulated work environment, or other appropriate means that clearly meet industry competency requirements. |
Resources required for assessment: | Assessment of this unit of competence requires access to suitable resources to demonstrate competence. Assessment instruments, including personal planner and assessment record book. Access to registered provider of assessment services. |
The Range Statement relates to the unit of competency as a whole. It allows for different work environments and situations that will affect performance. The following variables may be present with training and assessment depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts. If bold italicised text is shown in Performance Criteria, details of the text are provided in the Range Statement. | |
Strengths and weaknesses may include: | cash flow schedules budget estimates financial monitoring unit costs revenue forecasts internal control compliance |
Short and long term obligations may include: | debt retirement salaries periodic payments (eg leases, loans) taxation payments superannuation dividends capital structure decisions |
Standard financial analysis techniques may include: | cost-benefit analysis 'what if' analysis time series bivariate and multivariate analysis break even analysis |
Financial priorities may include: | sales targets revenue estimates rates of returns cost minimisation (capital and recurrent costs) periodic monitoring and transparency of expenditure |
Investments may include: | property shares and securities, preference shares debentures plant and equipment interest bearing accounts |
Financial options may include: | cost recoveries budget absorption purchases adjustment of borrowings asset liquidation long term investments expenditure re-prioritisation equity injections |
Assets and liabilities may include: | property investments shares, bonds, securities loans, leases, debts plant and equipment personnel cash investments |
Organisational policies and procedures may include: | price and exchange parameters reporting requirements financial analysis assessments recording and filing systems standard financial analysis techniques financial management manuals |
Standard accounting techniques may include: | discounted cash flows deprival asset valuations rates of return pay back periods impact statements pro-rata and percentage apportionment direct allocation break-even analysis |
Risk strategiesmay include: | quantification of risks periodic reporting decision making authorities policy statements forecasting comparative analysis capital structure |
Not applicable.
The required outcomes described in this unit of competency contain applicable facets of employability skills. The Employability Skills Summary for the qualification in which this unit of competency is packaged, will assist in identifying employability skills requirements.
The required outcomes described in this unit of competency contain applicable facets of employability skills. The Employability Skills Summary for the qualification in which this unit of competency is packaged, will assist in identifying employability skills requirements.
Not applicable.