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Evidence Guide: AHCAGB605 - Manage business capital

Student: __________________________________________________

Signature: _________________________________________________

Tips for gathering evidence to demonstrate your skills

The important thing to remember when gathering evidence is that the more evidence the better - that is, the more evidence you gather to demonstrate your skills, the more confident an assessor can be that you have learned the skills not just at one point in time, but are continuing to apply and develop those skills (as opposed to just learning for the test!). Furthermore, one piece of evidence that you collect will not usualy demonstrate all the required criteria for a unit of competency, whereas multiple overlapping pieces of evidence will usually do the trick!

From the Wiki University

 

AHCAGB605 - Manage business capital

What evidence can you provide to prove your understanding of each of the following citeria?

Assess the capital needs of the business

  1. Determine working capital and capital requirements for development
  2. Determine return on capital or opportunity cost of development capital
Determine working capital and capital requirements for development

Completed
Date:

Teacher:
Evidence:

 

 

 

 

 

 

 

Determine return on capital or opportunity cost of development capital

Completed
Date:

Teacher:
Evidence:

 

 

 

 

 

 

 

Assess appropriate equity levels for the business

  1. Assess risks associated with the business
  2. Identify personal and business risk preferences
  3. Analyse equity levels in comparable enterprises using benchmark data
Assess risks associated with the business

Completed
Date:

Teacher:
Evidence:

 

 

 

 

 

 

 

Identify personal and business risk preferences

Completed
Date:

Teacher:
Evidence:

 

 

 

 

 

 

 

Analyse equity levels in comparable enterprises using benchmark data

Completed
Date:

Teacher:
Evidence:

 

 

 

 

 

 

 

Establish and maintain appropriate financing arrangements for the business

  1. Determine capacity to service debt and meet liabilities
  2. Sources of funds are identified and terms and conditions compared and evaluated
  3. Conduct negotiations to ensure the establishment of the most favourable terms and conditions
  4. Source loan funds and check agreements
  5. Monitor costs of finance to keep them within defined budget limits
  6. Manage relationships with finance providers
  7. Monitor the economic environment and assess implications for the business
Determine capacity to service debt and meet liabilities

Completed
Date:

Teacher:
Evidence:

 

 

 

 

 

 

 

Sources of funds are identified and terms and conditions compared and evaluated

Completed
Date:

Teacher:
Evidence:

 

 

 

 

 

 

 

Conduct negotiations to ensure the establishment of the most favourable terms and conditions

Completed
Date:

Teacher:
Evidence:

 

 

 

 

 

 

 

Source loan funds and check agreements

Completed
Date:

Teacher:
Evidence:

 

 

 

 

 

 

 

Monitor costs of finance to keep them within defined budget limits

Completed
Date:

Teacher:
Evidence:

 

 

 

 

 

 

 

Manage relationships with finance providers

Completed
Date:

Teacher:
Evidence:

 

 

 

 

 

 

 

Monitor the economic environment and assess implications for the business

Completed
Date:

Teacher:
Evidence:

 

 

 

 

 

 

 

Monitor and review the mix of liabilities

  1. Conduct regular reviews of the mix of liabilities and the costs and determine the benefits associated with reconfiguring loans
  2. Review and renegotiate loans as appropriate
Conduct regular reviews of the mix of liabilities and the costs and determine the benefits associated with reconfiguring loans

Completed
Date:

Teacher:
Evidence:

 

 

 

 

 

 

 

Review and renegotiate loans as appropriate

Completed
Date:

Teacher:
Evidence:

 

 

 

 

 

 

 

Monitor equity, return on equity

  1. Review valuations on assets and monitor the effect on equity
  2. Calculate returns on assets and returns on equity and use to assist business performance
Review valuations on assets and monitor the effect on equity

Completed
Date:

Teacher:
Evidence:

 

 

 

 

 

 

 

Calculate returns on assets and returns on equity and use to assist business performance

Completed
Date:

Teacher:
Evidence:

 

 

 

 

 

 

 

Assessed

Teacher: ___________________________________ Date: _________

Signature: ________________________________________________

Comments:

 

 

 

 

 

 

 

 

Instructions to Assessors

Evidence Guide

Element

Performance criteria

Elements describe the essential outcomes.

Performance criteria describe the performance needed to demonstrate achievement of the element.

1. Assess the capital needs of the business

1.1 Determine working capital and capital requirements for development

1.2 Determine return on capital or opportunity cost of development capital

2. Assess appropriate equity levels for the business

2.1 Assess risks associated with the business

2.2 Identify personal and business risk preferences

2.3 Analyse equity levels in comparable enterprises using benchmark data

3. Establish and maintain appropriate financing arrangements for the business

3.1 Determine capacity to service debt and meet liabilities

3.2 Sources of funds are identified and terms and conditions compared and evaluated

3.3 Conduct negotiations to ensure the establishment of the most favourable terms and conditions

3.4 Source loan funds and check agreements

3.5 Monitor costs of finance to keep them within defined budget limits

3.6 Manage relationships with finance providers

3.7 Monitor the economic environment and assess implications for the business

4. Monitor and review the mix of liabilities

4.1 Conduct regular reviews of the mix of liabilities and the costs and determine the benefits associated with reconfiguring loans

4.2 Review and renegotiate loans as appropriate

5. Monitor equity, return on equity

5.1 Review valuations on assets and monitor the effect on equity

5.2 Calculate returns on assets and returns on equity and use to assist business performance

Required Skills and Knowledge

Element

Performance criteria

Elements describe the essential outcomes.

Performance criteria describe the performance needed to demonstrate achievement of the element.

1. Assess the capital needs of the business

1.1 Determine working capital and capital requirements for development

1.2 Determine return on capital or opportunity cost of development capital

2. Assess appropriate equity levels for the business

2.1 Assess risks associated with the business

2.2 Identify personal and business risk preferences

2.3 Analyse equity levels in comparable enterprises using benchmark data

3. Establish and maintain appropriate financing arrangements for the business

3.1 Determine capacity to service debt and meet liabilities

3.2 Sources of funds are identified and terms and conditions compared and evaluated

3.3 Conduct negotiations to ensure the establishment of the most favourable terms and conditions

3.4 Source loan funds and check agreements

3.5 Monitor costs of finance to keep them within defined budget limits

3.6 Manage relationships with finance providers

3.7 Monitor the economic environment and assess implications for the business

4. Monitor and review the mix of liabilities

4.1 Conduct regular reviews of the mix of liabilities and the costs and determine the benefits associated with reconfiguring loans

4.2 Review and renegotiate loans as appropriate

5. Monitor equity, return on equity

5.1 Review valuations on assets and monitor the effect on equity

5.2 Calculate returns on assets and returns on equity and use to assist business performance

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:

assess capital needs

assess appropriate equity levels for a business

establish and maintain appropriate financing arrangements

review the mix of liabilities

monitor key indicators of financial returns for the business.

The candidate must demonstrate knowledge of:

preparation of financial reports

impacts resulting from changes to various macroeconomic factors

sources of finance

negotiation techniques

concept of equity, Return on Assets (ROA), Return on Equity (ROE), Internal Rate of Return (IRR)

bank and lending institution policies and requirements.

Range Statement