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Evidence Guide: AHCAGB605A - 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

 

AHCAGB605A - 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. Working capital and capital requirements for development is determined.
  2. Return on capital/opportunity cost of development capital determined.
Working capital and capital requirements for development is determined.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Return on capital/opportunity cost of development capital determined.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Assess appropriate equity levels for the business

  1. Risks associated with the business are assessed.
  2. Personal and business risk preferences are identified.
  3. Equity levels in comparable enterprises are analysed using benchmark data.
Risks associated with the business are assessed.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Personal and business risk preferences are identified.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Equity levels in comparable enterprises are analysed using benchmark data.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Establish and maintain appropriate financing arrangements for the business

  1. Capacity to service debt/meet liabilities is determined.
  2. Sources of funds are identified and terms and conditions compared and evaluated.
  3. Negotiations are conducted to ensure the establishment of the most favourable terms and conditions.
  4. Loan funds are sourced and agreements checked.
  5. Costs of finance are monitored within defined budget limits.
  6. Relationships with finance providers are managed.
  7. The economic environment is monitored and implications for the business assessed.
Capacity to service debt/meet liabilities is determined.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

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

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Negotiations are conducted to ensure the establishment of the most favourable terms and conditions.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Loan funds are sourced and agreements checked.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Costs of finance are monitored within defined budget limits.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Relationships with finance providers are managed.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

The economic environment is monitored and implications for the business assessed.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Monitor and review the mix of liabilities

  1. Regular reviews are conducted of the mix of liabilities and the costs and benefits associated with reconfiguring loans are determined.
  2. Loans are reviewed and renegotiated as appropriate.
Regular reviews are conducted of the mix of liabilities and the costs and benefits associated with reconfiguring loans are determined.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Loans are reviewed and renegotiated as appropriate.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Monitor equity, return on equity

  1. Review valuations on assets and monitor the effect on equity.
  2. Returns on assets and returns on equity are calculated and used to assist business performance.
Review valuations on assets and monitor the effect on equity.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Returns on assets and returns on equity are calculated and used to assist business performance.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Assessed

Teacher: ___________________________________ Date: _________

Signature: ________________________________________________

Comments:

 

 

 

 

 

 

 

 

Instructions to Assessors

Evidence Guide

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:

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.

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.

Required Skills and Knowledge

Required skills

assess capital needs

assess appropriate equity levels for the business

establish and maintain appropriate financing arrangements

monitor and review the mix of liabilities

monitor equity and return on equity

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

preparation of financial reports

impacts resulting from changes to various macro economic factors

sources of finance

negotiation techniques

concept of equity, ROA, ROE, IRR

bank and lending institution policies and requirements.

Range Statement

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

Capital needs may be:

major fixed assets including machinery, land purchases, buildings and other equipment.

Risks may include:

price risk

seasonal and other production risks

other business and personal risks for example, those related to age and health factors and succession.

Sources of funds may include:

debt financing through term loans, bank bills, overdraft facilities, bridging finance, hire purchase and private finance

funds may also be derived through equity financing.