Essay Explains Management Strategies and Their Impact on Businesses – Case Study – Management Assignment Help

Assignment Task

Outcomes assessed:
Explains management strategies and their impact on businesses
Evaluates the effectiveness of management in the performance of businesses
Plans and conducts investigations into contemporary business issues
Organises and evaluates information for actual and hypothetical business situations

Task
Nature of Task and Questions
Stimulus:
Increased competition in the fashion industry and the swiftly changing nature of global markets has resulted in ‘Saffron Designs Pty Ltd’ experiencing complications. This has led to declining sales and increasing expenses as well as cash flow problems. ‘Saffron Designs Pty Ltd’ expected that they would have higher level of sales in 2018 based on their 2017 sales. As a result they produced greater volumes of shirts in comparison to the previous year. The French company that supplied the fabric used by Saffron Designs Pty Ltd increased the prices of their fabric by 20%.
There has been an increase in staff training and additional workers had to be employed to fund the increased production. This has resulted in increased allocation of funds to the human resource department. However, the expectation to increase production has decreased staff morale. In addition to buying greater volumes of fabric to increase their production levels in 2018, ‘Saffron Designs Pty Ltd’ bought new equipment which has resulted in the company not having enough cash to meet its financial obligations without having to resort to taking a new loan.
The owner has identified a potential new partner to inject more funds into the business. However, the potential new partner has reservations about the accuracy of the financial reports and the performance of the business.

Extract from financial reports for Saffron Designs
2017 2018
Sales 150 000 100 000
Accounts Receivable 12 000 28 000
COGS 90 000 80 000
Expenses 6 000 18 000
Owner’s Equity 110 000 90 000
Staff Turnover 16% 30%
Note:
Gross profit industry average: 30%
Net profit industry average: 18%

The potential new partner has asked you to write a business report in which you:
Discuss the importance for ‘Saffron Designs Pty Ltd’ to keep accurate financial records and reports
Explain possible limitations of financial reports
Assess the financial performance of ‘Saffron Designs Pty Ltd’ using comparative ratio analysis. You must refer to FOUR financial objectives including efficiency
Recommend TWO appropriate strategies that can be used to address TWO financial issues in the scenario and data provided.
You will be assessed on your ability to:
Demonstrate knowledge and understanding relevant to the topic Finance
Apply the stimulus in the business report
Communicate using relevant business terminology and concepts
Present a sustained, logical and cohesive response in the form of a business report
Integrate business key terms and concepts

Key Directive Terms:
Explain: Relate cause and effect; make the relationships between things evident; provide why/or how.
Discuss: Identify issues and provide points for and/or against
Assess: Make a judgement of value, quality, outcomes, results or size
Recommend: Provide reasons in favour

May identify the basic features of financial management.
Provides a basic explanation of limitations of financial reports
Provides a basic discussion on keeping accurate financial records and reportsA partly accurate financial performance assessment using comparative ratio analysis with reference to FOUR financial objectives
Presents a recommendation using appropriate strategies to address the financial issues
Identifies sources of finances and may provide a link between the changes in sources of revenue and expenditure with the changing business environment
Demonstrates limited knowledge and understanding using limited terminology and may refer to business case study
Presents a response with limited structure
Sources not cited using the correct format and provides a basic bibliography