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ICB LEARNERSHIPSAQA Qualification ID No. 48736 FASSET Learnership Code 01/Q010023/24/120/4 National Certificate: Small Business Financial Management

PRACTICAL TRAINING LOGBOOKName of Learnerand ICB Student Number

Name of Workplace Provider and Accreditation NumberName of Training Provider and Accreditation Number

Purpose of the Practical Training Logbook:

To make the assessment process more manageable for both Learner and Assessor, the unit standards have been adapted into 11 units (learning outcomes). Each unit, with its component assessment criteria, have been included in this Logbook. It is to be completed by the Learner and is vital to the assessment process as it indicates the progress that the learner is making towards meeting all assessment criteria. After completing each unit of this Logbook the Learner will be ready to be assessed against all the outcomes for that unit (and all the relevant SAQA unit standards) and will be deemed competent (C) or not yet competent (NYC) by the Assessor. The Logbook contains exactly the same tasks, questions and assessment criteria as the Assessment Record that will be completed by the Assessor during each assessment session.

ICB Small Business Financial Management Learnership Page 1 of 45 Practical Training Logbook

This blank Logbook must be split up and filed in the front of every section (unit) of the learner’s Portfolio of Evidence. Then (in stages during the year) the Learner must complete the ‘PoE Reference’ column, fill in the timing and completion dates in the ‘Completed’ column and then file the supporting evidence for each section. The Learner and his/her Mentor/Supervisor should then confirm the assessment date/s and venue/s with the Assessor. The assessment can be done in stages or as one complete assessment.

This Logbook is to be referred to in conjunction with the SBFM ‘Summarised SAQA Unit Standards Booklet’ as well as the ‘Assessment Record’ and the ‘Introductory Learnership Outline’

Portfolio of Evidence (Training Record):The Learner's Training Record (Portfolio of Evidence) will therefore consist of several lever arch files and will include the following:

1. Learner’s Quarterly Reports – four formal reports in MS Word format 2. Practical Training Logbook – split into 11 sections - one per unit

(this Logbook includes exactly the same units, learning outcomes and assessment criteria as the Assessment Record)3. Documentary evidence for each unit – e.g. reports, print-outs, statements, summaries, letters, memos, projects, etc.

It will also include the following ICB forms:

4. Examinations Report form5. Courses and Seminars Attended form 6. Employment Record form/s7. Diary form/s – optional - only if required by the Supervisor to supplement 1 and 2 above8. Review form/s – alternatively the company’s own performance appraisal form can be used.

Responsibilities:The Learner is responsible for completing and filing all aspects of his/her Portfolio of Evidence (Training Record) except the Review form/s.

The Supervisor is responsible for completing the Review form and providing the learner with a copy.

The Assessor is responsible for completing the Assessment Record in stages and providing the Learner with copies.


Contents of the Practical Training Logbook:

Unit 1 Perform VAT calculations and complete VAT returns

Unit 2 Record business financial transactions (and perform monthly reconciliations)

Unit 3 Complete PAYE documents (including payslips and other payroll tasks)

Unit 4 Finalise and interpret accounts (adjustments, income statements, balance sheets and ratio analysis)

Unit 5 Calculate the tax payable by a small business

Unit 6 Cost and price a product (and perform breakeven analysis)

Unit 7 Manage working capital (including WACC – weighted average cost of capital)

Unit 8 Perform financial planning and control functions (that part of the unit standard that excludes the business plan)

Unit 9 Prepare a business plan (the remaining part of the financial planning and control unit standard)(This unit includes significant aspects of three of the elective unit standards – using word processing, spreadsheet and presentation software. It should also include most aspects of the fundamental unit standards – written and oral communication, mathematics and statistics)

Unit 10 Represent, analyse and calculate shape and motion in 2- and 3-dimensional space in different contexts

Unit 11 Demonstrate the ability to use a database for business purposes

Note: These 11 units in this Logbook should be read in conjunction with the SBFM “Summarised SAQA Unit Standards Booklet” which is available from the ICB in electronic format.


Unit 1 Perform Value Added Tax Calculations and Complete VAT Returns

Core Unit Standard US ID 114735 - NQF Level 4 (5 credits) The spaces below are for additional comments by theLearner regarding the fundamentals and electives:

Fundamental Unit Standards US ID 8974 – “….. oral communication …..”

US ID 8975 – “ Read, analyse & respond to texts”

US ID 8976 – “Write ….. range of contexts”

US ID 12153 – “….. compose texts”

US ID 9014 – “Use mathematics …..”

Elective Unit Standards US ID 7567 – “….. use spreadsheets”

Instructions to the LearnerProduce a minimum of three documentations each (for aspects of tasks 1.2 and 1.3) and two documentations each (for task 1.1) to provide evidence for performing VAT calculations and completing VAT returns.

Unit 1 – Learning OutcomesTiming and Completion Date

Portfolio of EvidenceReference

Task 1.1Demonstrate an understanding of VAT by applying the current regulations and rates of VAT as contained in the Sars VAT 404 Manual:


Taxable (standard rated and zero rated) and exempt supplies The accrual versus the cash basis of accounting for VAT Voluntary and compulsory registration (and the VAT 101 registration process) Capital goods versus other goods Tax invoices and credit notes Deemed VAT (in the context of the purchase and sale of second hand trading stock)

and assets, as well as non-cash capital injections and drawings by the owner Non-claimable VAT items (e.g. entertainment, passenger vehicles, etc.) Advantages and disadvantages of registering as a vendor (in the context of the type of

small business and the VAT status of its customers) VAT periods and due dates

Task 1.2Calculate VAT correctly by applying the current regulations and rates of VAT as contained in the Sars VAT 404 Manual:

VAT Output and adjustments for discounts and returns VAT Input and adjustments for discounts, returns and bad debts Penalties and interest VAT payable and receivable

Task 1.3Set up and maintain VAT records and complete VAT returns by applying the current regulations as contained in the Sars VAT 404 Manual and VAT News:

VAT transactions are recorded according to small business bookkeeping practice VAT records are maintained and used to complete the VAT 201 correctly and on time VAT records are suitable for providing adequate evidence and ensuring compliance if

audited by Sars


Unit 2 Record Business Financial Transactions (and Perform Monthly Reconciliations)







US ID 9015 – “Apply statistics …..”


Instructions to the LearnerProduce a minimum three documentations each (for aspects of tasks 2.1.1 to 2.1.4 and 2.2.1 to 2.2.9) to enable you to provide evidence for recording business financial transactions.


Unit 2.1 – Learning Outcomes – Part 1

Record transactions in the cash book and carry out bank reconciliation

Timing and Completion Date


Task 2.1.1Demonstrate an understanding of how cash receipts are processed in the cash book (or the cash receipts journal):

Preparing bank deposit slips from cash/cheques received, duplicates of receipts issued and cash register rolls (duplicate cash invoices)

Recording as receipts in the cash book Also recording electronic transfers from customers as receipts Receipts are allocated to debtors, cash sales, VAT output and other accounts in the

cash book

Task 2.1.2Demonstrate an understanding as to how cash payments are processed in the cash book (or the cash payments journal):

Cheques are issued and electronic payments are made Debit orders and stop orders and other bank statement debit entries are gathered All the above are recorded as payments in the cash book Payments are allocated to creditors, VAT input and other accounts in the cash book

Task 2.1.3Record receipts and payments in the cash book and post to the general ledger:

Receipts deposited in bank are recorded, allocated to debtors, cash sales, VAT output, etc in columnar form and totalled

Payments out of bank are recorded and allocated to creditors, VAT output, etc in column form and totalled

Total receips to bank with allocations, and total payments out of bank with allocations, are posted to the general ledger


Task 2.1.4Perform a month-end bank reconciliation:

Entries on the bank statement are compared (ticked off) to entries in the cash book Differences are highlighted in the cash book or bank statement and itemised Entries on bank statement not recorded in the cash book are entered in the cash book Other differences (mainly cash book entries not in the bank statement) are timing

differences and are not reversed in the cash book (e.g. cheque payments in the cash book not yet cleared through the bank)

A monthly bank reconciliation statement is compiled as follows:o The bank statement balance is listed firsto All remaining differences between bank statement and cash book (bank errors

and cash book timing differences) are itemized and listedo The addition/subtraction of bank statement balance and the remaining

differences must equal the cash book (general ledger bank account) balanceo If not equal, the bank reconciliation must be checked and adjusted until the

balances are equal


Record and analyse transactions in the debtors and creditors ledgers



Task 2.2.1

Demonstrate an understanding of how to produce quotations for customers: Receive a customer request for a quote Source product data and prices from a price list Generate a quote based on product/service units and sales price per unit


Task 2.2.2

Demonstrate an ability to produce an invoice: If there is a quote convert the quote into an invoice Itemise the sales price of the product or service Extend the units sold at the sales price Calculate VAT and add to the sales value Check the final invoice for arithmetic accuracy

Task 2.2.3

Set up a debtors ledger in an accepted conventional manner and demonstrate an understanding as to how invoices and cash receipts are posted to the debtors ledger:

Itemise all customers and then set up customer accounts in the debtors ledger Enter all credit invoices in a sales journal Post each invoice to a customer account (except cash sales in the cash book) Post the sales journal totals to the correct general ledger accounts Post each cash receipt from a customer (excluding cash sales) to the correct debtors

ledger accounts

Task 2.2.4Balance each debtors ledger account to arrive at a net amount that the customer owes the company:

For each customer deduct receipts from invoices to arrive at a net amount owed If there is a balance owing from the previous period add this amount to the net of

current invoices less cash payments Prepare a list consisting of each debtor’s balance at month-end Explain why the debtors list total must be equal to the debtors control account

balance in the general ledger Explain to the Assessor how some other transactions (such as credit notes, interest

and discounts) would affect a debtor’s account


Task 2.2.5

Demonstrate an understanding on how to produce orders for suppliers: Source product/service data and prices from suppliers Follow company policy on checking prices, quality, etc. Generate a purchase order – made up of quantity of physical units/hours at the quoted

price

Task 2.2.6

Demonstrate an ability to check supplier invoices: Check invoice quantity against the quantity on the purchase order Check invoice price against the order price If there are differences in either the quantity or the price follow up until the matter is

resolved

Task 2.2.7

Set up a creditors ledger in an accepted conventional manner and demonstrate an understanding as to how purchase invoices and cash receipts are posted to the creditors ledger:

Itemise all suppliers and then set up supplier accounts in the creditors ledger Enter all credit invoices in a purchases journal Post each invoice to a supplier account (except cash purchases in the cash book) Post the purchases journal totals to the correct general ledger accounts Post each payment from a supplier (excluding cash purchases in the cash book) to the

correct creditors ledger accounts


Task 2.2.8

Balance each creditors ledger account to arrive at a net amount that we owe to the supplier: For each creditor deduct payments from invoices to arrive at a net amount owed If there is a balance owing from the previous period add this amount to the net of

current invoices less payments

Prepare a list consisting of each creditor’s balance at month-end Explain why the creditors list total must be equal to the creditors control account

balance in the general ledger Explain to the Assessor how some other transactions (such as credit notes, interest

and discounts) would affect a creditor’s account

Task 2.2.9

Prepare a remittance advice from our company (which sets out our record of purchase invoices, payments to a supplier and the balance) that reconciles to the supplier’s statement (which is their record of the same thing):

Tick off entries in an individual creditor’s account to entries in the supplier statement Itemise differences Resolve and journalize differences that can be resolved, e.g. supplier discounts,

timing differences and interest Prepare a remittance advice (creditor’s reconciliation statement) as follows: balance

as per supplier account plus/minus differences = balance per creditor ledger account If the reconciliation does not balance then it must be checked and adjusted until it

does balance


Unit 3 Complete PAYE Documents (including Payslips and other Payroll Tasks)









Instructions to the LearnerProduce a minimum of four documentations (for each of tasks 3.1, 3.2 and 3.3) to enable you to produce evidence for completing PAYE documents.




Task 3.1

Use the Sars EMP 10 Manual (Guidelines for Employers) to calculate ‘remuneration’ and ‘balance of remuneration’ for PAYE, SDL and UIF purposes:

Gross pay and net pay Distinguish between ‘remuneration’ and ‘balance of remuneration’ (as per Sars) Distinguish between remuneration for PAYE, SDL and UIF purposes Apply Sars regulations for taxing weekly/monthly/annual payments, allowances and

fringe benefits Apply Sars regulations for pension, provident and medical aid payments/deductions Apply Sars regulations for taxing part-timers, casuals and contractors (including SDL

and UIF contributions)

Task 3.2

Use the Sars EMP 10 Manual (Guidelines for Employers) and other third party paymentsto calculate payslip deductions:

PAYE and UIF Pension, provident and retirement annuity funds Medical aid funds Garnishee orders Trade union subscriptions Any other deductions

Calculate the payments to all third parties and explain how and when these are paid: Produce evidence of how you have completed the necessary forms Produce evidence of how you have paid the correct amounts on time

Produce actual or sample payslips for weekly and monthly paid employees: Produce evidence of how you calculated the amounts and completed the forms Produce evidence of how you paid the correct amounts on time


Task 3.3

Use the Sars EMP 10 Manual (Guidelines for Employers) and any other information from your firm’s records to complete actual or sample:

IRP 5 certificates The annual IRP 501 reconciliation IRP 3(a) certificates The annual IT 3 returns Explain the Sars regulations and deadline dates for these certificates and returns


Unit 4 Finalise and Interpret Accounts (Income Statement, Balance Sheet and Key Ratios)









Instructions to the LearnerProduce a minimum of four documentations for each of tasks 4.1 and 4.2 (at least two for a sole trader and two for a close corporation) and two documentations for each of tasks 4.3 and 4.4 - to enable you to produce evidence for finalising and interpreting accounts.




Task 4.1

Given a pre-adjustment trial balance for a small business, journalise the following adjustments and produce a post-adjustment trial balance:

Stock valuation and cost of sales (periodic and perpetual inventory methods) Stock valuation and cost of sales (using FIFO, LIFO and AWC methods) Depreciation (straight-line and diminishing balance methods) Prepaid and accrued expenses Prepaid and accrued income Reversals of accruals and prepayments Bad debts written off

Task 4.2

Given a post-adjustment trial balance for a small business, draft the following: Income Statement (or Trading and Profit & Loss account) of a sole trader Balance Sheet of a sole trader Income Statement of a CC Statement of Changes in Equity of a CC Balance Sheet of a CC

Task 4.3

Use any one of the financial statements produced above to explain the difference between: Gross profit and net profit Gross margin % on turnover and mark-up % - calculate each and explain the

relationship between cost of sales, sales and gross profit Net profit and cash on hand – give three examples of transactions or adjustments that

affect cash but not profit and explain why


Net profit and cash – give three examples of transactions or adjustments that affect profit but not cash and explain why

Which statement measures the financial performance of the business

Task 4.4

For the financial statements of any two of the businesses you produced above: Calculate any 3 profitability ratios Calculate working capital, the current ratio and the acid test ratio Calculate inventory days, debtors days and creditors days Compare and comment on the profitability and liquidity of these two businesses


Unit 5 Calculate the Tax Payable by a Small Business









US ID 7570 – “…… word processing documents”

Instructions to the LearnerA. Produce a minimum of three documentations (for each of tasks 5.1 and 5.2) to enable you to produce evidence for calculating the tax payable by

a small business. B. Also provide a table or summary on Excel or Word or similar software for task 5.3 and be ready to explain and clarify any or all of the issues

involved.




Task 5.1

Distinguish between the main business expenses that are allowable for income tax purposes and those that are not:

Allowable expenses. Allowable tax rebates Non-allowable expenses Bad debts and provisions for doubtful debts Cost of sales and inventory valuations Accruals and prepayments (N.B. the ‘GAAP’ versus tax treatment of these and how a

sole trader could handle them for accounting and tax purposes) Wear and tear allowances (straight-line versus diminishing balance methods) Special allowances and incentives (accelerated wear & tear, industrial buildings, etc.)

Task 5.2

Given a trial balance (or summary of receipts and payments) and additional information and/or adjustments for a sole trader (whose small business is the sole source of income), calculate all the figures and schedules required and also complete the IT 14BU income tax return:

Calculate taxable income Calculate allowable expenses Calculate taxable profit Prepare all the required schedules and attachments Complete the IT 14BU return (including the personal balance sheet) of the taxpayer


Task 5.3

Explain the basic requirements and key differences between the following) in the context of limited liability, legal status, GAAP and tax compliance):

Sole trader

Partnership

Close corporation

Private company


Unit 6 Cost and Price a Product (and Perform Breakeven Analysis)










Instructions to the LearnerFirst produce a minimum of three documentations each (for aspects of tasks 6.1.2, 6.1.3 and 6.1.6) and one documentation each using Excel and/or Word (for tasks 6.1.1, 6.1.4, 6.1.5 and 6.1.7) to enable you to produce evidence for costing and pricing a product (using Absorption Costing).Then produce a minimum of three documentations each (for aspects of tasks 6.2.2 and 6.2.5) and one documentation each (for tasks 6.2.1, 6.2.3 and 6.2.4) using Excel and/or Word to enable you to provide evidence for costing and pricing a product (using Marginal Costing and Breakeven Analysis).



Cost and price a product using Absorption Costing



Task 6.1.1Understand and provide practical examples of the basic product related costs:

Materials Labour Factory overheads How overheads can be apportioned

Also distinguish between the following costs for a product: Production Administration Selling Distribution costs

Task 6.1.2Demonstrate the ability to create a bill of material:

Itemize each material component, with physical quantities, necessary to make a product

Itemize labour and overhead hours needed to make the product

Task 6.1.3Use the bill of material to demonstrate the ability to arrive at a costing for a product:

Cost of material components – units multiplied by the estimated cost per unit Labour - hours multiplied by the estimated cost per hour Overheads – hours multiplied by the estimated cost per hour


Task 6.1.4Demonstrate an understanding as to what costs are fixed and what costs are variable:

Define fixed and variable costs -o Fixed costs do not vary in relation to changes in sales and production volumeso Variable costs change in proportion to changes in sales and production

volumes Give examples of fixed costs and variable costs -

o Fixed costs – e.g. admin salaries, rent, etco Variable costs – e.g. materials, overtime wages, sales commissions, etc

Task 6.1.5Explain various methods whereby variable costs can be reduced. Some examples are:

Productivity incentives Organization and method studies to identify non value adding activities, thus creating

scope for cost reduction by eliminating these Using purchasing power on materials where high volume orders are placed with

suppliers

Task 6.1.6Demonstrate an understanding of how using chargeable hours compared to total hours (or vice versa) will impact of the final standard cost price of a product:

Define “chargeable hours” and total hours worked Calculate the impact on the cost of a product by using:

o Chargeable hourso Total hours

Explain why chargeable hours are commonly used

Task 6.1.7Calculate the selling price given the ‘mark-up’ % (on cost) or the ‘margin’ % (on selling price):


Explain the difference between mark-up and margin Calculate selling price given % mark-up and/or margin Calculate cost price given % mark-up and/or margin

Unit 6.2 – Learning Outcomes

Cost and price a product - Breakeven Analysis (Marginal Costing)



Task 6.2.1Define what breakeven analysis is and to explain the concepts around it:

Breakeven o Company neither makes a profit or a losso OR when Total Revenue = Total Costs

Volumes to be reached in order to break even Splitting costs into fixed and variable (refer to Task 6.1.4)

Task 6.2.2Be able to quote the following breakeven formulae and apply them to costing information – available information includes sales, variable costs and fixed costs (total and/or unit rand values) and/or volumes (units produced and sold):

Where unit information is available, the formula applied to ascertain breakeven units is: Fixed costs / (Selling price per unit – Variable cost per unit)

Where no units are available the formula applied to ascertain units to breakeven sales is: Fixed costs / (Marginal Income to Sales %)


Task 6.2.3Understand that breakeven analysis is an assumed model and will not always stand up in the real world if/when variables change significantly. Some standard weaknesses in breakeven analysis that must just be mentioned are:

The stepping effect of fixed cost increases:o Costs are only fixed within a relevant rangeo When volumes pass the relevant range, additional “fixed” costs are needed to

support the increased volume base thus increasing the fixed cost baseo Thus breakeven level increases when the relevant range is passed

Changes in product mix and its impact on marginal income (or contribution)o Product mix can significantly change from that assumed for breakeven

analysis to a different actual oneo If there are varying ‘Marginal Income to Sales %’ ratios for different

products, then any change in mix changes the overall MI% and thus the breakeven level changes either up or down

Task 6.2.4Understand that changes in any of the variables listed below will result in changes to breakeven levels. Be able to demonstrate how breakeven volumes will change when sales and cost components change:

Selling price Variable cost price Fixed costs

Task 6.2.5Be able to apply breakeven analysis concepts to:

Predict volumes to make a target profit, i.e. sensitivity analyses using changes in selling prices, variable cost prices and changes in fixed costs

Use as a prediction model for investment decisions


Unit 7 Manage Working Capital (including ‘APR’ or ‘WACC’ – Weighted Average Cost of Capital)

Core Unit Standard US ID 114740 - NQF Level 4 (5 credits)Manage working capital

The spaces below are for additional comments by theLearner regarding the fundamentals and electives:









US ID 7575 – “…… presentation documents”

Instructions to the LearnerProduce a minimum of three documentations each (for aspects of tasks 7.1.1, 7.1.2 and 7.2.2) and one documentation each (for tasks 7.1.3, 7.1.4, 7.1.5, 7.1.6, 7.2.1 and 7.2.3) to enable you to produce evidence for managing working capital.Wherever practical, use tables, summaries, text and slides using Excel, Word and PowerPoint (or similar) software for as many of the above tasks as possible. Be able to explain and clarify any or all of the issues involved during your presentation/s to the Assessor.



Manage working capital



Task 7.1.1Demonstrate an ability to calculate the level of working capital in a business and set it out in a readable form:

Define and calculate all the different components of working capital:o Inventoryo Accounts receivable (debtors)o Accounts payable (creditors)

Calculate net working capital (have all transactions been processed and included?) Explain how working capital is affected by:

o Obsolete and slow moving stocko Overstockingo An increase in bad debtso Receiving payment by credit cardo Factoring debtorso Allowing cash discounts

Task 7.1.2Demonstrate the ability to calculate ratios for working capital and its components and to interpret them:

Ratioso Current ratioo Acid test ratio

Inventoryo Days holdingo Assess if too high and recommend remedial action

Accounts receivable (debtors)o Days holdingo Assess if too high and recommend remedial action


Accounts payable (creditors)o Days holdingo Assess if too low and recommend remedial action

Cash to cash cycle (Inventory days + Debtors days – Creditors days)

Task 7.1.3

Identify and explain what overtrading is and how it can impact on working capital levels:

Definition of overtrading Impact of overtrading on profitability

o Gross profits fallingo Disproportionate increases (in relation to sales) of operating expenses

Threat to credit controlo Debtor accounts opened without sufficient investigationo ‘Stretching out’ of debtors book

Threat to stock managemento ‘Stock-outs’o Imbalanced stock (i.e. slow moving lines overstocked and high volume lines

understocked)

Task 7.1.4

Demonstrate how external events can affect the cash flow of a company. Assume the impact of a buoyant economy and an upbeat political scenario and how it can impact on cash flows:

Higher sales, low interest rates, good profit and cash availability Impact on working capital

o Debtors – lower risko Possible overstocking to service increase in saleso Able to stretch creditor because of cash availability in the economy


Task 7.1.5

Demonstrate how external events can affect the cash flow of a company. Assume the impact of a slow economy and/or a questionable political scenario and how it can impact on cash flows:

Lower sales, higher interest rates, lower profits and cash is tight Impact on working capital

o Debtors – more riskyo Stock – kept lowo Suppliers exert pressure on us to pay accounts more quickly

Task 7.1.6

Demonstrate how internal events can affect the cash flow of the firm: Impact of management actions, particularly top management Policy decisions regarding:

o Operating profito Working capital management (e.g. high inventory to satisfy customers; or low

inventory with deliberate stock outs to enhance cash flow)o Capital expenditure policy/strategyo Financing methods – equity/debto Decision to factor debtorso Policy on settlement discounts for debtors and creditors

See next page for Unit 7.2 (the second part of this unit)



Calculate an approximate APR (annual percentage rate)As the term ‘WACC’ (weighted average cost of capital) is more commonly used than ‘APR’, the ICB has used the term ‘WACC’ rather than ‘APR’ for this unit standard



Task 7.2.1

Demonstrate an ability to predetermine a mix of financing for an assets base:

Shareholders funds Long-term loans Financing options, tied to specific assets -

o Rentals and operating leaseso Financial leaseso Hire purchase schemes

Overdraft facilities

Task 7.2.2

Once you understand the different sources and % costs of finance, you must be able to demonstrate how they can be analysed to determine a WACC (weighted average cost of capital):

Set out various rates of interest for each source of finance, e.g. shareholders/owners finds, long term loans, overdraft, etc

Calculate the % of each source – e.g. long term loan as a % of total finance, or bank overdraft as a %

Multiply the applicable interest rate for each source by the % for that source to get the % weight of that source

Add all the above % weights to arrive at the WACC


Task 7.2.3

Determine real interest rates for: Specific asset finance deals General financing

And compare them to the WACC for your own business


Unit 8 Perform Financial Planning and Control Functions for a Small Business – Part 1 (excluding preparing a Business Plan – refer to Unit 9 for the business plan section)

Core Unit Standard US ID 114738 - NQF Level 4 (6 credits)Part 1 = 3 of the 6 credits for US 114738










Instructions to the LearnerProduce a minimum of three documentations each (for aspects of tasks 8.3, 8.4 and 8.5 and for all three techniques in 8.7) to enable you to provide evidence for this part of the unit: pertorming financial planning and control functions for a small business (excluding preparing a business plan). Use Excel spreadsheets these tasks.

Also produce one documentation each (for tasks 8.1, 8.2, 8.6, 8.7 and 8.8) to enable you to produce evidence for this part of the unit. Wherever practical, use tables and text using Word for these tasks.




Financial planning and control (Budgets vs Actuals and Variance Analysis)

Purchase of fixed assets based on highest financial return

Task 8.1

Be able to distinguish between the following financial reports: Income statement and budgeted income statement Balance sheet and budgeted balance sheet Budgeted cash flow (cash flow forecast)

Task 8.2

Explain the advantages of regular financial reporting; some of the advantages being: Identifying danger spots in profitability; examples -

o Falling saleso Sales OK but GP% to sales fallingo Expense increases disproportionate to sales level

Identifying danger spots in working capital levels, and thus cash flow; examples -o Stock levels too high – ratio analysis to determine actual days holdings versus

targeted dayso Debtor levels too high – ratio analysis to determine actual days holdings

versus targeted days Identifying danger spots per the above items enables corrective action to rectify the

matter The absence of reports negates the ability to take corrective action and the company

profitability and cash flow will be below the optimum at best, and at worst will deteriorate resulting in the failure and bankruptcy of the company


Task 8.3

Construct a columnar annual budget of planned income and expenditure (month and year). Provide for budget figures to be compared to actual figures and for the calculation and analysis of monthly variances:

Sales Cost of sales expense Gross profit Selling and admin expenses Net profit Provide for the above in total and also spread over revenue and/or cost centres Prepare a report that will highlight the variances, suggest corrective action and aid in

management’s decision making and future action

Task 8.4

Construct a cash flow forecast (cash budget) based on the above income statement budget (month and year):

Cash inflows from cash sales, debtors and other sources Cash outflows for cash purchases and expenses, as well as to creditors and others Cash surplus or deficit, and if a deficit, how this will be financed (Actuals and variances are not required)

Task 8.5

Construct a budgeted balance sheet based on the above income statement budget and cash budget (month and year):

At least two non-current and three current assets At least one non-current and two current liabilities Owners equity in respect of either a sole trader or a close corporation (Actuals and variances are not required)


Task 8.6Be familiar with the following three investment appraisal techniques for deciding on whether to purchase a fixed asset/s or invest in a project:

Payback Net present value (NPV) Internal rate of return (IRR)

Task 8.7Given a set of data for at least five years (e.g. sales units and price and operating cost components, as well as the initial purchase price of the fixed asset/s), demonstrate the ability to construct these into a forecasted cash flow thus arriving at:

Initial cash outflows for a project, versus Net annual cash inflows (or outflows) for a project (Ignore the effect of scrap values, wear and tear allowances and tax)

Then apply the above three investment appraisal techniques (refer to task 8.6) to various projects in order to:

Calculate the return for each project/asset Compare returns for each project Select the most profitable project Take account of any restraints (e.g. a limit as to value of investment of say not

greater than R 500 000)

Task 8.8Just be able to mention (in broad terms and no calculations are required) how task 8.6 would be influenced (favourably or unfavourably) by:

Additional working capital requirements for the project Wear and tear allowances (depreciation) Scrap (residual) values Income tax


Unit 9 Prepare a Business Plan

(Part 2 of ‘Perform Financial Planning and Control Functions for a Small Business)

Core Unit Standard US ID 114738 - NQF Level 4 (6 credits)Part 2 = 3 of the 6 credits for US 114738










US ID 7575 – “…… presentation documents”

Instructions to the LearnerProduce a business plan suitable for submission to a financial institution to enable you to produce evidence for preparing a business plan. The plan must be presented in both electronic format (using Word, Excel and PowerPoint) and bound in an acceptable and professional format with all annexures as required by any one of South Africa’s leading banks.ICB Small Business Financial Management Learnership Page 36 of 45 Practical Training Logbook

The basis of the tasks below is taken from Absa Bank's recommendation for submission of a business plan by a small business and can be found on their web page on the internet. Any of the other banks are likely to have a similar document.You are also required to use tables, summaries, text and slides using Excel, Word and/or PowerPoint (or similar) software for ‘role-playing’ the presentation of your business plan to the Assessor (who will act as the bank manager). Be able to explain and clarify any of the issues involved in the plan during your presentation/s to the ‘bank manager’.

Unit 9 – Learning Outcomes – Preparing a Business Plan

These learning outcomes are based on the requirements of Absa Bank.Learners should visit the Absa website (www.absa.co.za), and then go to and download “The Business Plan” (21 pages) and use this as a guide.Alternatively, learners may use similar guides on the websites of other RSA Banks (or from any other reputable local source or textbook) if they prefer.



Task 9.1

Demonstrate an ability to set out a general background to a business plan incorporating the following:

Executive summary (You can also include the overall vision/mission here) Table of contents Personal information (Include info for each partner/member/director if more than one owner) Description of the business Continued below in Task 9.2


http://www.absa.co.za/

Task 9.2

Continued: Now demonstrate a an ability to set out a basic understanding of:

Market analysis - Market share Brand image Customer support and perceptions Major trends applicable to the market

SWOT analysis (strengths, weaknesses, opportunities & threats) Impact of competitors Impact of the market and how products relate to the market

Product/service analysis

Infrastructure of the organization - Property, plant and equipment Staff Accountant/Auditor and accounting policies

Sales, customers/debtors and terms

Purchases, suppliers/creditors and terms

Sources of finance, interest rates and repayment terms - Outside finance Owner/s’ contributions

(Include a basic understanding of strategy) - Position in the market (leader, follower, niche) Leader or follower in product development Types of products – what to develop/retain/divest

Once tasks 9.1 and 9.2 are presented in the plan, you must demonstrate in the


remaining (financial) components of the plan that you have also considered and included relevant aspects of the following in the plan:

Task 9.3

Sales volumes and prices Production volumes and related costs

o Materials – product by producto Wages - product by producto Factory overheads – expense line by expense line

Other costso Selling – expense by expenseo Admin – expenses line by expense line

Revenue & cost centreso Business divisions/departments

Sales – external Sales – internal Admin departments Cost centres within factory etc

o Geographic areas

Task 9.4

Once relevant sales and cost components are in place as per the above task, you then need to demonstrate an understanding as how to calculate profit and draft the income statement using these components:

Sales value based on sales units at the selling price/s Material and wage costs based on production/sales units Factory overheads Gross profit – sales less materials, wages and factory overheads Sales and admin expenses Net profit – gross profit less sales and admin expenses


Task 9.5

Once the income statement has been prepared it is necessary to prepare a balance sheet:

Fixed assets based on capital expenditure planned Working capital once target holdings (stock,/debtors/cash/creditors/overdraft) are

established Financing structure -

o Equityo Non-current (long-term) finance

Task 9.6

From the income statement demonstrate a basic cash flow based on cash inflows and outflows:

Cash inflows from cash sales, debtors and all other sources Cash outflows for cash purchases and expenses, as well as to creditors and any other

other applications Cash surplus or deficit, and if a deficit, how this will be financed

Task 9.8

Demonstrate the ability to use spreadsheets to facilitate budget preparation:

Understand spreadsheet functions, formulae and formatting Set up spreadsheets to process all the components as per the above tasks Present these spreadsheets so as to make documents suitable for presentation to

financial institutions or other important stakeholders


Unit 10 Represent, Analyse and Calculate Shape and Motion in 2-Dimensional and 3-Dimensional Space in Different Contexts

Fundamental Unit Standard US ID 12417 - NQF Level 4 (4 credits) Only this one unit standard will be assessed in this unit

Instructions to the LearnerYou will need to provide evidence of all the following in your Portfolio of Evidence as the Assessor will scan this for relevance and thoroughness. During the assessment you will be provided with a selection of models, objects, drawings and/or plans, and be asked to answer written and/or oral questions to demonstrate your ability to represent, analyse and calculate shape and motion in 2- and 3-dimensional space in different contexts.



Task 10.1

Demonstrate the ability to identify the instruments below and to apply them to reading measurements:

Ruler or measuring tape – distance/length Protractor - angles Measuring jug - volume Kitchen scale - weight Watch – analogue and digital – time Vernier callipers – diameter, thickness, fractional parts Micrometer screws – small distances or angles Stop watch – time Chemical balance - mass


Identify which instrument is used for which application, for example:

Ruler – distance on a map Micrometer – distance on a spark plug Stop watch – timing a race Etc.

Task 10.2

Understand Pythagoras’ theorem and apply it measuring heights and distances in the context of a right angled triangle

Task 10.3

Calculate areas for:

Square/rectangle Circle Triangle

Task 10.4

Calculate the perimeter or circumference of:

Square/rectangle Triangle Circle


Task 10.5

Demonstrate the ability to: Define and describe 3-dimensional objects in terms of -

o Heighto Lengtho Widtho Diametero Circumference

Sketch a basic 3 dimensional object, e.g. a cube or a cylinder Calculate surface areas and volumes of a cube or a cylinder

Task 10.7

Draw a simple graph from given figures and/or apply a 2-dimensional formula(y = x + integer) to plot a simple graph to illustrate, for example:

Production costs and units produced Sales revenue and units sold Staff costs and sales revenue

Task 10.8

Read and answer simple questions (e.g. measurement, distance, direction, time) with regard to:

House plans Road maps World maps Time zones


Unit 11 Demonstrate the Ability to Use a Database for Business Purposes

Elective Unit Standard US ID 7576 - NQF Level 3 (5 credits) Only this one unit standard will be assessed in this unit

Instructions to the LearnerA. The assessment interview should preferably take place at your own work station with your own hardware and software.B. Produce a minimum of one documentation (for each of tasks 11.1, 11.2, 11.3 and 11.4) to enable you to produce evidence for demonstrating the

ability to use a database for business purposes. C. The assessment interview will be used to confirm this evidence at your work station. (If the assessment is not conducted at your own work

station, then you will first be allowed some time to familiarise yourself to another PC and printer).



Task 11.1Use an existing database to log into or load onto your PC and retrieve information as follows:

Log into the database Find a record based on simple criteria Create and save a simple query Create and save a multiple query Add a filter Remove a filter

Task 11.2Next refine a query and select and sort data as follows:

Add fields to a query Remove fields from the query Select and sort data based on given criteria Select and sort data based on common logical operators


Task 11.3

Then demonstrate your ability to use form (the data screen layout) to enter data into a database:

Form/layout is modified (text, background colours, importing image/graphics into form, change arrangement of objects within form layout)

A simple form (screen layout) is created Data is entered into the database using this form (screen layout)

Task 11.4

Finally create reports by: Presenting selected data in a particular sequence on screen and in reports Modifying a report Creating customised headers and footers Modifying field attributes Grouping data in a report with totals and sub-totals Printing the report
