BSBFIM501 Manage budgets and financial plans - Assessment 1 Task B

Task B

It has come to the attention of the Managing Director, Tom Copeland, that due to the current economic climate, sales volume may be 20% below target this financial year. Tom is worried that this may severely impact profit projections. The company can accept as much as a 10% variance in profit projections; however, more than this could severely affect the company's ability to pay obligations and invest. Reliable data to determine whether the risk has eventuated should be available by mid Q2, when sales data for the company's product are in. As a special project, the Managing Director has asked you to perform a risk assessment and develop a contingency plan to manage the risk of sales falling 20%. As per organisational policy you should use the contingency plan template provided.
Consider the expectations of managers in relation to budget or financial plans.
What are the reports that can be used for financial planning in this organisation Explain how contingency plans work, and why they should be considered ahead of time. Why should team members or groups members be actively involved in designing and development of contingency plans. The current climate and what the impact will have on projections.