This is a paper that is focusing on the AFIM project on theoretical business business report assignment. The paper also provides additional information to use in the writing of the assignment paper. Below is the assessment description to follow:
The AFIM project on theoretical business report assignment
Background
Your 100% individual AFIM project is to set up your own “theoretical” business and produce a business report to secure a funding from potential investors. Spend some time thinking about a realistic business (manufacturing, service or retail) that you could run successfully in current economic condition and also observe a similar one in action if you can.
Your business should operate under the following two conditions:
• Your had a substantial win on the lottery. Depending on the size of your business venture (which must be a limited company). You may assume the lottery proceeds to be of any value which will give approximately one third of the capital you need to set up the business, representing the initial share capital of the new business. The remaining capital could be funded by bank loan or other sources.
• You are also going to embrace one international element in your business through foreign trade, that is international buy or sell. All financial statements should be in home currency –Sterling £.
The AFIM project on theoretical business report assignment
You need to include the following four sections in your business presentation:
1. INTRODUCING THE BUSINESS, MARKET AND BUSINESS ASSUMPTIONS
• Firstly, state clearly what the business idea is and provides a backdrop to the venture by discussing the market/competitors for this product/service and the economic environment for your business.
• Secondly, explain the assumptions used in the report and the accounting treatment of: stock values, depreciation, interest rate on loan, sales forecast and any other areas of subjective judgement which would appear within the company accounting reports.
2. PREDICTED PRODUCT COSTS, REVENUE AND PROFIT
Prepare a detail product cost breakdown, showing variable costs per unit. (note: production variable cost is used as the value of inventory). Selling price per unit, contribution per unit, total fixed costs, fixed costs per unit, and profit per unit. Additionally, this information is required for the most likely level of activity i.e. the expected outcomes which you will have built into your balance sheets and also profit & loss accounts.
Produce a graphical cost-volume-profit analysis which shows: total revenues; total fixed and variable costs; the expected break-even point; margin of safety; contribution and also profit at all feasible activity levels considered above.
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