The following task must be conducted in a safe environment where evidence gathered demonstrates consistent performance of typical activities experienced in the financial management field of work and...

Financial Analysis of Bega Cheese, Australia
Prepare for the task by completing the following steps to forecast the future financial resource needs:
Establish the capacity of existing financial systems, and document this in a report
The existing financial systems of Bega Cheese Ltd, Australia are its investment for expansion of its business. These are mostly in the form of capital investments in various facilities for the production and purchase of quality milk which is required for manufacturing delicious and tasty cheese. The total investment made by Bega Cheese towards it intangible assets; plant and equipments amounted to $42.7 million as on 2019. In the year 2018, the amount of investment was $28.5 million. The major investments were in the following areas:
1. Investment in the Tatura plant for enhancement of the lactofe
in capacity and implementation of minute and advanced technology.
2. Building a new plant in Koroit facility for manufacturing lactofe
in.
3. At the Tatura plant automation of the cream cheese filing line in order to increase the production efficiency.
4. Investment for installation of a new tubs line in order to produce cream cheese based dips.
5. Upgradation of the peanut butter facility already in existence in Port Melbourne for new natural farm to plate the nut spreads under the Bega
ands “Simply Nuts”.
6. For the employees who aspires for leadership roles there has been an 18 months Aspire Program started by the company.
7. The company also stresses on reduction of injury by adhering to and investing in the safety practices for the employees while operating the machineries and working in the plants.
Forecast and document the data and business system requirements
The investment in various facilities by Bega Cheese Ltd is expected to enhance the sales and profitability of the company in the future. Following will be the forecasted benefits of investments in these plants and facilities by Bega Cheese Ltd:
1. There will be increase in the long term supply of lactofe
in as a result of upgradation of the Tatura plant and erection of the new plant in Koroit. The new lactofe
in facility is expected to produce 35 tonnes of lactofe
in annually. The lactofe
in will be supplied and used in the production of pharmaceutical products and as an infant formula.
2. The new leadership program for the employees will enable the new leaders to undertake and initiate new roles and take up new projects. This will also enable the company to create new leaders who can
ing profitability for the company through more sales and purchases of new and improved milk products. This will enable them to adhere to various policies related to excise duty, various governmental charges, procedures related to international and domestic trade contracts, consumer laws, subsidies and Australian taxation policies.
3. With the launch of the new safety mechanism and investment policy the company has projected to reduce the injury level by 15% annually. Further the company expects to reduce the unacceptable incidents in their company and also emphasizes on the behavioural safety program which needs to be initiated in the workplace to make a zero-harm workplace. For this the company is making investment in purchasing new and improved machineries with advanced technologies for production of cheese. This will help in establishing internal control of the company.
Analyse the forecasted requirements. Provide the analysis
The forecasted requirement that will enable Bega Cheese Ltd, Australia to enhance their profitability is the increase in the production and sales of the cheese and peanut butter. Also, an increase in the manufacturing lactofe
in which is used for creation of baby products and various medicines will help the company to meet the forecasted requirements. But, these can only be achieved by technological enhancement of the machineries and plants facilities and building new and better work environment both physically and socially. For these the company wants funds which can be obtained only through debt or equity. Also, there has been a net present valuation (NPV) in order to estimate the future cash inflow that Bega Cheese Ltd can earn from its newly erected Koroit business facility for a period of 2020 till 2024. For this facility there has been a long term growth forecasted at 1.5% annually and after tax discount rate of 6.5%. To this the facility is expected to generate a positive cash flow and a positive NPV. Also, net present value (NPV) estimation was conducted for the entire company which was based on the cash flow projections. It was assumed that Bega Cheese Ltd is expected to grow at 2% per annum and considered the after tax discount rate at 6.5%. To this was found that the intrinsic value will be more than the ca
ying cost or market value. This will provide tremendous benefit for the investor where they will look for an opportunity to purchase the stock of Bega Cheese.     
Prepare and plan a comprehensive financial plan of the budget forecasts over the full planning-cycle according to organisational and statutory requirements
    Bega Cheese Ltd, Koroit
    Jun 30, 2024
    Jun 30, 2023
    Jun 30, 2022
    Jun 30, 2021
    Jun 30, 2020
    Jun 30, 2019
    Jun 30, 2018
    Jun 30, 2017
     
    In million $
     
     
     
     
     
     
     
     
    Cost of Investment in Koroit
    34
     
     
     
     
     
     
     
     
    Cash Flows
     
    200.45
    132.20
    87.18
    57.50
    37.92
    11.99
    31.04
    0
    Growth Rate in Cash Flow
     
     
     
     
    52%
    216%
    -61%
    0%
     
    Discount Rate @ 6.5%
     
    188.22
    124.13
    81.86
    53.99
    35.61
    11.26
    29.15
    0.00
    Present Value
    524.21
     
     
     
     
     
     
     
     
    NPV
    490.21
     
     
     
     
     
     
     
     
Prepare, document and present your recommendations for budget expenditure or for modification of the existing projections
The total cost incu
ed in acquisition of the Koroit facility by Bega Cheese Ltd was at $34 million. It has been purchased in order to enhance the lactofe
in extraction in the dairy plant in Victoria’s south west. This will enable Bega Cheese one of the world’s largest producer of specialty protein in infant foods and for pharmaceutical usage and in health foods. This will enable Bega Cheese to produce around 35 tonnes of lactofe
in extract annually in Koroit. We will conduct a net present value (NPV) analysis to decide the ability of the facility to generate positive cash inflow or not. For this the discounting rate after tax is assumed at 6.5%. On the other hand the cash flow of Bega Cheese growth rate was estimated by averaging the past growth rates in cash flows. To this it was observed that that net present value of the company has been amounted to $490.21 million based on estimation from 2021 till 2024. This estimation also helps Bega Cheese that the acquisition of Koroit plant will help in the expansion of cash flow and the production of lactofe
in in this facility.
Analyse the cu
ent asset performance and capacity by performing the following steps:
Using standard accounting techniques, conduct a balance sheet analysis analyse the costs of assets and liabilities, and the returns from them, to identify the extent of debt and equity financing
    Cost of Equity
    5.02%
    Beta
    0.71
    Rf
    0.76%
    Risk Premium
    6%
     
     
    Cost of Debt
    5.88%
     
     
    Equity
    814.04
    Debt
    258.53
    Total
    1072.57
     
     
    WACC
    4.78%
    Equity and Debt Financing
    76%
    24%
The above calculation is based on the estimation of Weighted Average Cost of Capital (WACC) of Bega Cheese Ltd based on the financials of 2020. The Beta is taken from, Yahoo finance, the Rf is the risk free rate of 10 year Australian government bond and the risk premium is the average premium in Australia for taking the risk of investing in a risky asset. Based on this the cost of equity is estimated at 5.02%. The cost of debt is calculated by multiply the interest rate with the tax rate of FY 2020 at 31%. To this the cost of debt has been estimated at 5.88%. On the other hand the equity and debt financing of the company is taken from the balance sheet of FY 2020 and is at $814.04 million and $258.53 million. Hence, it can be stated from this that Bega Cheese Ltd was able to finance 76% of its funding through equity while the rest 24% by bo
owing debts from the market. The WACC is 4.78% for Bega Cheese. This means the cost that Bega Cheese needs to pay to all its security holders in order to finance the assets is $0.0478 in return for every $1 in extra funding.
     Ratio Analysis
    Jun 30, 2020
    Jun 30, 2019
    Jun 30, 2018
    Jun 30, 2017
    Jun 30, 2016
    Return on Assets
    1.49%
    0.30%
    2.37%
    13.14%
    4.91%
The return on asset is the ability of Bega Cheese to generate earnings by deploying the assets of the company. It can be observed that the return on assets have increased in 2020 compared to the FY 2019. This was basically due to company’s investment in Koroit business facility.
In consultation with relevant organisational staff, establish and document the management responsibilities and legal requirements for reporting
In consultation with the organizational employees of the organization the relevant responsibilities of the management and legal requirements are as follows:
1. An amount of $2 million which was considered as other costs to Bega Cheese with respect to inclusion of tax was charged by ACCC in the Australia dairy industry and was considered as a legal cost later withdrawn as per the Australian Courts direction.
2. There must be provisions made by Bega Cheese with respect to contingent liabilities which may arise in the future due to obligations and sue by external parties to the organization. These contingent liabilities are with respect to the Fonte
a which have sued Bega Cheese in the Supreme Court of Victoria for using their trademark in Australia on the non-licensed products used by Bega Cheese outside the consent of Fonte
a.
3. There should be legal provisions and amendments made with respect to the employees and labourers salaries and wages which will also include the non-monetary benefits like general leaves and sick leaves.
4. The effective tax rate of Bega Cheese which is cu
ently at 37.5% and is abnormally high due to significant amount of non-deductable expenses and also includes legal costs which is related to the acquisition of Koroit facility.
Thus reporting on the progress and judgement of all the above cases must be conducted by the management on a regular basis in the financial statement. This will help the investors and the shareholders as well as the various stakeholders so Bega Cheese to get an idea of the ethical measurements of the company.
    Documents
    Sections
    Statement of the financial position as at the year end
    295(2) & 296(1)
    Statement of comprehensive income for the yea
    295(2) & 296(1)
    Statement of cash flow for the yea
    295(2) & 296(1)
    Statement of changes in equity
    295(2) & 296(1)
    Consolidated financial statement of parent entity
    295(2) & 296(1)
    Notes to the financial statements
    295(3)
    Director’s declaration by the CEO & CFO that the financial statement comply with the accounting standards and gives a true and fair view
    295(A)
    Auditor’s independent declaration
    307C
    Auditor’s report
    300A
Analyse and interpret the financial reports and key information. Document this analysis
    Income statement of Bega Cheese Ltd
    Budgeted
    Budgeted
    Budgeted
    Budgeted
    Actual
    Actual
    Actual
    Actual
    Actual
    
    Jun 30, 2024
    Jun 30, 2023
    Jun 30, 2022
    Jun 30, 2021
    Jun 30, 2020
    Jun 30, 2019
    Jun 30, 2018
    Jun 30, 2017
    Jun 30, 2016
     Total Revenue
    1871.08
    1768.48
    1671.5
    1579.85
    1,493.22
    1,419.95
    1,252.04
    1,226.66
    1,195.97
    Revenue
     
     
     
     
    1,493.22
    1,419.95
    1,252.04
    1,226.66
    1,195.97
    Other Revenue, Total
     
     
     
     
     
    -
    -
    -
    -
    Growth Rate
     
     
     
    6%
    5%
    13%
    2%
    3%
     
     Cost of Revenue,...