Bloom’s Taxonomy: III, IV, V, VI
Definition
- LI. Remembering: Exhibit memory of previously learned material by recalling facts, terms, basic concepts and answers.
- LII. Understanding: Demonstrate understanding of facts and ideas by organizing, comparing, translating, interpreting, giving descriptions and stating main ideas.
- LIII. Applying: Solve problems in new situations by applying acquired knowledge, facts, techniques and rules in a different way.
- LIV. Analyzing: Examine and break information into parts by identifying motives or causes. Make inferences and find evidence to support generalizations.
- LV. Evaluating: Present and defend opinions by making judgments about information, validity of ideas, or quality of work based on a set of criteria.
- LVI. Creating: Compile information together in a different way by combining elements in a new pattern or proposing alternative solutions.
Topic Description
This topic provides the food processing industry manager with the knowledge and skills to manage finances for a small business or a department or unit in a larger enterprise. It provides foundational skills for using financial statements, conducting cost and price analysis, developing and monitoring budgets, and managing cash flow and project finances.
Learning Objectives
LO1. Use financial statements to assess financial position and business performance.
An ability to interpret financial statements is essential to the manager’s ability to make sound financial decisions and to integrate departmental or unit decisions into the larger business financial context.
Detailed Competencies = Performance indicators include but are not limited to:
- P1. Identify the right financial expert to seek advice from (e.g., accountants, financial managers etc.).
- P2. Communicate with accountants, financial managers, consultants, and senior management regarding:
- a. Accounting processes.
- b. Control systems.
- c. Financial reports.
- d. Potential issues.
- e. The financial impact of business decisions.
- P3. Use a balance sheet to evaluate:
- a. Current asset management.
- b. Working capital and short-term financing.
- c. Cash conversion cycle.
- P4. Use the departmental Income Statement to evaluate:
- a. Profitability.
- b. Expenditures.
- c. Use cash flow statements to evaluate operating cash flows.
- P5. Calculate common financial ratios and indicators used to measure financial strength, viability, and liquidity and compare them to appropriate benchmarks.
- P6. Evaluate performance relative to targets and objectives.
- P7. Evaluate short- and long-term operating decisions Accounting and control processes.
- a. Balance sheets.
- b. Income statements.
- c. Cash flow statements.
- d. Financial ratios and indicators.
- e. Common measures of financial strength, viability, and liquidity.
LO2. Conduct pricing, costing, and break-even analysis.
The ability to conduct cost, price, and break-even analysis is central to the manager’s function in determining the viability of both existing and new products and services.
Detailed Competencies = Performance indicators include but are not limited to:
- P1. Calculate for a product or service:
- a. Total costs.
- b. Fixed and variable costs.
- c. Direct and indirect costs.
- d. Discretionary costs.
- e. Incremental costs.
- f. Opportunity costs.
- g. Sunken costs.
- h. Marginal costs.
- P2. Prepare cost schedules using different costing methods:
- a. Marginal, Absorption, Standard, Historical.
- b. Unit, Job, Contract, Batch, Process, Service, Product, Multiple.
- c. Process and job- order, activity-based costing.
- d. Inventory costing methodologies– First In, First Out, Last in, First Out, Average Cost, Specific Item.
- P3. Use spreadsheet functions and tools for cost calculations.
- P4. Account for the difference in profits between different costing methods.
- P5. Evaluate break-even price for products and services.
- P6. Determine profitability for a product or service.
- P7. Optimize operations by identifying trends and cost reduction strategies.
- P8. Decide when to discontinue a product, service, or division.
- a. Types of costs.
- b. Costing methods.
- c. Break-even analysis.
- d. Net revenue calculations.
- e. Key cost drivers.
LO3. Prepare budgets.
The frontline supervisor is one of the processing facility’s greatest assets when it comes to resource conservation. A knowledge of resource flows, audits, and enabling technologies, as well as an ability to communication strategies for improvement, can greatly improve resource use efficiency and lower production costs.
Detailed Competencies = Performance indicators include but are not limited to:
- P1. Develop the overall budget within a strategic framework or corporate plan.
- P2. Create a budget development strategy to engage stakeholders and improve collaborative decision making (collect input, circulate drafts, communicate final budget and impact, monitoring process).
- P3. Collect and analyze data required for the budget.
- P4. Create operational budgets including cash flow, operating, sales, production, overhead, personnel, marketing, fixed costs.
- P5. Match the budgeting method (e.g. incremental, activity-based, value proposition) to the purpose of the budget.
- P6. Evaluate how different types of budgets impact each other and how they integrate with master and financial budgets.
- P7. Create budgets that:
- a. Effectively deploy financial resources to deliver the department or unit strategy for the year.
- b. Optimize the use of operational/discretionary items to create flexibility in the budget.
- P8. Develop a budget monitoring and review process to support timely, evidence-based decision making and review of relevant targets, KPIs.
- P9. Use spreadsheet functions and tools for budget preparation.
- P10. Create clear, concise presentations to assist in financial decision making in areas such as budgets and operational results, income targets, expenditure commitments and caps.
- a. Budget types.
- b. Budgeting methods.
- c. Budget elements.
- d. Targets, KPIs.
- e. Spreadsheets.
- f. Presentations.
LO4. Monitor budget performance.
The food processing industry manager must have the ability to monitor business, departmental, or unit budgets and to identify variances and make adjustments. They must also be able to communicate the results of budget monitoring in appropriate formats.
Detailed Competencies = Performance indicators include but are not limited to:
- P1. Create budget monitoring reports in appropriate formats:
- a. Use variance analysis to track performance against targets, KPIs.
- b. Analyze income and expenditures to identify opportunities and areas for improvement.
- c. Calculate balance remaining for the year.
- d. Calculate forecasted outruns.
- P2. Evaluate budget monitoring reports to assess actual performance against projected performance:
- a. Analyze changes in the internal and external environments, and make appropriate adjustments to the budget.
- b. Recommend appropriate actions to achieve budget targets in areas where significant deviations from budget are identified.
- P3. Create updated budgets in appropriate formats.
- P4. Collect and record relevant information to assist in future budget preparation.
- a. Budget elements.
- b. Targets, KPIs.
- c. Variance analysis.
- d. Budget monitoring reports.
LO5. Manage cash flow.
The manager is central to maintaining a positive cash flow within the business (i.e. taking in more cash than what is paid out). This gives the business buying power and protects it from excessive borrowing and lending problems.
Detailed Competencies = Performance indicators include but are not limited to:
- P1. Create an operational cash flow budget (direct method).
- P2. Use a cash flow statement to evaluate operating cash inflows and outflows.
- P3. Troubleshoot cash flow statements to determine problems and opportunities for improvement.
- P4. Evaluate how working capital affects cash flow.
- P5. Manage inventory levels, receivables, and payables to optimize cash flow.
- P6. Forecast future cash flows.
- a. Cash flow statements.
- b. Working capital.
- c. Accounts receivable, payable.
LO6. Manage project finances.
Managers and small business owners need the ability to manage specific projects for the development of new products or services, modernizing facilities, implementing new processes, and so on. The ability to manage project finances greatly increases the chance of success.
Detailed Competencies = Performance indicators include but are not limited to:
- P1. Use capital budgeting and evaluation techniques (e.g., ROI, payback, discounted cash flow, internal rate of return, net present value) to evaluate the viability of capital investments.
- P2. Use financial calculations and tools (e.g., project budgets, cash flows, capital analysis, sensitivity analysis etc.) to make effective project decisions.
- P3. Evaluate financing strategies for projects and make recommendations.
- P4. Present a business case for a project that supports decisions with financial analysis.
- a. Cash flow statements.
- b. Working capital.
- c. Accounts receivable, payable.
Links to existing courses
Approved Accredited Training Programs (Academic, Industries, Private Trainer)
NA
Recognition of worker skills = Certification
NA
Evaluation technics / assessment
- Quizzes
- Written tests
- Multiple choice questions
