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Unit of competency details

AHCAGB608 - Manage financial resources (Release 1)

Summary

Usage recommendation:
Current
Mapping:
MappingNotesDate
Supersedes and is equivalent to AHCAGB605 - Manage business capitalTitle updated. Performance criteria clarified. Foundation skills added. Assessment requirements updated. 20/Oct/2019

Release Status:
Current
Releases:
ReleaseRelease date
1 1 (this release) 21/Oct/2019

Companion volumes:
Unit of competency Assessment requirements

Delivery:
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Training packages that include this unit

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Classifications

SchemeCodeClassification value
ASCED Module/Unit of Competency Field of Education Identifier 080301 Business Management  

Classification history

SchemeCodeClassification valueStart dateEnd date
ASCED Module/Unit of Competency Field of Education Identifier 080301 Business Management  21/Oct/2019 
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Unit of competency

Modification History

Release

Comments

Release 1

This version released with AHC Agriculture, Horticulture, Conservation and Land Management Training Package Version 4.0.

Application

This unit of competency describes the skills and knowledge required to manage the financial resources of the business, including reviewing the mix of liabilities, monitoring equity and return on equity.

This unit applies to individuals who take personal responsibility and exercise autonomy in undertaking complex work. They must analyse information and exercise judgement to complete a range of advanced skilled activities. They work in contexts that are subject to change and adapt a range of fundamental principles accordingly.

No licensing, legislative or certification requirements apply to this unit at the time of publication.

Pre-requisite Unit

Nil

Unit Sector

Agribusiness (AGB)

Elements and Performance Criteria

Elements

Performance Criteria

Elements describe the essential outcomes.

Performance criteria describe the performance needed to demonstrate achievement of the element.

1. Assess capital change to finances

1.1 Determine working capital and requirement for capital development

1.2 Determine return on capital investment

2. Assess appropriate equity levels for the business

2.1 Assess the financial risks associated with the business

2.2 Identify personal and business risk preferences

2.3 Analyse equity levels in comparable enterprises using benchmark data

3. Establish and maintain appropriate financing arrangements for the business

3.1 Determine capacity to service debt and meet liabilities

3.2 Identify sources of funds and compare and evaluate terms and conditions

3.3 Conduct negotiations to ensure the establishment of the most favourable terms and conditions

3.4 Source loan funds and check agreements

3.5 Monitor costs of finance to keep them within defined budget limits

3.6 Manage relationships with finance providers

3.7 Monitor the economic environment and assess implications for the business

4. Monitor and review the mix of liabilities

4.1 Conduct regular reviews of the mix of liabilities and the costs and determine the benefits associated with reconfiguring loans

4.2 Review and renegotiate loans as appropriate

5. Monitor equity, return on equity

5.1 Review valuations on assets and monitor the effect on equity

5.2 Calculate returns on assets and returns on equity and use to assist business performance

Foundation Skills

This section describes those language, literacy, numeracy and employment skills that are essential for performance in this unit of competency but are not explicit in the performance criteria.

Skill

Description

Numeracy
  • Analyse financial records and recognise trends in data

Unit Mapping Information

Code and title current version

Code and title previous version

Comments

Equivalence status

AHCAGB608 Manage financial resources

AHCAGB605 Manage business capital

Title updated

Performance criteria clarified

Foundation skills added

Assessment requirements updated

Equivalent unit

Links

Companion Volumes, including Implementation Guides, are available at VETNet: - https://vetnet.gov.au/Pages/TrainingDocs.aspx?q=c6399549-9c62-4a5e-bf1a-524b2322cf72

 

Assessment requirements

Modification History

Release

Comments

Release 1

This version released with AHC Agriculture, Horticulture, Conservation and Land Management Training Package Version 4.0.

Performance Evidence

An individual demonstrating competency must satisfy all of the elements and performance criteria in this unit. There must be evidence that the individual has managed the capital of one or more enterprises, including:

  • assessed capital finance needs
  • assessed appropriate equity levels for a business
  • established and maintained appropriate financing arrangements
  • reviewed the mix of liabilities
  • assessed key indicators against financial returns for the business.

Knowledge Evidence

An individual must be able to demonstrate the knowledge required to perform the tasks outlined in the elements and performance criteria of this unit. This includes knowledge of:

  • how to interpret and analyse financial reports
  • how various macroeconomic factors affect the business
  • sources of finance for the business
  • negotiation techniques
  • accounting terms and principles, including concept of equity, return on assets (ROA), return on equity (ROE), internal rate of return (IRR), forecasting
  • bank and lending institution policies and requirements.

Assessment Conditions

Assessment of skills must take place under the following conditions:

  • physical conditions:
  • skills must be demonstrated in a workplace setting or an environment that accurately represents workplace conditions
  • resources, equipment and materials:
  • access to business financial records.

Assessors of this unit must satisfy the requirements for assessors in applicable vocational education and training legislation, frameworks and/or standards.

Links

Companion Volumes, including Implementation Guides, are available at VETNet: - https://vetnet.gov.au/Pages/TrainingDocs.aspx?q=c6399549-9c62-4a5e-bf1a-524b2322cf72

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