CMI Level 5 Unit 5007V1-Organisational Financial Management


Task 1 – Answer (350 – 400 words)

A.C. 1.1 – Determine how to obtain financial data and assess its validity

A.C. 1.4 – Review and question financial data

Task 2 – Answer (650 – 750 words)

A.C. 1.2 – Apply different types of analytical tools and techniques to a range of financial documents, formulating conclusions about performance levels and needs of stakeholders

A.C. 1.3 – Conduct comparative analysis of financial data

Task 3 – Answer (550 – 600 words)

A.C. 2.1 – Identify how a budget can be produced taking into account financial constraints and achievement of targets, legal requirements and accounting conventions

Task 4 – Answer (550 – 600 words)

A.C. 2.2 – Analyse the budget outcomes against organisational objectives identifying alternatives

Task 5 – Answer (1050 – 1100 words)

A.C. 3.1 – Identify criteria by which proposals are judged

A.C. 3.2 – Analyse the viability of a proposal for expenditure

A.C. 3.3 – Identify the strengths and weaknesses and give feedback on the financial proposal

A.C. 3.4 – Evaluate the impact of the proposal on the strategic objectives of the organisation


Re:  A.C. 1.1

The financial function is the bloodstream of any organization regardless of size, type and ownership structure. Though the importance of financial excellence is usually associated with business organizations that exist to make profit for their owners, the significance of an effective financial system cannot be undermined for not-for-profit (NFP) organizations as these organizations need to ensure the expenditures are controlled and are in line with the overall objective of the NFP.

To assess the financial performance of any organization a set of financial statements is used.

  1. Profit and loss account
  2. Balance sheet
  3. Cash flows statement
  4. Statement of changes in owner’s capital
  5. Notes to the financial statement


Another very critical purpose financial function serves is planning and control.


It is important to note that financial function is interwoven with the rest of the organizational functions such as operations/production, estimation, business development, HR & administration etc.

Financial function and operations/production:

Operations and production require financial resources e.g., materials, labor and other capital assets to generate production. Financial function is interrelated as sourcing of the resources require decisions that have financial implications such as credit terms, lease or buy, own or outsource etc.

Financial function and estimation:

Estimation function in a construction company works to bid for new tenders. These tenders are against bill of quantities (BOQ). These tenders are carefully prepared in close coordination with financial function as these have huge financial implications so far as a construction company is concerned. Financial function challenges the assumptions, incorporates inputs such as cost of performance, advance payment and letter of credit.

Financial function and business development:

Business development function exists to look for new projects. Input from financial function is pivotal to this characteristic to ensure that all new projects are in line with the overall business strategy and financial goals.

Financial function and HR & administration:

Financial function is interrelated to HR & administration that deals with movement of staff that have financial implications.

A.C. 1.2

Re: A.C. 1.2

System of accounts:


A system of accounts follows the a process flow in order to provide useful economic and financial information to the users of financial statements.

Description of financial statements:

In sub task A.C.1.1 familiarizes us with the financial statements. We will now describe briefly below each of those five elements:

  1. Profit and loss account:

Profit and loss account or income statement, as the name signifies, is a statement that shows us results of operations of any business organization. In simplistic terms a profit and loss account shows how much profit or loss a business has made over a period of time. Main elements in a typical income statement include:

  1. Sales revenue: Money earned by for example selling ice cream
  2. Cost of sales: Money spent on making ice cream that was sold
  3. Gross profit: Difference between sales and cost of sales
  4. Operating expenses: Spending on common organizational overheads
  5. Net profit: Net income after deducting all expenses from the operating profit.
  1. Balance sheet:

Balance sheet is the statement that reflects the financial health of the business. Main elements of balance sheet are:

  1. Assets: What the business owns
  2. Liabilities: What the business owes to outsiders
  3. Owner’s equity or capital: Shareholding or the owners of business




  1. Cash flow statement: It has following components:
    1. Operating: Main business operations
    2. Investing: Cash inflow/outflow on assets to generate more revenue
    3. Financing: Cash inflow/outflow from financing the business e.g., equity or debt


  1. Statement of changes in equity: This statement shows how owner’s equity has changed and what has caused changes in the owner’s capital


  1. Notes: These are explanatory notes usually cross-referenced with above four financial statements in order to provide further details.



Other financial control systems:

Other than the above below tools are also used to control the financial system:

  1. Budgets: Set limits and targets in line with overall organizational goals
  2. Financial plans : Provide a look ahead


Re: A.C.1.3

Please click the icon below to receive this assessment in full for only $15