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Unit of competency details

AHCAGB605 - Manage business capital (Release 1)

Summary

Usage recommendation:
Superseded
Mapping:
MappingNotesDate
Supersedes and is equivalent to AHCAGB605A - Manage business capitalThis unit is equivalent to AHCAGB605A Manage business capital. 26/Jun/2016
Is superseded by and equivalent to AHCAGB608 - Manage financial resourcesTitle updated. Performance criteria clarified. Foundation skills added. Assessment requirements updated. 20/Oct/2019

Releases:
ReleaseRelease date
1 1 (this release) 27/Jun/2016

Companion volumes:
Unit of competency Assessment requirements

Delivery:
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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  14/Oct/2016 
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Unit of competency

Modification History

Release

TP Version

Comment

1

AHCv1.0

Initial release

Application

This unit of competency describes the skills and knowledge required to manage the business capital of the business.

All work must be carried out to comply with workplace procedures, work health and safety legislation and codes, and sustainability practices.

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 occupational licensing, legislative or certification requirements are known to apply to this unit at the time of publication.

Pre-requisite Unit

Nil.

Unit Sector

Agribusiness (AGB)

Elements and Performance Criteria

Element

Performance criteria

Elements describe the essential outcomes.

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

1. Assess the capital needs of the business

1.1 Determine working capital and capital requirements for development

1.2 Determine return on capital or opportunity cost of development capital

2. Assess appropriate equity levels for the business

2.1 Assess 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 Sources of funds are identified and terms and conditions compared and evaluated

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

Foundation Skills essential to performance are explicit in the performance criteria of this unit of competency.

Range of Conditions

Unit Mapping Information

This unit is equivalent to AHCAGB605A Manage business capital.

Links

Companion Volume implementation guides are found in VETNet - https://vetnet.gov.au/Pages/TrainingDocs.aspx?q=c6399549-9c62-4a5e-bf1a-524b2322cf72

 

Assessment requirements

Modification History

Release

TP Version

Comment

1

AHCv1.0

Initial release

Performance Evidence

The candidate must be assessed on their ability to integrate and apply the performance requirements of this unit in a workplace setting. Performance must be demonstrated consistently over time and in a suitable range of contexts.

The candidate must provide evidence that they can:

  • assess capital needs
  • assess appropriate equity levels for a business
  • establish and maintain appropriate financing arrangements
  • review the mix of liabilities
  • monitor key indicators of financial returns for the business.

Knowledge Evidence

The candidate must demonstrate knowledge of:

  • preparation of financial reports
  • impacts resulting from changes to various macroeconomic factors
  • sources of finance
  • negotiation techniques
  • concept of equity, Return on Assets (ROA), Return on Equity (ROE), Internal Rate of Return (IRR)
  • bank and lending institution policies and requirements.

Assessment Conditions

Competency is to be assessed in the workplace or simulated environment that accurately reflects performance in a real workplace setting.

Assessors must satisfy current standards for RTOs.

Links

Companion Volume implementation guides are found in VETNet - https://vetnet.gov.au/Pages/TrainingDocs.aspx?q=c6399549-9c62-4a5e-bf1a-524b2322cf72

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