Unit of competency Outline

Date retreived
22/07/2026 10:15 PM AWST

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Manage business capital

Manage business capital

Unit of competency
National Code
AHCAGB605A
State Code
D6646
TGA Status
Replaced
DTWD Status
Replaced
Current Release Number
1.00
Current Release Date
10/06/2011
View on TGA
State Implementation and Classification
Approved Date
13/12/2011
Field of Education
080301 - Business Management
Original Release Date
13/12/2011
Nominal Hours
50
Description
This unit covers the process of managing business capital in an agricultural or horticultural enterprise and defines the standard required to: 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.
Notes
Elements and Performance Criteria
1. Assess the capital needs of the business
  • 1.1. Working capital and capital requirements for development is determined.
  • 1.2. Return on capital/opportunity cost of development capital determined.
2. Assess appropriate equity levels for the business
  • 2.1. Risks associated with the business are assessed.
  • 2.2. Personal and business risk preferences are identified.
  • 2.3. Equity levels in comparable enterprises are analysed using benchmark data.
3. Establish and maintain appropriate financing arrangements for the business
  • 3.1. Capacity to service debt/meet liabilities is determined.
  • 3.2. Sources of funds are identified and terms and conditions compared and evaluated.
  • 3.3. Negotiations are conducted to ensure the establishment of the most favourable terms and conditions.
  • 3.4. Loan funds are sourced and agreements checked.
  • 3.5. Costs of finance are monitored within defined budget limits.
  • 3.6. Relationships with finance providers are managed.
  • 3.7. The economic environment is monitored and implications for the business assessed.
4. Monitor and review the mix of liabilities
  • 4.1. Regular reviews are conducted of the mix of liabilities and the costs and benefits associated with reconfiguring loans are determined.
  • 4.2. Loans are reviewed and renegotiated as appropriate.
5. Monitor equity, return on equity
  • 5.1. Review valuations on assets and monitor the effect on equity.
  • 5.2. Returns on assets and returns on equity are calculated and used to assist business performance.
RANGE STATEMENT
The range statement relates to the unit of competency as a whole.
Capital needs may be:
major fixed assets including machinery, land purchases, buildings and other equipment.
Risks may include:
price risk
seasonal and other production risks
other business and personal risks for example, those related to age and health factors and succession.
Sources of funds may include:
debt financing through term loans, bank bills, overdraft facilities, bridging finance, hire purchase and private finance
funds may also be derived through equity financing.
EVIDENCE GUIDE
The evidence guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, range statement and the Assessment Guidelines for the Training Package.
Overview of assessment

Critical aspects for assessment and evidence required to demonstrate competency in this unit
The evidence required to demonstrate competency in this unit must be relevant to workplace operations and satisfy holistically all of the requirements of the performance criteria and required skills and knowledge and include achievement of the following:
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.
Context of and specific resources for assessment
Competency requires the application of work practices under work conditions. Selection and use of resources for some worksites may differ due to the regional or enterprise circumstances.
Replaces
State Code National Code Title Type
S3546 RTE6904A Manage business capital Unit of competency
Replaced By
State Code National Code Title Type
BAQ80 AHCAGB605 Manage business capital Unit of competency