BUSI 2503 Lecture Notes - Lecture 7: Cash Flow, Retained Earnings, Financial Plan
28 Dec 2014
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Document Summary
Financial planning is a communication device to suggest where one is going and the routes to take. Steps in the strategic and financial planning processes: Thinking: consideration of the firm"s current businesses, challenges, and opportunities. Decisions: key directions, strategic resource commitment, and business models evolve. Finance models asset values and risk with long-term objectives. Planning: priorities, objectives, and outcomes are established. Financial plans and budgets are developed with short-term objectives. Performance: work plans for all departments, monitoring, evaluating, and corrective action. The thinking and decision stages should incorporate good corporate governance practices and ethical standards. Decisions should be analyzed with capital budgeting techniques to appreciate the results of different investment alternatives. During the process of building a financial plan, it"s important that consensus is built among all stakeholders of the company. Financial forecasting is usually based on the overall strategies developed as part of the financial plan. It"s essential to ensure the company has enough cash to stay in business.
