BUSI 1600 Lecture Notes - Lecture 10: Sensitivity Analysis, Cash Flow Statement, Capital Structure
29 Mar 2017
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Document Summary
Financial planning is one of the most imp but also most difficult areas to address when planning a new venture. Ga(cid:374)sel defi(cid:374)ed fi(cid:374)a(cid:374)cial pla(cid:374)(cid:374)i(cid:374)g as the p(cid:396)ocess of syste(cid:373)atic a(cid:374)d (cid:395)ua(cid:374)titative forecasting of all cash in and outflows relevant for the exploitation of entrepreneurial opportunities, in order to support financial decisions within the future planning period. Serves as a means of identifying and addressing uncertainty. There are internal and external users of the business plan: both have keen interest in the financial aspect of the plan. Projected profitability is of interest to the entrepreneur and their team as well as potential investors: represents one way in which they hope to earn a return on their investment. Potential creditors are especially interested in the ability of the business to generate cash flow that will support timely repayment of debt obligations. Also need to know the financial requirements of the business.
