COMM-2026EL Chapter Notes - Chapter 4: Accounts Receivable, Promissory Note, Retained Earnings
9 Oct 2017
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Chapter 4 - lo(cid:374)g-ter(cid:373) fi(cid:374)a(cid:374)cial pla(cid:374)(cid:374)i(cid:374)g & growth. Planning is a process that at best helps the firm avoid stumbling into the future backwards gm motors. As discussed in chapter 1, the appropriate goal is increasing the market value of the owners" equity which, if a firm is successful, usually results in growth. Growth, by itself, is not an appropriate goal for the financial manager! It is often useful for planning purposes to think of the future as having a short run and long run . The short-run is usually the coming 12 months. The long-run is what we focus on in respect to financial planning usually taken to be the coming 2-5 years. This type of planning, which considers all possible events, is particularly important for cyclical businesses, which are businesses with sales that are strongly affected by the overall state of the economy of business cycles.
