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BF-Lesson-2

The document outlines the importance of financial planning in achieving organizational goals, detailing the financial planning process and its steps. It emphasizes the need for strategic, tactical, and operational planning to guide decision-making at various management levels. Key steps in the financial planning process include setting goals, identifying resources, assigning tasks, establishing evaluation systems, and determining contingency plans.

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mcoy10vivo
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3 views

BF-Lesson-2

The document outlines the importance of financial planning in achieving organizational goals, detailing the financial planning process and its steps. It emphasizes the need for strategic, tactical, and operational planning to guide decision-making at various management levels. Key steps in the financial planning process include setting goals, identifying resources, assigning tasks, establishing evaluation systems, and determining contingency plans.

Uploaded by

mcoy10vivo
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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slidesmania.

com

Financial
Planning Tools
and Concepts
BUSINESS FINANCE: Lesson 2
slidesmania.com

LEARNING OBJECTIVES
1. Define Financial Planning
2. Explain the Importance of Financial
Planning
3. Identify the steps in the financial
planning process.
4. Illustrate the Financial Planning
Process
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• Planning is very important, it provides


directions to achieve the organization’s
objectives but it’s useless without a strategy.
• Strategic Planning helps in achieving the
company’snobjectives, it is designed to guide
the company in operational and financial
decisons.
• Strategic Plan includes the vision and misson,
and goals set by the top level of management.
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• Tactical Planning helps the company by


translating the strategic plans into specific
plans or actions carried out by the middle level
of management.

• Operational Planning involves day to day


operations carried by the lower level
management, it transforms tactical plan into
specific and detailed objectives.
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FINANCIAL
PLANNING
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• Financial Planning is the process of deciding


how an organizations can accomplis its financial
goals and objectives. It is divided into:

1. The long term ginancial plan, also known as


strategic plan.
2. The short term financial plan, also known as the
operating financial plan.
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slidesmania.com

IMPORTANC
E OF
FINANCIAL
PLANNING
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1. Financial planning helps managers assess the impact of


the strategy or actions on their company’s financial
position, cash flows, and earnings and if there is a need for
additional financing.
2. It helps the company in the survival when uncertainties
come along. Risks are calculated and alternatives can be
done. Through financial plans, the firm can adapt to the
changes happening in their environment.
3. It gives directions to the organization. Since plans are
made, the firm can make necessary actions.
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STEPS IN
FINANCIAL
PLANNING
PROCESS
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slidesmania.com

1. SET GOALS OR OBJECTIVES


- The goals of a company can be divided into:
a. short term goals (1 year)
b. mid term goals (3-5 years)
c. long term goals (5-10 years or even longer).

- Long term goals set the company’s direction.


- Short term goals are the specific steps or actions that
will ultimately achieve the company’s long term goals.
- Vision describes what a company wants to become.
- Mission is how the company will achieve its vision.
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2. IDENTIFY THE RESOURCES


NEEDED.
- Resources compride production
capacity, human resources, and
financial resources.
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3. IDENTIFY A GOAL THAT IS


RELATED TO THE TASKS
- The management must find out how to achieve
the goal.
- For example, if they want to increase sales, they
can train their sales agent to become more skilled
in dealing with clients.
- They can also make sales promotions as a
marketing strategy.
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4. ASSIGN THE TASK TO AN


ACCOUNTABLE AND RESPONSIBLE
INDIVIDUAL OR TEAM AND HAVE A
TIMELINE
- After identifying the task to achieve
the goal, the company must identify
who will be accountable for the actvity.
- There should be a specific timeline for
it.
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5. ESTABLISH AN EVALUATION
SYSTEM FOR MONITORING AND
CONTROLLING.
- The management must establish a
process that allows them to supervise
the plan. This can be done by
comparing the budgets and projecting
financial statements with the actual
resorts.
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6. DETERMINE CONTIGENCY
PLANS
- The management has alternative plans to
minimize the risk or bad effect to the
company,
- Contigency Plan is an alternative plan of
an organization to respond efficiently to a
future event or situation that may or may
not happen. Budgets and projected financial
statements are also considered in

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