Understanding Financial Planning

Formulates the way in which financial goals are to be achieved.

A statement of what is to be done in the future.

Increasing the market value of the owner’s equity.

<p>Because they take a long time to implement.</p> Signup and view all the answers

<p>A desirable consequence of good decision making but not an end unto itself.</p> Signup and view all the answers

<p>As having a short-run and a long-run.</p> Signup and view all the answers

<p>The typical time frame for short-run financial planning is the coming 12 months.</p> Signup and view all the answers

<p>The purpose of aggregation is to determine the total needed investment by adding up all individual investment proposals, treating it as one big project.</p> Signup and view all the answers

<p>Financial planning provides a rational way of planning options or alternatives, analyzing different scenarios, and evaluating the impact on shareholders.</p> Signup and view all the answers

<p>Financial planning enables the explicit examination of linkages between investment proposals for different operating activities of the firm and its available financing choices.</p> Signup and view all the answers

<p>The typical time frame for long-run financial planning is the coming two to five years.</p> Signup and view all the answers

<p>Financial planning helps to identify what may happen to the firm if different events take place and addresses what actions the firm can take.</p> Signup and view all the answers