Nino joseph Mihilli’s view for buisness Finacial Plannin
Financial planning is the task of determining how a business will afford to achieve its strategic goals and objectives. Usually, a company creates a Financial Plan immediately after the vision and objectives have been set. The Financial Plan describes each of the activities, resources, equipment and materials that are needed to achieve these objectives, as well as the timeframes involved.
The Financial Planning activity involves the following tasks;
Assess the business environment
Confirm the business vision and objectives
Identify the types of resources needed to achieve these objectives
Quantify the amount of resource (labor, equipment, materials)
Calculate the total cost of each type of resource
Summarize the costs to create a budget
Identify any risks and issues with the budget set
Performing Financial Planning is critical to the success of any organization. It provides the Business Plan with rigor, by confirming that the objectives set are achievable from a financial point of view. It also helps the CEO to set financial targets for the organization, and reward staff for meeting objectives within the budget set.
The role of financial planning includes three categories:
Strategic role of financial management
Objectives of financial management
The planning cycle
When drafting a financial plan, the company should establish the planning horizon which is the time period of the plan, whether it be on a short-term or long-term (2–5 years) basis. Also, the individual projects and investment proposals of each operational unit within the company should be totaled and treated as one large project. This process is called aggregation.
Definition of Financial Planning
Financial Planning is the process of estimating the capital required and determining it’s competition. It is the process of framing financial policies in relation to procurement, investment and administration of funds of an enterprise.
Objectives of Financial Planning
- Determining capital requirements- This will depend upon factors like cost of current and fixed assets, promotional expenses and long- range planning. Capital requirements have to be looked with both aspects: short- term and long- term requirements.
- Determining capital structure- The capital structure is the composition of capital, i.e., the relative kind and proportion of capital required in the business. This includes decisions of debt- equity ratio- both short-term and long- term.
Importance of Financial Planning
Financial Planning is process of framing objectives, policies, procedures, programmes and budgets regarding the financial activities of a concern. This ensures effective and adequate financial and investment policies.
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Nino Joseph Mihilli 