Ø Strategic Planning Company’s strategy establishes an effective and efficient match between its resources, opportunities and risks. It provides a mechanism of integrating goals of multiple stakeholders. Ø Financial Planning of a company has close links with strategic planning. Financial plan should be developed within the overall context of the strategic planning. It is a process of identifying a firm’s investments and financing needs, given its growth objectives. It involves trade-off between various investment and financing options. A financial plan may be prepared for a period of three or five years. Ø Steps in Financial Planning: · Past performance Analysis of the firm’s past performance to ascertain the relationships between financial variables, and the firm’s financial strengths and weaknesses. · Operating characteristics Analysis of the firm’s operating characteristics—product, market, competition, production and marketing policies, control systems, operating risk etc. to decide about its growth objective.
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