Leeh Talks on Business, Finance, Marketing and Money.

Financial Planning-1 January 16, 2009

Today we continue our talk on financial planning

2.     Determination of the Form and the Proportionate Amount of Securities to be Issued: The second step in financial planning is the determination of the forms and the proportion of the various securities to be issued by the concern for raising capital.

3.     Other Steps: 

a)     Setting Financial Objectives: Setting the financial objectives in consonance with the basic goal of maximization of wealth is one of the steps involved in Financial Planning. For a blinds company who are selling vertical blinds, roman shades, faux wood shades online, the goal is to have 1 million$ business in first quarter. This is financial objectives set up by company. 

b)     Formulation of Financial Policies: The financial objectives of the firm can be achieved through financial policies. Financial policies are guides to all actions dealing with procurement, administration and distribution of funds. For term life insurance Company, they need to formulate Instant life insurance rates or life insurance quotes online in such a way that they can have better life insurance rates compare to others. It may be policy regarding management of fixed assets, current assets, policy governing the capital structure, policy regarding collection and credit, dividend policy etc.

c)     Laying down the Financial Procedures: Financial policies provide only the broad guidelines. For the proper execution of the financial policies, detailed financial procedures incorporating rules and regulations are required to be laid down. The financial procedures are very helpful to the middle level executives to know their responsibilities.

d)  Financial Forecasting: Financial Forecasting refers to the forecasting or estimating the future variability of factors. Forecasting is done in regard to output, sales, costs, profits etc.