FINANCIAL PLAN AND FORECAST | FINANCIAL PLANNING | FORECASTING | BUSINESS FINANCE #Finance

hello everyone welcome back again to my channel and i’m very happy that you joined me again to another learning adventure and for this vlog we’re going to discuss about Financial Planning and Forecasting so what are we waiting for let’s

begin Financial Planning aims to ensure that a firm or business is properly Capitalized and makes appropriate Investments so what’s about Financial Planning so we are going to discuss it here on this vlog Financial

Planning aims to ensure that a firm is properly Capitalized and makes appropriate investment there is enough budget there is enough fund Financial Planning is important in ensuring that corporate investment is

style="font-weight: bold; color: #1a73e8; text-decoration: none;">Financed appropriately as well as seeing to it that money is spent in worthwhile Investments achieving the goals of corporate color: #1a73e8; text-decoration: none;">Finance requires that any corporate investment be Financed appropriately the sources of financing are

Capital self-generated by the firm and Capital from external sources obtained by issuing a new Debt and Equity the financing mix will impact the Valuation of the firm as well as the other long-term financial

management decision there are two interrelated considerations here first management must identify the optimal mix of financing the Capital structure that results into maximum value Equity financing is less risky with respect to Cash Flow

commitments but results in a dilution of share ownership controls and earnings second is management must attempt to match the long-term financing mix to the Assets being none;">Financed as closely as possible in terms of both timing and Cash Flow most organizations prepare a revised forecast for the balance of the year taking into account earlier budget and forecasts this step is particularly important if there are variances from the

original budget for example if sales are less than projected because market conditions are less favorable than anticipated when the budget was prepared or forecasted managers may look for ways to increase sales or reduce expenses in order to avoid a loss for the year organizations may carry out a

form of economic Forecasting which is the process of making predictions about the economy forecast can be carried out at a high level of aggregation like domestic gross product or grocery gross domestic product or gdp Inflation unemployment or the fiscal deficit

they may also happen at a more disaggregated level for specific sectors of the economy or even specific business or firm some forecasts are produced annually but many are updated more frequently there are many other forecasts that managers ask for in order to try and anticipate what the future

might hold and so that they can prepare contingency plans in case of enforcing events when you say contingency plan that’s plan a b down to z example of unforeseen events that may affect future outcomes are the arrival of new competitors a change in the overall economic outlook which could

affect cost and or Revenues either positively or negatively or even the arrival of a new company in another line of business that could raise prevailing wage rates in the region managers like to develop forecasts of figures such as sales cost cash Profit interest

rate using different assumptions another word for forecast is what we call scenarios for example let us assume that a forecast of the Income statement for a business at the end of the year assumes that sales will grow by eight percent over the previous year and cost will grow by

six percent a manager might ask for an alternative scenario where sales increased by twelve percent and cost increased by nine percent and the other scenario where sales decreased by three percent and cost increase by one percent i hope you learned something on this vlog thank you for joining me

and enjoy learning you