Chapter Summaries
17.1 Understand the goals of financial planning. (pgs. 554–555)
Summary:
The goal of financial planning is the development of a plan that a firm can use as a guide to the future. Such a plan provides the firm with estimates of its financing requirements. However, financial planning has a second and more subtle goal. The very fact that the firm’s management team goes through a careful and thoughtful planning exercise is useful in itself. That is, the very act of thinking systematically about the future helps the firm’s management develop an understanding of what may happen, and this is in itself a valuable exercise.
Key Terms
- Cash budget, page 555
A plan for a future period that details the sources of cash a firm anticipates ...
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