16
Financial Planning and Managing Growth
Learning Objectives
Explain what a financial plan is and why financial planning is so important.
Discuss how management uses financial planning models in the planning process, and explain the importance of sales forecasts in the construction of financial planning models.
Discuss how the relation between projected sales and balance sheet accounts can be determined, and analyze a strategic investment decision using a percent of sales model.
Describe the conditions under which fixed assets vary directly with sales, and discuss the impact of so-called lumpy assets on this relation.
Explain what factors determine a firm's sustainable growth rate, discuss why it is of interest to management, and compute the sustainable growth rate for a firm.
In January 2008 the decline in performance of the Starbucks Corporation had come to a head. Former CEO ...
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