Strategy and Financial Planning Assignment

Strategy and Financial Planning Assignment1. Budgeting is mapping out the sources and uses of funds
for future periods requiring both ______________ analysis, including ______________, and ______________.
______________ analysis includes both ______________
and ______________ analysis to develop forecasts of future
______________ and ______________. ______________
techniques are used as a measurement device but instead
of using accounting to ______________ what has happened, in budgeting, firms use accounting to
______________ what we expect to happen in the future.
2. A(n) ______________ advantage is the advantage one firm
has over others in terms of the cost of ______________ or
______________ goods or services. A(n) ______________
advantage is the advantage one firm has over another
because of the structure of the markets (input and output
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markets) in which they both operate. Only through having
some type of advantage can a firm ______________ in
something and get ______________ back in ______________.
3. A(n) ______________ of gaining a competitive or comparative advantage is consistent with ______________ shareholder wealth. This is because projects with
______________ value arise when the firm has a competitive or comparative advantage over other firms. A strategy
is the direction a firm takes to meet its ______________.
A(n) ______________ plan is how a firm intends to go in
that direction. In ______________ management, a strategic
investment plan includes policies to seek out possible
investment ______________.
4. ______________ forecasts are an important part of financial planning. ______________ forecasts can result in
shortages of ______________, inadequate short-term
______________ arrangements, and so on. If a firm’s sales
forecast ______________ its mark, either ______________
or ______________ sales, there are many potential
______________.
5. To predict ______________ flows, we must forecast sales
that are uncertain because they are affected by future
______________, ______________, and ______________
conditions. Nevertheless, we can usually assign meaningful degrees of ______________ to our forecasts. We forecast ______________ in one of the following ways:
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______________ analysis; ______________ surveys; and
______________ of management.
6. The experience of a firm’s management and their
______________ with the firm’s ______________,
______________, and ______________ make them reliable
forecasters of ______________ sales. The firm’s own managers should have the ______________ to predict the market for the goods and services and to ______________ the
costs of producing and marketing them. But there are potential ______________ in using management forecasts. These
forecasts may ______________ the firm to ______________
more resources, such as a larger capital budget and additional personnel, to that manager.
7. ______________ is an important element in planning for
both the ______________-term and the ______________-
term. But forecasts are made by ______________. Forecasters tend to be ______________, which usually results
in ______________ than deserved forecasts of
______________ sales. In addition, people tend to focus on
what worked in the ______________, so past successes
carry more ______________ in the developing forecasts
than an analysis of the future. One way to avoid this is to
make managers ______________ for their forecasts,
______________ accurate forecasts and ______________
those that are way off the mark.
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8. In ______________, we bring together analyses of
______________ flows, projected ______________ statements, and projected ______________ sheets. The
______________ flow analyses are ______________ important although generation of the ______________ statement
and ______________ sheet is needed. Most firms extend or
receive ______________, so cash flows and net income do
not ______________.
9. A(n) ______________ balance sheet is a(n) ______________
balance sheet for a(n) ______________ period that summarizes assets, liabilities, and equity. A pro forma
______________ statement is the projected ______________
statement for a future period that summarizes
______________ and ______________. Together, both
projections help identify a firm’s ______________ and
______________ needs.
10.The ______________ of accounts method starts with the
______________ budget. Before putting together the
______________ income statement and balance sheet, we need
to see how the various ______________, ______________, and
______________ accounts change from month to month,
based on the information provided in the cash budget.
The ______________ method uses historical relationships
between ______________ and each of the other
______________ statement accounts and between
______________ and each of the ______________ sheet
accounts.1. Why is financial planning important?
2. What is the purpose of the budgeting process?
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3. Explain forecasting with regression analysis.
4. How can the analysis of cash flows evaluate the performance of a firm?
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5. What are the techniques used for cash flow analysis and
forecasting?