Financial plan, capital structure and valuation
Watch the video and then summarise what you have learned.
The financial plan examines if the organisation’s implementation and execution of its strategies are contributing to the bottom line improvement of the company.
The financial plan is a tool that allows firms to evaluate current and future financial performance to ensure that it has the adequate amount of capital and capital structure to meet financial requirements, including making strategic decisions about the firm’s goals and objectives.
The purpose of financial analysis is to establish a proper basis for comparison to determine if the organisation has performed at an expected level. The financial plan consists of the following elements, projected balance sheet, projected cash flow, projected sales, profit and loss projections, breakeven analysis, sensitivity analysis.
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