During our objectives this week we as a team learned many things that truly most of us never thought of before this class. Our objectives for week two were: Describe the relationship between strategic planning and financial planning, prepare a cash budget, perform a break-even analysis, and calculate present value and future value of cash flows. These were words of a foreign language to us at the beginning but now we have a better understanding of how it plays a role in our everyday lives.
No matter if it is a personal decision or a business venture it is vital to plan both strategically and financially in order to survive and subsequently thrive. To put in place strategic plan we need to include a way of fulfilling ones mission and it should be effective and efficient. It should be clear on the goals, objectives, and action steps that need to be taken to accomplish them. Having daily and weekly meetings to discuss the company’s strategic and financial plans keeps all of us on the same path and to remain focused. Bringing in investors to provide initial cash to build the software solutions made it essential to plan the best course for spending the capital. Having to answer to these investors created the need to calculate present and future cash flows along with our strategic plan. Properly calculating sales pipeline enables us to plan new hires, allocate money for updated product, and assess the need for future investment capital
The Business plan on Target Strategic Outline Wal Mart
I. Mission Statement: II. External Environmental Analysis. Remote environment - these are the factors, which affect all businesses, and frequently, neither the business nor the industry has any control over them - examples: i. Entry barriers ii. Social iii.Political iv. Technological. Ecological factors vi. Economic factors: The economy has a major influence over the retail industry.Target's ...
The team project allowed us to get a better understanding of how to apply the ratio’s to determine whether our investment is going into an organization that can create shareholder wealth. The calculations are not difficult but it is a challenge to gather the information needed off of the financial statement. Reviewing the financial statements of PepsiCo was overwhelming.. Looking up financial information for a company like Pepsi-Cola was interesting, in that there are so many links, with it being a large organization. It takes a while to narrow down where you really would like to go, but it was very informative to see all that they have accomplished. So, while it was a no typical task for all of us it helped us, individually understand the complexity of financial statements and the need each of us will have in the future to rely on those in the finance department for answers
Additionally, during week two we learned the cost of capital which a company’s weighted average of returns on securities that the company use to finance the organization, and also called the weighted average cost of capital (WACC).
The three steps procedure for estimating the WACC, was so what of a struggle for me, because I found that I was struggling with the definitions of the formula, and it was difficult to remember all the definitions. This week also learning about risk analysis, and the beak-even analysis that has information on variable cost and fixed cost, and the total variable and fixed cost get compared to the sales revenue.
Lastly, this week we ventured into MathLab. With this source of technology, some of us were able to get examples and have step-by-step examples that we can write down in order to ensure that we get the correct answers without problem. While others found it easier to utilize yahoo to find the information needed to calculate the ratios. The investment brokers, such as Fidelity and E-trade, provide you with the ratios on a year over year bases so you can easily determine the value of your investment. They provide the industry average which gives you the opportunity to compare the ratios of your investment to the industry. You can then determine if you are below or above the industry standards.
The Business plan on Industry Averages And Financial Ratios Paper Rough
Financial management is important for any successful business. Good financial management requires proper planning and keeping up with the conditions of the business’ finances situation through ratio analysis and other performance measures. These analysis are done to ultimately keep up with the financial trends in a company and locate their strengths and weaknesses so they can be altered ...
While each of us has our own experience and interaction with the information we discussed and learned, we all feel that it benefits us and our families. The knowledge of numbers, especially finances is one thing that never changes, yes the numbers in the equation will but the process to achieve success remains the same. With precise strategic and financially planning, we as individuals and as future business owners can ensure stability at least a little longer. With everything we learned this week we cannot wait to see what the next couple of weeks have in store!