Financial Planning For Financial Management Essay

761 Words Jul 21st, 2015 4 Pages
According to Glenn Stevick, financial planning process has six steps: “establish financial goals, gather relevant data, analyze the data, develop a plan for achieving goals, implement the plan and finally, monitor the plan” (Stevick, 2006). It is imperative for a business to have and use because without establishing goals and managing where money is being expended, those goals may end up being obsolete and as a result, a closed business. In order to accomplish these six steps, there are two fundamentals of business in regards to financial management or financial planning. These two are “represented by management accounting and corporate finance; Managerial accounting includes techniques for financial analysis, costing the activities of the business and forecasting financial requirements. Corporate finance includes functions such as valuations of assets and projects, deciding on the best investment portfolio, reducing risks through hedging operations, and choosing/monitoring the capital structure” (Gopinathan, 2009).
Managerial accounting covers the first three steps in terms of establishing the goals through data gathering on costs projected and perceived through the company while corporate financing allows the last three steps of planning, establishing and following through with the steps to ensure a business is successful in its efforts. The very essence of financial planning is to be goal based, whether it be through savings, investing and even risk management. The…

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