大连海事-财务管理研究生公司理财chapter-04.ppt

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Long-Term Financial Planning and Growth
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Key Concepts and Skills
Understand the financial planning process and how decisions are interrelated
Be able to develop a financial plan using the percentage of sales approach
Understand the four major decision areas involved in long-term financial planning
Understand how capital structure policy and dividend policy affect a firm’s ability to grow
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Chapter Outline
What is Financial Planning?
Financial Planning Models: A First Look
The Percentage of Sales Approach
External Financing and Growth
Some Caveats Regarding Financial Planning Models
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Elements of Financial Planning
Investment in new assets – determined by capital budgeting decisions
Degree of financial leverage – determined by capital structure decisions
Cash paid to shareholders – determined by dividend policy decisions
Liquidity requirements – determined working capital decisions
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Financial Planning Process
Planning Horizon - divide decisions into short-run decisions (usually next 12 months) and long-run decisions (usually 2 – 5 years)
Aggregation - combine capital budgeting decisions into one big project
Assumptions and Scenarios
Make realistic assumptions about important variables
Run several scenarios where you vary the assumptions by reasonable amounts
Determine at least a worst case, normal case and best case scenario
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Role of Financial Planning
Examine interactions – help management see the interactions between decisions
Explore options – give management a systematic framework for exploring its opportunities
Avoid surprises – help management identify possible es and plan accordingly
Ensure feasibility and internal consistency – help management determine if goals can be plished and if the various stated (and unstated) goals of the firm are consistent with one another
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Financial Planning Model Ingredients
Sales Forecast – many cash flows depend directly on the level of sales (often estimated sales growth rate)
Pro Forma Sta