NAME: Jobilyn P.

Guerta SUBJECT: Personal Finance

YR&SEC.: BSBA HR 3-D DATE: April 28, 2022

ACTIVITY 3

FUNDAMENTAL TOOLS AND CONCEPTS OF FINANCIAL PLANNING

IN BUSINESS FINANCE
FINANCIAL PLANNING
- A process including budget standard preparation, cash management, and working capital
management
So, in here the businesses must have a projection, so that they can identify what are the necessary
actions that the businesses need to do them to taking care of their financial stability.
STEPS IN PLANNING
1. Strategic Plan Review
- this is defined on what are the business are and also, they can lease some of the goals for the
business.
2. Develop Financial Projections
- so, once we talk about projection it deals with the forecasting, this is how did you predict what
will be the income of your business.
3. Arrange Financing
- Arranging financing is a critical component of a successful mergers and acquisitions
transaction. Adequate financing ensures that the agreed-upon purchase price is paid in full by the
buyer to the seller.
4. Plan for Contingencies
- A contingency plan is a plan of action designed to assist an organization in responding to an
event that may or may not occur. Contingency plans are also known as "Plan B" because they
can be used as a backup plan if things don't go as planned.
Also, using a SMART, it can help to provides the clarity, focus and motivation you need to
achieve your goals. It can also improve your ability to reach them by encouraging you to define
your objectives and set a completion date. SMART goals are also easy to use by anyone,
anywhere, without the need for specialist tools or training.
5. Monitor
- all about having regular and up-to-date financial reports to review project progress and make
resourcing decisions.

CONCEPT OF FINANCIAL PLANNING

1. Sales Budget
- A sales budget is a financial plan that forecasts a company's total revenue for a given period of
time. To forecast how the company will do, it looks at two factors: the number of products sold
and the price at which they are sold.
The most important account in the financial statement in making a forecast is sales since most of
the expenses are correlated with sales, and the sales budget has an external factor which are GDP
growth rate, inflation, foreign exchange rate, income tax rate, development in the industry,
political crisis, regulatory environment, competition and last is economic crisis. Also, it has an
internal factor which are production capacity, manpower requirement, management style of
managers, reputation and network of the controlling stockholders and lastly is financial resources
of the company production budget.
2. Production Budget
- The production budget is determined from a combination of the sales estimate and the intended
amount of finished goods inventory to have on hand to compute the number of units of items that
must be manufactured (usually as safety stock to cover for unexpected increases in demand).
3. Budgeting
- The process of budgeting is making a strategy for how you'll spend your money. A budget is a
type of spending strategy. Making a spending plan allows you to know ahead of time whether
you'll have enough money to do what you need or want to do. Simply said, budgeting is the
process of balancing your income and expenses.
4. Cash Budget
- A cash budget is a forecast of a company's cash flow over a set period of time. This could be a
budget for a weekly, monthly, quarterly, or annual period. This budget is used to determine
whether the company has enough cash to continue functioning during the specified time period.