BUSSFIN WEEK 5

Question 1

is a process of setting objectives, assessing assets and
resources, estimating future financial needs, and making
plans to achieve monetary goals.

Answer 1

Financial Planning

Question 2

Financial planning may mean the same things to different people. TRUE OR FALSE

Answer 2

FALSE

Question 3

is the means by which a business or individual defines
financial goals and creates a strategy to reach them

Answer 3

financial planning process

Question 4

A financial plan not only serves as an organizational checklist of actions, but
can also be a document against which to check progress to see if a strategy
change is needed. TRUE OR FALSE

Answer 4

TRUE

Question 5

THE summary of various component projections of revenues and
expenses for the budget period. They indicate the expected net income for the period.

Answer 5

Projected Financial Statements

Question 6

*shows your assets, liabilities and equity at a particular point
in time.
*It is basically a snapshot of your financial position.
*The basic accounting formula is assets equal liabilities plus
owner’s equity.

Answer 6

BALANCE SHEET

Question 7

*Captures profit performance, demonstrates immediate
capability to service debt for banks or real potential for
growth in returns for venture capital.
*This is often expressed in terms of sales volume, or
compared to industry benchmarks.

Answer 7

INCOME
STATEMENT

Question 8

*is the most critical forecast since it reflects viability rather
than profitability.
*It can also be the most uncertain statement as projections
extend into the future.

Answer 8

STATEMENT OF
CASH FLOW

Question 9

financial statements provide a forecast of the overall trading results of the
business and a basis for the operational plan. TRUE OR FALSE

Answer 9

FALSE (PROJECTED FINANCIAL STATEMENTS)

Question 10

6 steps in financial planning process

Answer 10

1. establish and define the client-planner relationship
2. Gather Client Data, Including Goals
3. Analyze and Evaluate Your Financial Status
4. Develop and Present Financial Planning Recommendations and/or Alternatives
5. implement the Financial Planning Recommendations
6. Monitor the Financial Planning Recommendations