Chapter 6: Financial Planning and Forecasting

Question 1

What is mission statement?

Answer 1

• Condensed version of firm’s strategic plan

Question 2

What is corporate scope?

Answer 2

• The firm’s lines of business and geographical area of operations

Question 3

What is statement of corporate objectives?

Answer 3

• Goals to guide management

Question 4

What are corporate strategies?

Answer 4

• Approaches to obtain firm’s goals

- Big picture

Question 5

What is an operating plan?

Answer 5

• Detailed implementation guidance for management to reach corporate objectives
• Based on corporate strategies

Question 6

What is a financial plan?

Answer 6

• Financial assumptions, projected financial statements and projected ratios