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ECONOMIC AND FINANCIAL PLANNING AND BUDGETING - Coggle Diagram
ECONOMIC AND FINANCIAL PLANNING AND BUDGETING
UNIT 2: BUDGET FOR SMALL AND MEDIUM ENTERPRISES
EXPENDITURE ESTIMATES
Maintaining adequate liquidity to pay debts or other commitments reduces risk for owners and perpetuates the life of companies.
Financial management is in charge of two different functions as input to maximize the net present value of the investment of the owners of the company.
RECOVERY PROJECTION
This is the most interesting part for entrepreneurs: projecting what they will get back by investing in a company.
Considering possible profits as a goal to achieve will help us achieve them, but for this, you have to calculate them first.
PREDETERMINATION OF FORECASTS
For the development of this function, the financial manager must obtain a broad and total vision of the company's operations.
It is essential that, in the shortest possible time, society recovers the money from these assets to pay its bills and reinvest in other assets to achieve further expansion and increase its profits.
If the expected cash outflows exceed the income and available balances, the financial administrator will be forced to obtain funds from external sources of the company.
RISK CALCULATION
Policies relating to the management of accounts receivable lead us back to the dilemma of liquidity versus productivity or profitability.
As we move from the groups of clients who are most likely to pay their debts to clients who are less likely to pay them, we do two things; add us to our income and add us to our expenses.
UNIT 1: SHORT-TERM AND LONG-TERM PLANS
SALES PLAN
.The main requirement before starting a marketing action is to set objectives in all areas of the company
The evolution of sales must be assessed from different points of view:
By markets: The evolution of the market is studied taking into account different aspects: quantitative demographic change (distinction between age groups, social strata and purchasing power); changes in social customs that may imply changes in consumer habits; technological changes that will affect both the purchasing power of individuals and their willingness to spend more or less.
By points of sale: A comparative analysis of the sales of each point is carried out and the causes of the differences are determined.
By Products: The evolution of a product's sales is analyzed taking into account the different stages, market outings, market introduction,
REINVESTMENT AND GROWTH
In a company there are prospects for the distant future in the long term.
If you want a company to emerge, it is clear that you have to invest.
Not only money is invested, but also time, effort, expertise, knowledge, and so on. You have to reinvest to keep growing.
SHOPPING PLAN
For the purchase program to work, there are a number of basic rules:
Schedule repetitive purchases that correspond to the highest sales
regular or sequential.
Do not buy without express need (stock control).
Always analyze product offers, assessing the relationship between
storage quantities and price,
Know all the suppliers in the sector and analyze and verify their
products, qualities, prices and reliability in delivery times,
Systematic quality control and accountability
MARKETING PLAN
For a sales team to be able to sell the maximum amount of the product it sells, it must know it perfectly technically, and it must also be aware of the substitute products, those of the competition and the news in the sector.
Some individual buyer motives that can be tried to split for clarification purposes are:
Emulation
Imitation
The satisfaction of the desire to know.
Saving time or effort
The benefit
UNIT 4: FINANCIAL AND PROJECTED STATEMENTS
STATEMENT OF INCOME
When comparing two financial elements we can look for two different types of valuations. On the one hand we can study the existing proportion between two values, which leads us to a structural approach, on the other we can check its evolution over time, which leads us to an evaluation of the company's own assets.
This type of analysis aims to determine what the framework in the company is to face the future.
Yes one company does not have adequate profitability, a good solvency can deteriorate over time. On the contrary, if there is good profitability, you can balance situations of financial deficiency.
FINANCIAL REASONS
One of the tools frequently used to make these verifications is a financial ratio or index, which relates two elements of financial information to each other by dividing one amount by the other.
.We calculate the ratios because in this way we obtain a comparison that can be more useful than the numbers themselves
The financial ratios that are generally used are essentially of two kinds.
The first summarizes some aspect of the financial condition of the company at a point in time, the moment when the balance sheet has been prepared.
The second kind of ratio summarizes some aspect of the company's performance over a period, usually a year.
BALANCE SHEET
The balance sheet is structured in two parts: assets and liabilities.
Both assets and liabilities are composed of various items that can be grouped according to their greater or lesser liquidity, that is, their availability or their distance from it as far as assets are concerned, or to the extent that the asset is refers, or in its degree of enforceability in relation to the liability.
The first interpretation that we must make is how these items are distributed within assets and liabilities in a percentage way. It is what we call a vertical study within a static approach.
ANALYSIS OF PERIODS TO COME
Both the legal evolution of the company and that of its physical situation provide a frame of reference that allows a more adequate interpretation of the economic-financial analysis.
The analysis of a company can be carried out from two different angles: static and dynamic.
Static does not take time into account. It is based on the balance sheet, which is the one that reflects the situation of a company at a given moment, it is a photograph, a snapshot that tells us what the structure of a company is at that moment and allows us to make vertical comparisons of composition within the assets and liabilities, and of the magnitudes within and between them.
The dynamic analysis takes time into consideration, providing the possibility of evaluating the situation of the company at various times and, in this way, determining the trends in which the different assets and their interrelationships have moved.
UNIT 3: COMPANY PROSPECTS
GROWTH ASPECTS
Economic conditions seldom remain immobile.
Today we can raise our levels and talk about a recession not only when activity decreases in absolute terms but also when activity grows less than the growth rate of our full employment economy.
Qualitative methods are useful, because when data is lacking or when data from the past are not reliable to redefine the future. In these cases, data from the past is processed using time series or causal models to make a forecast.
DEVELOPMENT COOPERATION ASPECTS
In these new situations, professionals, in general, it is not exactly job security that they value the most. The type of work, vacations and other fringe benefits influence their acceptance more than even their financial performance. If salaries in Panama went up considerably, the workplace would be very important.
The employer of the small business has at least the possibility to see the external appearance of the one who enters his office, office or factory.
For the individual, the success or failure can mean an easy or difficult professional life, in constant progress or with inevitable setbacks and
delays.
ASPECT OF THE ECONOMY
The sequence in which pending jobs should be processed is important in determining the efficiency and effectiveness of the intermittent system.
Within a manufacturing context, intermittent systems are traditionally known as workshops.
PICTURE AND SERVICE ASPECT
The product image is often suggested by the packaging.
The packaging is essential for many products, but other times buyers are loyal to the brands they consume on a regular basis for having used them successfully over time,
Advertising campaigns are often based on the need to make a product familiar, bombarding the potential customer with the repetition of a name, mentioning so many times that from the repetition the idea arises that they have been known for a long time.