Importance Of Financial Planning And Decision Making

This paper examines the strategic management sector pertaining to financial planning and decision making methods. Managers use these tools often, in order to carry on day to day operations at their firms. Finding the right combinations of cost allocation and implementing strategic measures, can be complex at times. However, to remain competitive in the industry, companies utilize benchmarking and other techniques in order to monitor their competitors’. This paper analyzes various approaches that managers may use, in order to make sound financial planning and decision making.

Strategic Management: Planning and Decision Making

The importance of an organization remaining successful, relies on various strategic

Blocher et al (2013), added that at the end of an operating period, managers view the budget plan to interpret any variance between actual and budgeting expenditures and operating outcomes. Under certain circumstances, a firm uses a budget plan, to ensure accurate spending, monitoring costs, and to analyze a subunit’s accomplishment. For example, the government use these tactics when a fiscal year budget has not been approved; which is known as a continued resolution. The lawmakers allocate a portion of funds to sub-agencies in order to remain operational. However, the budget plan allows lawmakers to monitor costs, planning, spending and the sub-agency’s goals for accomplishments. Blocher et al (2013), indicates several components that make up a budget process, ranging from small firms which make take a few days or weeks to complete; corporations and government which may take an extended period of time.

• Budget Committees oversee all budget matters to include, allocating funds to the departments, coordinating budget preparation and justifications and monitors unit activities throughout the financing

The information provided for Triple F Health Club, have a few issues. The first issue is the balance due for the new equipment, which is $15k and the company wants to invest in more equipment for $25k. Although the company plans to purchase the equipment in the upcoming year, the current balance due will reduce the overall earnings. Additionally, the company’s financial information and the owner’s personal account should not be recorded as one balance (providing it is the owner’s personal account). Another flag is the $2.5k balance for accounts payable (utilities and supplies). While it is a small amount, the company could pay it now instead of waiting for the next period. Also, the remaining balance on the mortgage may cause issues if the company’s liabilities increases or the projected number of patrons