CASH FLOW

AND FINACIAL
PLANNING
JOYCE ANTONETTE CELESTINO

FINANCIAL
PLANNING
PROCESS

Two Key
Aspects

CASH PLANNING

PROFIT PLANNING

Two Types of
Planning Exercises

LONG TERM (STRATEGIC) PLANNING

Consider

proposed outlays for fixed assets

Research and development activities

Marketing and product development actions

Capital structure

Major source of financing

Termination of existing projects, product lines, or lines of business

Repayment or retirement of outstanding debts

Any planned acquisitions

Two Types of
Planning Exercises
SHORT TERM

(OPERATIONAL)
PLANNING

OPERATIONAL PLANS
TWO LEVELS:
SHORT -TERM
LONG TERM

IT CONSISTS
OF :
MARKETING PLAN
PRODUCTION PLAN
HUMAN RESOURCE

PLAN
FINANCIAL PLAN

OPERATIONAL
OBJECTIVES

LONG-TERM
GOALS OF
THE FIRM

STRATEGIC
PLAN

OPERATIONAL
OBJECTIVES

OPERATIONAL
PLAN

CASH
FLOW
ANALYSIS

CLASSIFYIN
G INFLOWS
AND
OUTFLOWS
OF CASH

INFLOW

OUTFLOW

Decrease in any asset

Incease in any liability
Net profis after tax
Depreciation and
other noncash
changes
Sale of stock

Increase in any asset

Decrease in any
liability
Net loss
Dividends paid
Repurchase or
retirement of stock

CASH FLOW
GENERATION
PROCESS

IMPORTANCE
OF CASH
FLOWS

TS
VERSUS
CASH
FLOW
CONCEP
TS

CASH
FLOW AND
SHAREHOL
DER
WEALTH