Financial planning process

Financial planning is an important aspect … the firm’s operation and livelihood since it provides road maps … guiding, coordinating and controlling the firm’s actions in order to achieve its objectives. Two key aspects … the financial planning process are cash planning and profit planning. Cash planning involves the preparation of the firm’s cash budget; profit planning is usually done … means of proforma financial statements.

The financial planning process begins … long-run, or strategic, financial plans that in turn guide the formulation of short-run, or operating, plans and budgets. Generally, the short-run plans and budgets implement the firm’s long-run strategic objectives.

Long-run (strategic) financial plans are planned long-term financial actions and the anticipated financial impact of those action. Such plans tend to cover periods ranging … two … 10 years. Long-run financial plans consider proposed fixed-assets outlays, research and development activities, marketing and product developing actions and major sources of financing.

Short-run (operating) financial plans are planned short-term financial actions and the anticipated financial impact … those actions. These plans most often cover a one- to two-year period. Key inputs include the sales forecast and various forms of operating and financial data. Key outputs include a number … operating budgets, the cash budget and proforma financial statements.

Read the text once again and answer the following questions: What are two key aspects of financial planning? What do short-run and long-run plans include?

Ex. 6. Join the halves. Translate the sentences into Russian.

1. Financial markets provide the mechanism for

2. Investment analysis focuses on

3. When a company obtains capital from external sources

4. Equity financing and debt financing provide

5. Working capital refers to

6. Financial management is concerned with

7. Transactions is short-term debt instruments that

8. Major securities traded in the capital market

9. When prices rise,

10. Finance involves

11. More experienced individuals would be eligible for

a. the funds used to keep business working or operating.

b. carrying out the allocation of financial resources.

c. take place in the money market.

d. include bonds and both common and preferred stock.

e. the financing can be either on a short-term or a long-term arrangement.

f. how individuals or portfolio managers select appropriate financial and real assets.

g. important means by which a corporation may obtain its capital.

h. how firms acquire and allocate funds.

i. loan officer, branch manager, or senior analyst.

j. the securing of funds for all phases of business operations.

k. the same goods, cost more in terms of dollars, and the dollar’s value in term of those goods falls.

Ex. 7. Translate the text into Russian in written form.