BU121 Chapter Notes - Chapter 5: Financial Plan, Cash Management, Cash Flow
Document Summary
The financial managers responsibilities and activities: they analyze financial data prepared by accountants, monitor the company"s financial status and prepare and implement financial plans, the key activities of financial manager are: Financial planning: preparing the financial plan, which projects revenues, expenditures and financing needs are for a given period. Investment: investing the company"s funds in projects and securities that provide high returns in relation to their risks. Management can assess the financial effects of various business strategies. Cash budgets: forecasts a company"s cash inflows and outflows and helps the company plan for cash surpluses and shortages. Capital budget: forecasts a company"s outlays for fixed assets typically covering a period of several years. Operating budgets: combines sales forecasts with estimates of production costs and operating expenses to forecast profits. Based on individual budgets for sales, promotion, purchase of materials, factory and operating expenses: budgets are used to monitor and control the performance of a division, a department, or an individual manager.
