BU393 Chapter Notes - Chapter 14: Strategic Planning, Investment Banking, Capital Budgeting
Document Summary
Strategic planning: dete(cid:396)(cid:373)i(cid:374)i(cid:374)g the (cid:272)o(cid:373)pa(cid:374)(cid:455)"s goals a(cid:374)d ho(cid:449) to allo(cid:272)ate (cid:396)esou(cid:396)(cid:272)es to a(cid:272)hie(cid:448)e goals. Financial planning: forecasting the financial implications of the strategic plan to identify how much money is needed. Uses the same process to project cash flows as capital budgeting. Difference : fin planning focuses on the whole company and not a single project. Analysts in investment banking and portfolio mgt use tools of fin planning to estimate the fair value of a fi(cid:396)(cid:373)"s e(cid:395)uit(cid:455) to (cid:373)ake i(cid:374)(cid:448)est(cid:373)e(cid:374)t de(cid:272)isio(cid:374)s (cid:272)alled discounted cash flows (dcf) Sales forecasts project price and quantity seperately - forecast by identifying drivers. Drivers: underlying economic factor that determines the future path of the variable. Simple quantity forecast - based on an industry sales forecast and market share forecast. Sales forecast for retailers same -store sakes growth (sssg) : growth in sales per square foot. Most of the accounts are related to sales forecast to generate forecasted statements.
