Chapter 2: Financial Management and Planning
Terms
undefined, object
copy deck
- The process of working with or through others to achieve an individual or business goal by efficiently and effectively using resources.
- Management
- The five basic functions of a manager.
- Planning, organizing, staffing, directing, and controlling operations.
- A systematic process that takes us from some current state to some future desired state; involves the setting of goals and the development of methods for achieving those goals.
- Planning
- The development of long-term plans for a business; establishing overall company priorities.
- Strategic Planning
- Related to specific functional areas such as accounting, marketing, or human resources; support and are driven by the strategic plan.
- Functional Plans
- The gathering of all of a firm's monetary requirements for the support of each functional plan.
- Financial Planning
- The precusor to establishing a plan.
- Goal Setting
- A measurable objective that can be reached in a specified time frame.
- Goal
- 1) Must be measurable, 2) Must be acheivable, and 3) Must have a time frame connected to them
- The 3 characteristics of a goal
- The three basic financial goals required by a for-profit organization.
- Maximize the welath of the business owners (investors) over the life of the business, to meet interest payments on debt, and to grow
- Developing a structure that will allow the owners to carry out their plans.
- Organizing
- Obtaining the most capable ersonnel to implement the business plans.
- Staffing
- What a job requires with respect to education, training, and basic skills.
- Job Requirements
- Depicts the duties that must be performed by the employee who will be hired.
- Job Description
- Providing proper guidance and direction to others who will accomplish the organization's mission.
- Directing
- Next to planning, this is the most difficult process to undertake. A three-step process that involves establishing a standard of measurement, measuring actual performance against the standard, and taking corrective action when actual performance varies f
- Controlling
- The part of a business plan that investors will read first, inspiring them to read further; usually one to two pages maximum.
- Executive Summary