Financial plans, budgets and the continuity of your business
Financial plans and budgets are essential tools for drawing up business actions in the short and mid-term and as well as to compare forecasts with current results. Periodic comparative analysis is vital to be able to make timely decisions aimed at the continued growth of your company or the transformation of your business.
When business planning, attempts are made to mitigate risks by formulating courses of action in different scenarios to take advantage of the opportunities and resources available, deciding in advance the financial needs and other resources, and their correct application to achieve the best combination of returns and risk.
The business planning process includes the design of the strategy: formulation of objectives, scenarios, alternatives, and selection as well as the implementation: formulation of plans and budgets.
Strategic and financial planning activities include:
Long term business planning
Development of business plans and financial projection models considering 5 or more years,
Scenarios evaluation for the company due to changes in business variables such as products, prices, margins, suppliers, investments and divestitures,
Financing needs assessment and conditions for enterprise loans,
Validation of economic and operational hypotheses,
Development of financial projections models to analyze M&A transactions, strategic alliances, design of operations structure, and synergies analysis.
Short term planning
Carrying out company’s budget one year ahead,
Comparative monthly/quarterly financial analysis models between the current results and the budget,
Deviations analysis and corrective measures if needed, adjustment of projections if necessary or rolling forecast,
Setting and monitoring KPIs to measure operational and financial performance,
Short term cash flow follow-up through periodic analysis to anticipate surpluses/deficits of treasury,
Short-term financing needs assessment: includes working capital cycle analysis, liquidity, solvency, and coverage of debt ratios analysis, and economic and interest rate scenarios analysis.
Regardless of the size of your business, financial planning is an increasingly necessary function for your company to make informed and precise business decisions in an increasingly competitive business world.
Do you need a financial plan for your company? Please to contact us
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