Financial Planning and Budgeting
It puts the plan into a clear and numerical format.
Budgeting
It refers to the mix of debt and equity a company uses to finance its activities.
Capital Structure
It allows managers to understand how the business is performing by reviewing data from financial statements.
Financial Analysis
It helps an organization map out how it will use its money to support its objectives.
Financial Planning
What are the two types of financing?
Internal Financing and External Financing
Performance evaluation compares actual results with ___________.
Planned Targets
How do financial planning and budgeting support organizational goals?
They ensure resources are used effectively, prevent overspending, and guide decisions toward long-term goals.
Give at least two (2) examples of internal financing.
Retained earnings and selling unused assets.
According to Riggs et al. (1979) emphasize the importance of comparing actual results with planned targets to ensure _________ and encourage continuous improvement.
Accountability
What is the main purpose of financial planning in an organization?
Its purpose is to estimate future income and expenses so the organization can use its money wisely and support its goals.
Why can external financing be risky?
Because it often involves debt and repayment obligations.
What are the three tools in financial analysis?
Ratio analysis, trend analysis and comparison
Why is budgeting important in daily operations?
Because a budget provides a numerical guide on how much the organization expects to earn and spend, helping managers control operations.
According to Riggs et al. (1979), finding the right balance is important because too much debt _______________, while too much equity may reduce control and ownership.
increases financial pressure
Why financial analysis is important?
it helps identify areas for improvement and guide decision-making.