Share
Explore BrainMass

Key financial components in a strategic plan

What information should be included in a financial forecast accompanying a strategic plan and why?

Solution Preview

Key financial components in a strategic plan is :
It should include forecasted financial statements. Financial statements are useful tools for evaluating both profitability and liquidity. Used separately, or in combination, the income statement and balance sheet help interested parties to measure a company's current financial performance, and to forecast its profit and cash flow potential. Profitability is an increase in stockholders' equity resulting from revenue exceeding expenses, whereas liquidity refers to a company's ability to meet its cash obligations as they come due. Thus it will include profitability Forecast, Balance sheet and Income statement.
It should also include Net present value analysis, NPV is defined as the difference between an investment's market value and its cost. It is only a good investment if it makes money for the company so a positive NPV will be needed. The projects can be ranked ...

Solution Summary

This discusses the Key financial components in a strategic plan

$2.19