Business financial planning is a vital activity aspect of building and maintaining a successful company. A comprehensive business plan can help you attract investors as well as concentrate on key processes which will insure your business is profitable. Software packages can assist you with this process if you want ongoing assistance, as can financial consultants. As you explore this topic, you will run into some key terms that you will need to understand.
An income statement is also sometimes referred to as a profit-and-loss statement; it is a company's financial statement about how much revenue a company has made before expenses are taken out. It is also sometimes known as the "top line." Business financial planning consultants can assist organizations with developing an income statement.
Cash flow forecasting
Cash flow forecasting consists of the modeling of a company's future financial liquidity (assets that can be quickly converted to cash) over a particular time frame.
A company's balance sheet is a summary of assets, liabilities and ownership for a certain date, usually at the end of a fiscal year. It is a snapshot of the company's financial condition. Business financial planning consultants can offer services in developing a balance sheet.
Sales projection or forecast
A sales projection or forecast is a plan or prediction of what level of sales can be achieved. It is usually based on historical data, an analysis of market trends, and estimates on what is achievable by sales management. Business financial planning consultants can assist an organization in developing a sales forecast.
Liquidity is a measure of a business' ability to pay its debts when the debts are due.
CAGR, compound annual growth rate
CAGR or compound annual growth rate is an investing term that represents the annualized gain which is earned by an investment in a given time horizon. It is often used to compare the growth of two investments. In financial planning, business financial planning consultants can help a business measure a firm's CAGR.