Overview
Part 6, the final section of the Money Flow lesson, discusses and describes the generalities and particulars associated with the firm's financial planning process. As we will see, this process is ultimately financial statement oriented. Like any plan, a financial plan makes and directs actions intended to achieve objectives. While a firm's financial plan is perhaps the most important component of planning, it does not take place in a vacuum. Rather it is part of the more general task of overall corporate planning.
An actionable financial plan must be viewed as part of the firm's overall strategic plan. A long-run overall strategic plan states the firm's broad goals and how to achieve them. An actionable financial plan is one that ultimately translates the broader goals of the firm into numbers and/or financial statements. When you hear the phrase, "The devil is in the details," you should think of the particulars associated with composing and implementing a financial plan as the "details". In this light a financial plan will provide a roadmap of sorts for guiding and coordinating managerial action in pursuit of the firm's long-run goals and objectives.
