Financial Planning

The Inmportancia of the financial planning for businesses when we refer to the financial planning intuitively perhaps think of a model of financial projections that yields financial statements of results, balance and flows of resources with their respective indicators. However, that includes a whole range of activities, which are mainly developed at the strategic level both as functional business and to a lesser extent, at the operational level. The process of financial planning is one of the most important to be carried out in any type and size of business. The financial planning is a process of translation to financial terms, of the strategic and operational plans of the business to a horizon of time that is used to make both strategic and financial decisions themselves. So through this, we can appreciate the result of intended growth, the risk that this implies, of the quantities of resources or funds that are required and predicted capital costs for how, under conditions of uncertainty, you change the value of the company within the chosen strategic scenario and also in those scenarios that might be feasible, and also which variables have a relevant impact on the business value. We could summarize saying that the business strategy in the light of the three fundamental financial decisions, is displayed through the financial planning the commit resources (investments), the structure of capital (capital and/or loans required, risk), and the dividends for shareholders. To carry out this task, we need a model that sometimes is called financial planning or financial projections.

Today, it has the technology required to create models from the simplest to the most sophisticated. Financial projection, has gone in a span of 40 years, from being a job that was done manually, to be made with computational models, sometimes very sophisticated but also very practical. Planning Finance is made to a future time horizon so that it can represent the financial dimension of strategies in complete form (for that period).