Capital Financing
Financial planning and working capital management are two processes that enable capital financing in business. Financial planning uses projections and calculations to determine investment requirements where working capital management enables flexibility in business cash flow that meets the needs of the business. Marketable securities are good sources to park cash and enable that cash to raise capital to meet future business needs. It is important to consider appropriate diversity mixes in portfolios to reduce risk and raise profitability with investments.
Financial planning involves forecasting expenses, sales, and profits (Petty, 2013). Forecasting is a guessing game, but can be closer to appropriate figures when based on historical figures that show growth trends. It can also be based on market conditions for new businesses. The next step is to calculate the costs of goods sold, interest expense, and taxes on the forecasted figures. This will show a forecasted profit. A break even analysis would then need to be made to determine the amount of inventory needed to break even. The specific needs of the venture will determine is initial requirements.
Working capital management is simply managing cash to inventory to accounts receivable and back to cash. The size of an appropriate cash reservoir is determined by the volume of sales and regularity of cash inflows and outflows. The cash flows of a business should contain an appropriate flexibility and show a certain amount of liquidity. The net working capital the cash difference in current...
Financial Planning in Health Care Organizations [1: Please note that all sources and facts utilized in this paper are from the customer provided reading material.] Healthcare is on everybody's mind today. From the insurance debate in Congress to our own personal worries about dental or medical insurance and how we can obtain it at a low price, healthcare is not only widely discussed in our society, but it is necessary to
The first advantage is that it is easy. The math associated with the percentage of sales method is very simple to execute. The underlying premise of this method is that most of the items on the income statement and on the balance sheet will vary with sales. In addition to direct variable costs, such as cost of goods sold, indirect costs will also vary roughly in line with sales.
Goal setting works well for simple jobs -- clerks, typists, loggers, and technicians -- but not for complete jobs. Goal setting with jobs in which goals are not easily measured (e.g., teaching, nursing, engineering, accounting) has posed some problems. Goal setting encourages game playing. Setting low goals to look good later is one game played by subordinates who do not want to be caught short. Managers play the game of setting
Finally, one may sell their home to free assets for retirement finances. If one sells the home and moves to a less-expensive residence, one can invest any after-tax sales profits for future retirement needs. Another home option is the reverse mortgage. With a reverse mortgage, one receives regular, nontaxable payments from the lender instead of paying these payments. The principal and interest are repaid at a later date, either
financial planning is something that they do not take seriously until later on life. Evidence of this can be seen with a survey conducted by Lawyers.com. They found that only 35% of Americans have a will and 21% have a trust established. This is problematic, as the lack of planning can hurt the trustee's ability to reduce taxes and other liabilities for beneficiaries. (Sarji, 2011) To avoid these challenges, requires
The consideration of after tax returns is also important, because different investments offer different tax rates and these differences can be significant. Interestingly, the author here also does not touch upon diversification or indeed any other key tenets of modern portfolio theory. Risk aversion is not mentioned either, even though this is a key element in people's satisfaction with their investment performance. Another interesting and overlooked element is that
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