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Chapter 18

Financial Planning

TermDefinition
3 Common Reasons a firm fails 1. Undercapitalization (insufficient funds to start he business) 2. Poor control over cash flow 3. Inadequate expense control
Budget Expectations for revenue, allocates the use of specific resources throughout the firm
3 types of budget 1. Capital (property purchases, equipment) 2. Cash budget (estimates the inflows &outflows during a particular period, month or quarter) 3. Operating - what does it take to run a business
Operating Budget ties the capital and cash budget together. It's the master budget
Created by: annanav