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Chapter 18
Financial Planning
Term | Definition |
---|---|
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 |