Financial planning

Chapter 12. Financial Planning and Forecasting Financial Statements. Chapter 13. Corporate Valuation, Value-Based Management and Corporate Governance. Overview: Performance companies focus on the links between forecasting, planning, and business strategy rather than on just cost management and cost accounting. According to John McMahan of the Hackett Group, such changes ae leading to greater forecasting accuracy, higher employee morale, and better corporate performance. The additional financing needed represents the amount of extra funding required to implement the operating plan, given the preliminary choices of capital structure and dividend payout. Corporate governance involves the manner in which shareholders’ objectives are implemented, and it is reflected in a company’s policies and actions. Agency conflicts can occur when managers pay themselves excessive salaries and obtain unreasonably large stock options at the expense of the stockholders. There are several laws to regulate the financial markets, one of which is the Sarbanes-Oxley Act. Learning Objectives: Chapter 12: Financial Planning and Forecasting Financial Statements Learning Objectives: Overview of Financial Planning Financial Planning at MicroDrive Inc. Forecasting Operations Evaluating MicroDrive’s Strategic Initiatives Projecting MicroDrive’s Financial Statements Analysis and Selection of a Strategic Plan The CFO’s Model Additional Funds Needed (AFN) Equation Forecasting When the Ratios Change Chapter 13: Corporate Valuation, Value-Based Management and Corporate Governance Learning Objectives: Understand Agency Conflicts Understand Corporate Governance The Dodd-Frank Act and “Say on Pay” The Sarbanes-Oxley Act of 2002 and Corporate Governance International Corporate Governance Employee Stock Ownership Plans (ESOPs)