Financial Future

Financial planning is directly linked with the planning of business activities of the company. Virtually all financial indicators are based on the output and range of products (goods, works and services), cost of the production.
Financial planning helps to identify the internal resources of the enterprise, to respect the saving mode. Firstly, the obtaining of a planned profit margins and other financial indicators can only be achieved in case of implementation of all the planning regulations of the labor and material resources; secondly, the amount of the financial resources, calculated on the basis of financial plans, eliminates the excessive levels of material resources, unproductive payments, unplanned financial investments, etc.; and thirdly, it creates the necessary conditions for the effective use of production capacity, improvement of the product quality.
Financial planning is the process of developing of a system of measures to ensure the development of the company with the necessary financial resources and improvement of financial performance in the coming period.
Financial planning on the company covers the three main kinds: 1) operational planning of financial activities, 2) the current planning of financial activity, and 3) the prediction of financial performance. Each of these types of financial planning has some forms of presentation of its results.
The starting point for the financial planning are the accounting records or other financial statements, the study of which helps to restore all the key aspects of commercial activities and transactions in a generalized form, i.e. with the requisite degree of the aggregation of an analyst. The practice has developed the basic techniques of financial planning, among which are the following:
• horizontal financial planning;
• vertical financial planning;
• trending financial planning;
• comparative financial planning;
• factorial financial planning;

The objective of the horizontal financial planning is to compare the performance of accounting with the previous period. Special attention should be paid to the cases where a change of one of the indicators of economic nature does not correspond to the changes of another indicator.
The vertical financial planning is carried out to determine the proportion of individual balance sheet items in the overall totals and subsequent comparison of results with those of the previous period.
Trend financial planning is based on the calculation of the relative deviations of parameters accounting for the number of periods (quarters, years) from the level of the base period. With the help of the trend the possible values of indicators in the future are formed, i.e., the forecast of financial planning is made.
The comparative financial planning is based on a comparison of selected financial indicators and the indicators of the competitors.
Factorial financial planning is the process of studying the influence of individual factors (reasons) to the effective rate by deterministic or stochastic methods of investigation.

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