Financial Plan For An Organization

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Financial Plan Jeana Barnes Professor Sandberg HCS 589 July 6, 2015 Financial Plan According to Grable, J. E., et al. (2008), both the financial plan and the projected budgets help an organization to be successful both in the present and in the future operations. Even though the two aspects go hand-in-hand, they are different in how they influence organizational financial success. The main differences include the fact that the budgets helps one map out the key expenses that will be incurred in weeks or months to come. While financial plan helps on to plan for funding financial objectives and goals in 5 years and over. Creating a financial plan means make a long-term strategy for achieving goals while…show more content…
It also includes the tax liability of the company to the tax authority. Finally, another important financial detail is revenues that are collected from business operations. These revenues are in form of sales returns and also profits that can be worked back to the business and others are paid to the employees and shareholders in common and preferred stocks. The assumptions use in the projected budget In developing a projected budget, there are various assumptions that hold in an order to develop a successful projected budget that will enable the organization to manage it expenses and income in a fiscal year or within any other given period of time. It is assumed that the increase in revenue, salaries and supply expenses per year are 20%, 10% and 5 % respectively. It’s also assumed that travel, maintenance, contracts, marketing, miscellaneous and salaries as a percentage of revenue are 1, 1, 4, 0.5, 2 and 75% respectively. Other assumptions that will be important in making a projected budget include the following: 1. The real gross domestic product (GDP) growth rate for the projected period is 1.6% to 3.6% for 2015 and the trend rate for 2016 to 2018 is 4.5%. 2. The investment return is estimated to be 4.5% in 2015 and will be in the range of 3.7% to 6.2% per year thereafter. 3. The Land premium is estimated to be 2.5% of
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