Answered: What are the fundamental elements of an…

What are the fundamental elements of an adequate financial planning process. What are the fundamental elements of an inadequate financial planning process.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter14: Capital Structure Management In Practice

Section14.A: Breakeven Analysis

Problem 2QTD

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Question

What are the fundamental elements of an adequate financial planning process. What are the fundamental elements of an inadequate financial planning process.

Expert Solution

Step 1

Answer:

Financial planning is nothing but an on-going mechanism for the advancement of the course and will help you accomplish the ultimate goal smoothly.

Step 2

Elements of an adequate financial planning process:

Tax planning: Tax returns need to be assessed to maximize tax revenue and reduce expenses.
Cash flow statement: Cash flow analysis indicates the sum of cash balances and expenditures outflows. One will assess certain shortcomings.
Risk management: Insurance and insurance savings plan can better mitigate future costs and uncertainty.
Investment: Investment planning of diversified equity instruments, such as hedge funds, can yield greater gains on equities. Meeting future commitments in good time would be beneficial.
Balance sheet elements: Balance sheet should show the financial situation. Determining net worth, existing assets and total liabilities is genuinely beneficial.
Retirement planning and,
Estate planning.

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