Critical Analysis Of Financial Planning

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INTRODUCTION

Financial planning enables businesses to use financial information both internal and external and other important market information to help determine the business strategy. It looks at the framing of financial policies that relate to investment, procurement, investment and management of funds of an organisation.
(Brealey, Myer, & Marcus, 2000), define financial planning as a process assessing the financing and investment options available to a business entity and likely significance of this. It is an important process of an organisations performance management. It provides internal guidance in planning, and monitoring operations using income-statement and other value drivers; it provides key stakeholders with critical information
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It will assess the challenges the company faces in its budget and budgetary control practices. Budgeting compels an organisation to look to the future

It is important for an organisation to have a financial strategy that helps it achieve its strategic objectives, maintain profitability while sustaining competitive advantage.

This paper will analyse the theories and literature, peer reviewed journals on budgets and budgetary techniques. It will also assess and determine where the budgets are aligned with the company’s strategic priorities. It will outline the budgeting methodologies adopted by Zimpapers and the limitations or advantages and how these have worked for the organisation and their alignment to the vision and mission. This will be followed by a critical evaluation of literature and related theories on budgets and budgetary techniques.

The author used company documents and interviews from the company’s finance department to determine the budgetary practices at Zimpapers .Zimpapers, using incremental budgeting for its budget
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It comprises forecasting revenue levels and expenses, the organisations profit capital expenditure, cash flows, and gives management a framework for control. A budget therefore has multiple purposes. It is a financial management tool that ensures prudent allocation of an organisation’s financial resources. Budgets help organisations keep track of the progress the organisation is making towards attainment of its strategic goals and objectives. It assists the organisation forecast profits and future cash flows and can be used as its road

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