Discussion 5
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Discuss the importance of preparing financial plans and how an
entrepreneur might use financial projections and financial ratio analysis.
Post your initial response to the discussion question no later
than
Thursday at 11:59 PM EST/EDT.
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see any of your classmates' posts until you have posted your
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Respond to at least two of your classmates no later than
Sunday
at 11:59 PM EST/EDT.
Financial plans refer to a business document that is equipped with
an individual
’
s current money situation and long-term monetary
objectives and strategies that are needed in an organization to
achieve the set objectives. A financial plan is one of the crucial
documents that an entrepreneur should have as it provides them
with information on how much revenue they might be able to
make and how much they will be required to invest to make much
money. In general, financial plans will help an entrepreneur
estimate whether their proposed business will be profitable.
On the other hand, financial projections and financial ratio
analysis can be defined as the estimations of the future financial
performance of a business. As an entrepreneur, working on
organizational financial projections is categorized as one of the
most crucial things needed to be done each year. Financial ratio
analysis are used by an entrepreneur to achieve useful data and
financial trends concerning a business venture. In general,
financial ratio analysis are used by entrepreneurs to determine
the health of an organization before seeking investment or
financing. Financial projections are used by entrepreneurs in
compiling the internal and external accounting information that is
used in the day-to-day management of the organization. An
entrepreneur will project his revenues and expenses to help
achieve a more accurate view of how successful an organization
can be.
References:
Whatman, P. (2023, February 3).
9 key benefits of Business
Financial Planning.
Spendesk.
https://www.spendesk.com/blog/business-financial-
planning/
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