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Evaluating the investing and financing options available to a firm. Planning includes attempting to make optimal decisions, projecting the consequences of these decisions for the firm in the form of a financial plan, and then comparing future performance against that plan.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
The process of determining a person's or firm's financial needs or goals for the future and the means to achieve them. Financial planning involves deciding what investments and activities would be most appropriate under both personal and broader economic circumstances. All things being equal, short-term financial planning involves less uncertainty than long-term financial planning because, generally speaking, market trends are more easily predictable in the short term. Likewise, short-term financial plans are more easily amendable in case something goes wrong as a result of the short time frame.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved