Construct and analyze a Financial plan based on management's strategic Term Paper

Construct and go a Financial plan establish on managements strategic draped - Term Paper ExampleThus, one purpose of strategic intent is to forecast a firms fiscal statements under around specific conditions. Since total as clans must equal the sum of total liabilities and owners equity, any imbalance will require management action. Having forecasted the amount and timing of the imbalance, a financial manager bottom arrange for financing ( much(prenominal) as bank loans or stock offerings) or investment (such as marketable securities) long before the wish becomes critical. Strategic intent statements help general managers in overall planning (employment and inventory levels, for example) and riddle solving. As forecasts be developed, a manager can analyze the results to identify potential trouble spots and plan accordingly. Finding problems and trying out solutions on paper, months in advance, is much preferred to learning about the problem first hand in real time. Similarly, by seeing into the future with strategic intent statements, a manager can anticipate opportunities and prepare to knock them long before the window of opportunity begins to close. In addition to being a planning tool, strategic intent statements, in tandem with actual results, can be used to evaluate surgery and moderate midstream corrections. Variance analysis, a comparison of the plan with actual performance, helps a manager analyze firm performance during the budget period, gauge strengths and weaknesses, and make interim adjustments to the plan. The accuracy of strategic intent statements is limited by the validity of the assumptions used in creating them. Often a series of statements is developed by making different assumptions about sales and about the relationship between sales and the balance sheet accounts. This is called a sensitivity analysis. The resulting set of statements suggests the most likely outcomes for the firm and a range of financing needs. After building a balance sheet statement based on expect sales, a manager can then use sensitivity analyses to answer questions such as how the companys financial needs will change if sales are 10 percent below their expected level, etc. Since the hotel industry is a fairly competitive one, the hotel managers need to be excellent. With the income and financial statements at their disposal, the managers will make strategic decisions that will be founded on fact since Proforma balance sheets are created by forecasting the individual account balances at a future conflict and then aggregating them into a financial statement format. Account balances are forecasted by identifying the forces that influence them and projecting how the accounts will be influenced in the future by such forces. Sales, company policy, and restrictive debt covenants are often significant forces. An annual data has been provided which has to be focused for 36 months and monthly income statements and balance sheets and a strate gic intent provided as well. With such information at their disposal, the managers will make a firm strategic decision on their new acquisition. 2.0 ANNUAL BUDGETED INCOME control INCOME STATEMENT get along revenues $ Annual room revenues 209,523 Annual food and beverages 113668 Other revenue 328433 Total 14792023 Variable cost annual 8,531,040 Fixed cost annual 8,728,500 Total 9,582,604 Operating