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FINANCIAL POLICY

Criteria describing a corporation's choicesregarding its debt/equity mix, currencies ofdenomination, maturity structure, methodof financing investment projects, andhedging decisions with a goal of maximizingthe value of the firm to some set ofstockholders.

8/12/2010 1Rajinder Kaur, MIMIT Malout

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FINANCIAL POLICY Cont`D

Financial policies refers to policies related

to the regulation, supervision, and

oversight of the financial and paymentsystems, including markets and

institutions, with the view to promoting

financial stability, market efficiency, andclient-asset and consumer protection.

8/12/2010 Rajinder Kaur, MIMIT Malout 2

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STRATEGY PLANNING

It is an organization's process of defining its strategy, or direction, andmaking decisions on allocating its resources to pursue this strategy,including its capital and people. Various business analysis techniquescan be used in strategic planning, including SWOT analysis (Strengths,Weaknesses, Opportunities, and Threats ), PEST analysis (Political,Economic, Social, and Technological), STEER analysis (Socio-cultural,Technological, Economic, Ecological, and Regulatory factors), andEPISTEL (Environment, Political, Informatic, Social, Technological,Economic and Legal).

Strategic planning is the formal consideration of an organization's futurecourse. All strategic planning deals with at least one of three keyquestions:

"What do we do?"

"For whom do we do it?"

"How do we excel?"


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Components of Financial Strategy

Raising the funds needed by an organization in an

most appropriate manner

Managing the employment of those funds in the

organization

Source:- Corporate Financial Strategy- Google Books Result

Ruth Bender, Keith Ward

2008 - Business & Economics - 395 pages


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Objectives OfStrategic And

Financial PlanningThe goals of the Strategic Planning Process:--

Develop and implement a strategic plan that supports the

organization's mission, vision and values

Create organizational and business unit plans

Identify and evaluate new business opportunities

Provide training and education related to planning

Perform market assessments and forecasts

Reconcile the plan with capital and operational budgets,

as well as with human resource and facility planning

Monitor plan implementation and measure results


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The goals of the Financial Planning

ProcessMeasure current performance

Compare the organization's position

against past organizational data and local,

regional and national benchmarks

Make financial projections

Outline the organization's financial

requirementsIntegrate the financial process with the

strategic planning process


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Integrating strategic and financial

planning processes1 Analytic Phase

Market Analysis

The market analysis provides an understanding of anorganization's financial strengths and weaknesses byproviding local and national data for comparison. Ithelps the organization predict market changes thatwill impact its strategic goals.

Service areaRegulatory changes

Payer mix

Financial markets


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1 Analytic Phase cont`d

Internal Analysis

Operational Assumptions

Financial Assumptions


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2 Plan Development Phase

Identify Opportunities

Financial Projections

Mission, Vision, Values

Prioritize OpportunitiesTest Viability: An interactive process thatexamines whether selected opportunities supportthe organization's mission and will provide the

projected financial, quality or operational returns.It also examines whether the organization has thecapital to finance the opportunity.


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3 Implementation PhaseOperational Plan

This includes staffing, facility planning, process changes, technology

planning and other nonfinancial activities necessary to implement the

plan.

Financial Plans

Financial and capital plans identify both sources and uses of funds. This

includes directions for capital allocation and spending, as well as the

development of a time frame based on the needs of the operational plan.

Implement The Consolidated Plan

The implementation process for strategic initiatives must be outlined to

ensure follow-through. Key players must be aware of their roles and

responsibilities. Executives must assign accountability so plans are

carried out effectively and set measurable goals to determine progress.


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3 Implementation PhaseOngoing Adjustments To Plan evaluation

Results must be monitored continuously to ensure success. Keyassumptions should be periodically reviewed to make sure they areon target. New threats and opportunities may also becomeapparent. The plan needs to be flexible to adapt to newopportunities.

Management Dashboard

Managers monitor the success of projects in real-time by reviewingkey statistics for each project, as well as overall organizationalperformance. Ongoing results for each project are provided toaccountable staff. Overall results are provided to top-line managers,

senior staff and CEO, as appropriate. Operational measuresQuality indicators

Financial ratios


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Role ofstrategic and financial

planning processDevelop and implement a strategic plan that supports

the organization's mission, vision and values

Create organizational and business unit plans

Identify and evaluate new business opportunities

Provide training and education related to planning

Perform market assessments and forecasts

Reconcile the plan with capital and operational

budgets, as well as with human resource and facilityplanning

Monitor plan implementation and measure results


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Functions of SFM

Continual search for investment opportunities

selection of most profitable opportunities

Determination of the optimal mix of internal

and external funds required to finance these

opportunities

Establishment of system of financial controls

governing acquisition & disposition of funds analysis of financial results as a guide to future

decision making


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