Strategic Planning And Financial Planning
Financial planning is the management of finances over time which aims at meeting the needs of the business while strategic planning is the process of determining which direction the company is going to take, the goals for business and how to achieve the goals. Strategic and financial planning involves defining the objectives, gathering and analyzing data, implementation of the plan and then monitoring the results (Keown, A. J. et al 2011).
When developing a business strategic plan, the money that is available is the one which determines what options to be entertained. The liquidity of a company determines how quickly it can be able to convert the assets that it has to cash in order to pay off debts. The current ratios help in assessing the ability of the company to paying its bills on time through comparing the current assets and the current liabilities (Keown, A. J. et al 2011).
The aim of strategic planning is to provide a road map for the progression of the business. A good strategic plan helps in eliminating areas of inefficiency and this increases the revenues decreasing the costs. In the case of Starbucks Corporation, the company has been able to develop a good strategic plan which has helped it in increasing the revenues from $10.7 billions to $11.7 billions. The careful financial planning of its money has contributed greatly to the continuous growth all over the world and it has increased its financial success. When the revenue increases, this means that more money is available for the business to use and this means that the company has a larger budget for the next budget period. Poor strategic and financial planning pose a great risk too the company as it can lead to closure of the business.
Reference
Titman, S., Martin, J. D., & Keown, A. J. (2011). Financial Management: Principles and Applications Pearson/Prentice Hall.
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