FINANCIAL POLICY

Criteria describing a corporation's choices

regarding its debt/equity mix, currencies of
denomination, maturity structure, method
of financing investment projects, and
hedging decisions with a goal of maximizing
the value of the firm to some set of
stockholders.

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 FINANCIAL POLICY Cont`D
Financial policies refers to policies related
to the regulation, supervision, and
oversight of the financial and payment
systems, including markets and
institutions, with the view to promoting
financial stability, market efficiency, and
client-asset and consumer protection.

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 STRATEGY PLANNING
It is an organization's process of defining its strategy, or direction, and
making decisions on allocating its resources to pursue this strategy,
including its capital and people. Various business analysis techniques
can 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), and
EPISTEL (Environment, Political, Informatic, Social, Technological,
Economic and Legal).
Strategic planning is the formal consideration of an organization's future
course. All strategic planning deals with at least one of three key
questions:
"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 Of Strategic And
Financial Planning
The 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
Process
Measure 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
requirements
Integrate the financial process with the
strategic planning process

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 Integrating strategic and financial
planning processes
1 Analytic Phase
Market Analysis
The market analysis provides an understanding of an
organization's financial strengths and weaknesses by
providing local and national data for comparison. It
helps the organization predict market changes that
will impact its strategic goals.
Service area
Regulatory 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 Opportunities
Test Viability: An interactive process that
examines whether selected opportunities support
the organization's mission and will provide the
projected financial, quality or operational returns.
It also examines whether the organization has the
capital to finance the opportunity.

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 3 Implementation Phase
Operational 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 Phase
Ongoing Adjustments To Plan evaluation
Results must be monitored continuously to ensure success. Key
assumptions should be periodically reviewed to make sure they are
on target. New threats and opportunities may also become
apparent. The plan needs to be flexible to adapt to new
opportunities.
Management Dashboard
Managers monitor the success of projects in real-time by reviewing
key statistics for each project, as well as overall organizational
performance. Ongoing results for each project are provided to
accountable staff. Overall results are provided to top-line managers,
senior staff and CEO, as appropriate.
 Operational measures
 Quality indicators
 Financial ratios

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 Role of strategic and financial
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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 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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