The previous two lectures involved analyzing the financial standing and past performance of a company. Now we want to peer into the future a bit. This process is called financial planning.
Financial planning is actually a byproduct of corporate strategic planning.
Strategic plans could encompass as much as five years and as little as one year. Strategic planning can be a very complex process involving SWOT analysis and other such management tools. While the overriding goal is to maximize shareholder value, such a goal is not operational. As an example, one goal or objective might be to increase market share. The action plan would then be a set of anticipated or planned steps to be taken to increase market share.