fin essay sample
Student name:Institution:Course:Instructor:How to develop a management strategy and planThe successful management of any company is based on the ability of the company directors to develop overall beneficial strategy and engaging in informed current and future detailed planning. Also, adequate response to changes within and external to the company is reliant on the availability of capable managers who continuously review the company’s policies and modify them to accommodate the changes in the industry. Planning activities should also reflect these changes to produce viable results. Effective management involves analyzing different decisions controlled by the manager and assessing their impact on the company’s position and performance. The manager also needs to identify the required resources in the planning and implementation of the strategy as these resources determine to a large extent the kind of decisions that manager makes. This paper identifies the major steps involved in the formation of a strategy for managing all the different decisions under the control of a manager, and lists the cash flows involved in FinGame and their timings.To begin with, the manager needs to obtain budgeted or pro forma statements. The most recent financial statements provide information regarding the firm’s current liquidity, its performance, and position. These statements form a starting point for the financial planning and control processes as they form a strong basis for making future decisions. Pro forma statements are instrumental in determining both known and estimated outcomes of the firm under a given set of decisions and environmental conditions. A detailed comparison of pro forma statements over various strategies is likely to result to the rejection of many strategies, enabling the manager to narrow down to a few specific strategies (Brooks, 23). The manager can then select the most appropriate strategies for the few options, increasing the chances of maximizing common stakeholders’ wealth. Maximizing stakeholders’ wealth is the main responsibility of the manager; hence, it is important to plan and select the strategies that are in line with this responsibility (Brooks, 23).Obtaining pro-form or projected statements reveals the estimated effects of various variables on the future performance and position of the company, both manager-controlled and those that are not. Usually, pro forma statements show previous strategies that resulted in unforeseen problems, prompting the manager to review a prior set of decisions. As such, these statements are usually important in the planning phase as they prevent the manager from making irreversible and often expensive commitments. After the quarter, the manager should compare the previous pro forma statements with the actual statements for control purposes. In the case of any discrepancies, the manager should measure them and implement appropriate changes in both forecasting and decision-making techniques (Brooks, 23). Such changes are beneficial in that they improve the company’s pro forma accuracy statement accuracy, and facilitate better planning of future company performance.Other important decisions to consider include the management of cash and liquidity, cost of capital, dividend policy, discounts on deliverables, production strategy, and the pricing strategy. All these factors contribute to the maximization of common …
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