Growth and Financial Planning

Set of flashcards covering key concepts and vocabulary from Corporate Financial Planning and Sustainable Growth.

Corporate Financial Planning

Analyzes financing and investment choices of a firm, projects future consequences of current decisions, and measures performance against financial goals.

Pro Forma Financial Statements

Project financial statements including income statement, balance sheet, and statement of cash flows, integrating growth goals and necessary investments.

Operating Cycle

The time it takes to receive inventory, sell it, and collect on receivables generated from sales.

Cash Cycle

The time between payment for inventory and receipt from the sale of that inventory.

Sustainable Growth (G*)

The growth rate in sales that can be attained without changing financial policies, like keeping the same dividend payout or not issuing new shares.

Debt Policy

The target mix of liabilities and equity a firm aims to maintain.

Dividend Policy

The target ratio of dividends paid relative to profits.

Profit Margin (p)

The ratio of after-tax profit to sales.

Asset Intensity (t)

The ratio of ending assets to sales.

Financial Strategy Matrix

A framework used to determine how to utilize cash surplus for growth or distribution, depending on financial conditions.

Capital Investments

Investments that are large and infrequent, often made in advance of sales increases and necessary for supporting growth.