Lesson 5

• Steps in the Financial Planning Process


  1. Financial Planning Process

  2. Establishing Financial Goals

  3. Gathering Financial Status

  4. Analyzing and Evaluating Financial Status

  5. Developing a Financial Plan

  6. Implementing the Plan

  7. Monitoring and Reviewing Progress

  8. Adjusting the Plan
• Budget Preparation


  Financial preparation that outlines expected income and expenses over a specific period
• Budget Preparation 


  Serves as a roadmap for managing finances and achieving financial goals
• Budgeted Income


  Expected or projected revenue or income for a specific period. It represents the anticipated inflow of funds into an organization based on various sources such as sales, investments, rental, royalties, or any other income-generating activities.
• Budgeted Expenses


  The anticipated or projected costs that an organization expects to incur during a specific period, as outlined in a budget. These expenses represent the planned outflow of funds from the organization and include various items such as operating expenses, salaries, utilities, rent, taxes, marketing tools, and other expenditures necessary for the business operations.
• Budget Formula


  Budgeted Income = Projected Sales + Other Income
• Budgeted Expenses Formula


  Budgeted Expenses = Cost of Goods Sold +

  Operating Expenses + Non-operating Expenses