Financial Plans Are Extremely Important - Essay Example

The human capital of the firm is one of its most valuable assets. Planning requires cooperation from the different departments in a corporation.  A key budget that can guide a company is the master budget. A master budget is a set of interrelated budgets that constitutes a plan of action for a specific period (Weygandt, Kieso, Kimmel, 2002).

            The statement of cash flow is a key report that provides insight into the cash activities of the firm during an accounting period. The three categories of this statement are operating, investing, and financing activities. Cash is the most liquid and important asset a company has. A lack of cash can put a company out of operation because without cash a company cannot pay its current liabilities. ''Cash flow is of vital importance to the health of a business'' (Businesscasestudies, 2015). Investment planning is important because choosing the right investments and projects allows corporations the ability to maximize shareholder wealth.