Financial Forecasting Paper - Essay Example

to best place it to generate profitable investment opportunities.’1 1. Establish Mission and objectives: Maximization of the Wealth is a major objective. Other objectives are - Maximization of Profit, Maximization of the return on the capital employed, Survival, Long term Stability, growth, and Satisficing, As we have established that the major objective of a strategic planning is maximizing the shareholder’s wealth, and the strategic planning works on achieving this objective, we can surmise that strategic planning is very important in maximizing shareholder’s wealth.

Appliances, Automotive and Aircraft industries are impacted by the strength of overall economy, whereas Appliances Industry also is affected by the strength of housing market. The Beverages industry is affected by changes due to seasonal demand. However a strong economy helps the beverages industry. The demand of heart valves and medical stents are affected by demographic trends and availability of health insurance. The defense purchases are largely unaffected by economic conditions, but it affects the economic growth – a bigger defense expenditure causes the market to boom.

Sales projection given varies only due to seasonal effect. If we look at % of changes we find that there is a 45.6% growth shown in the month of June and 14.7% growth in the month of December. We can assume that the changes are due to seasonal effect and might have contributed by the beverages industry. In the case of Riordan Manufacturing we only find the operating expenses Budget of Cost center IT, Cash Budget, operating budget and consolidated balance sheet, which mainly gives the projected financial statement.

We need to give the other elements as described above to complete the Master Budget. 1. Constant Sales Price: It is assumed that the company can sell any no. of units at a