Jove
Visualize
Contact Us
JoVE
x logofacebook logolinkedin logoyoutube logo
ABOUT JoVE
OverviewLeadershipBlogJoVE Help Center
AUTHORS
Publishing ProcessEditorial BoardScope & PoliciesPeer ReviewFAQSubmit
LIBRARIANS
TestimonialsSubscriptionsAccessResourcesLibrary Advisory BoardFAQ
RESEARCH
JoVE JournalMethods CollectionsJoVE Encyclopedia of ExperimentsArchive
EDUCATION
JoVE CoreJoVE BusinessJoVE Science EducationJoVE Lab ManualFaculty Resource CenterFaculty Site
Terms & Conditions of Use
Privacy Policy
Policies

Related Experiment Videos

How to design a financial planning model.

R L Hayen

    Long Range Planning
    |September 8, 1983
    PubMed
    Summary
    This summary is machine-generated.

    Corporate financial planning models use integrated statements for

    Related Concept Videos

    You might also read

    Related Articles

    Articles linked to this work by shared authors, journal, and citation graph.

    Sort by
    Same journal

    Humanizing strategy.

    Long range planning·2022
    Same journal

    Does Exposure to a Traumatic Event Make Organizations Resilient?

    Long range planning·2020
    Same journal

    Dynamic capabilities and high-tech entrepreneurial ventures' performance in the aftermath of an environmental jolt.

    Long range planning·2020
    Same journal

    On Components, Latent Variables, PLS and Simple Methods: Reactions to Rigdon's Rethinking of PLS.

    Long range planning·2014
    Same journal

    Environmental scanning for Social Services.

    Long range planning·1992
    Same journal

    Strategic group decision support systems--a guide for the unwary.

    Long range planning·1992

    Area of Science:

    • Corporate Finance
    • Accounting Information Systems

    Background:

    • Corporate planning models integrate income statements, balance sheets, and cash flow statements.
    • Computer-based systems enable 'what if?' scenario analysis for managers.
    • Two primary logical structures exist for integrated financial statement models.

    Purpose of the Study:

    • To discuss the logic of integrated financial planning models.
    • To compare the 'funds needed to balance' and 'direct' approaches for model construction.
    • To aid corporate planners in selecting appropriate model logic.

    Main Methods:

    • Description and contrast of two distinct approaches to financial model logic: 'funds needed to balance' and 'direct' approach.
    • Analysis of model validation strengths inherent in each approach.

    Related Experiment Videos

  • Discussion of implementation using computer-based planning systems.

    • Main Results:

    • The 'funds needed to balance' approach equates total assets with total liabilities plus equities, which can complicate validation.
    • The 'direct' approach calculates total assets independently, offering a robust method for model validation before 'what if' analyses.
    • The direct approach provides a stronger validation mechanism.

    Conclusions:

    • The choice of logic structure significantly impacts the ease of validation for corporate financial planning models.
    • The 'direct' approach is recommended for its superior validation capabilities.
    • Effective model construction is crucial for reliable 'what if' scenario planning.