Quiz: The Ultimate Strategic and Financial Planning Quiz: HowStuffWorks
The Ultimate Strategic and Financial Planning Quiz
4 Min Quiz
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About This Quiz
Organizations of all types use the twin tools of strategic and financial planning to effectively reach their goals. They differ from each other in some very specific ways, but when integrated with each other they can lead to a truly successful organization.
What is the relationship between strategic planning and financial planning?
Strategic planning focuses on what the organization's identity is, and thus what they would like to achieve in the future. Since there are costs associated with reaching a goal, a financial plan helps the organization effectively reach that goal.
What is an example of a strategic planning decision?
Strategic planning decisions deal with the big picture and financial planning decisions are more about the nuts and bolts.
What is a piece of information that would affect financial planning?
Financial planning deals with money issues alone. It focuses on the uses and value of measurable and limited resources, such as cash and manpower.
What are the two parts of a strategic plan?
The mission statement spells out an organization's current purpose, and the vision statement extends the mission into the future.
What criterion is part of the SMART objectives system?
SMART stands for specific, measurable, achievable, relevant and time-bound. The idea is that by making sure its mission statement meets these criteria, a company can create a statement that is useful and meaningful.
If a mission statement defines the "what" of an organization (i.e. what it does), what does the vision statement define?
A vision statement states the shared goal of the stakeholders in the organization. Thus, it explains "why" they do what they do.
What are the building blocks of a financial plan?
Before a company can figure out how to reach its future goals, it needs to predict what will happen to the company's finances, and in the economy in general.
What might a company try to determine during a financial projection?
Financial projections try to accurately predict changes in factors that will affect the expenses, income and profits of the company in the long term.
What is an example of something that could reduce a company's profit margins?
Profit margin refers to the percent of any given products sale price that is profit for the company. If the company's production costs rise, its profit margin decreases.
Which of the following is the least idealistic?
As parts of the strategic plan, the mission and vision statements are typically idealized portrayals of future goals. By definition a financial plan has to be more realistic, evaluating the actual chances of the company achieving its idealized goals.
What will help ensure that a financial plan is most effective?
Financial plans don't work in a vacuum. They need to be partnered with a strategic plan early on so that the two can play off of each other and work together.
How can a human resources department use a strategic plan?
If the strategic plan defines a company's goals, then a person who is passionate about that goal might be an excellent employee for the company.
What is a major challenge of financial planning?
Financial plans work towards achieving long-term goals, but they must also remain flexible enough to be able to respond quickly to immediate financial needs.
What amount of time can a company's financial projections typically predict with a high degree of accuracy?
Because the effects of the current data can virtually be spelled out for the medium term of three to five years, many companies prefer to focus on that span instead of the longer term in their financial predictions.
What is the one extra factor that both strategic and financial plans should allow for if they wan the company to succeed?
While a solid plan can fuse the creative and practical aspects of human nature, a willingness to alter the plan in light of new ideas is essential if a company wants to stay ahead of its competition.
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