Chapter 21: Financial Planning and Strategy

The following sections are included:

• Introduction

• Procedures for Financial Planning and Analysis

• The Algebraic Simultaneous Equations Approach to Financial Planning and Analysis

• Sensitivity Analysis

• The Linear Programming Approach to Financial Planning and Analysis

  • Profit maximization

  • Linear programming and capital rationing

  • Linear programming approach to financial planning

• The Econometric Approach to Financial Planning and Analysis

  • A dynamic adjustment of the capital budgeting model

  • Simplified Spies model

• Summary

• Appendix 21A — The Simplex Algorithm for Capital Rationing

• Appendix 21B — Description of Parameter Inputs Used to Forecast Johnson & Johnson’s Financial Statements and Share Price

• Appendix 21C — Procedure of Using Excel to Implement the FINPLAN Program

• Appendix 21D — Outline for a Project