FINANCIAL FORECASTING AND PLANNING AS A PREREQUISITE FOR MAKING MANAGEMENT DECISIONS

Abstract

Today, the modern conditions of economic activity constantly require competent financial planning and forecasting of economic activity of the enterprise. In countries with developed market economies, the improvement of tools and methods of financial planning and forecasting is constant and quite significant. Without financial planning, it is impossible to achieve the level of enterprise management, which ensures its market success, continuous improvement of capacity and social development of the team. No other type of planning can have such a general, global significance for the company, as finance covers all parties and areas of its activities without exception. The relevance of this work is to study the construction of plans and forecasts that allow the company to forecast and take into account current and future changes in the external environment, as well as adjust the internal factors of financial and economic activities for their development and further growth. The article examines the historical aspects of the emergence of financial planning and forecasting in enterprises, and defines the essence of planning (forecasting) as a management function. The paper highlights the types and functions of financial planning and forecasting, which significantly helps to understand the meaning of these concepts. The methodological aspects of the organization of financial planning and forecasting at the enterprise in making managerial decisions were also studied and the organizational and economic stages of financial planning and forecasting were determined. It is substantiated that the financial plan development is a logical conclusion of the enterprise business planning process as a whole and makes it possible to assess the net results of its management in the planning period. It is emphasized that the results of the financial plan are necessary to generalize information concerning the sources and time of flow of funds as well as the amount of these flows, their scope, meeting the demand for funds and their availability, as well as possible financial status during and at the end of the planning period. We analyzed the economic efficiency of financial planning and forecasting of the enterprise and highlighted methods for optimizing planning and forecasting in management decisions. It is proved that the company of interest can significantly improve its index number in the coming periods. It is concluded that the stability of the enterprise is achieved by efficient and rhythmic restructuring of the enterprise due to skillful management of the production assets and sources of their formation. Through planning or forecasting the enterprise’s activity is accompanied by optimal solutions and the right company profile, which contributes, to high financial performance.