Financial Strategy, Essay Example

Financial strategy is a specific plan for an organization to successfully meet its mission, goals and objectives while still seeking to increase or maintain the current wealth and profits of the organization.  Overall, the financial strategy is created by many important administrators and executives within the organization.  It can involve financial forecasts and future estimates as well as ensuring a balance between capital and debt, investment opportunities, refinancing options, and cost control methods to avoid overspending or under spending to meet the needs of the organization.  The financial strategy seeks to incorporate the predetermined strengths and weaknesses of the company, and it is completely established within the organization by accompanying the overall strategic plan and utilization financial planning for justification of its proposals.

The financial strategy should be interwoven within the business strategy by including the variables of financial future projections and the operational goals and logistics of the company.  Essentially, the financial strategy is responsible for providing the appropriate funds and budgetary requirements for the goals of the company and the operational plans.  It is the responsibility of the, Chief Financial Officer and his or her team of directors, to appropriately analyze or audit the financial situation of the company in order to determine the financial strategy and aligning it with the business strategy.  For instance, the CFO must evaluate the financial data that is available to communicate areas of weaknesses, strengths and areas of need to alter the business plan or financial strategy accordingly.  Furthermore, the CFO can utilize financial forecasting, revenue projections, capital budget requirements and cash flow charts to determine the financial strategy for the company.  From the forecasting and direct decisions from the CFO and financial director, operational decisions are made to control costs, market the company’s efforts, provide a plan for targeted growth, and utilized programs and strategies for expansion or reduction of different areas of the organization.