ABSTRACT
This chapter presents the longer-term view of financial planning into which integrate the choice of debt versus equity, profit planning premises, management accounting, and financial reporting. The purpose of a longer-range financial plan is to match the further-out objectives of an enterprise with its financial staying power, and based on this, to calibrate top management policies and decisions. Good governance is based on the assurance that all of these basic elements are incorporated into the financial planning and control system. Factors such as amounts of debt, taxes, share prices, as well as the lack of reliable statistics and financial information play a major role in how fast a cash starved company goes against the wall. In practically every company overhead costs tend to escape supervision, and therefore they must be very carefully watched. Overstaffing becomes opaque when administrative costs are hidden behind profit centers.
