There Are Four Key Steps in Developing a Financial Plan

question 12

True/False

There are four key steps in developing a financial plan: 1.Establishing goals;2.Considering your current financial position;3.Selecting the best options to reach your goals and 4.Revising your plan annually.

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Definitions:

Break-even Point

The financial point at which total costs equal total revenue, meaning that the business is neither making a profit nor a loss.

Cost-volume-profit Analysis

An accounting technique used to determine how changes in costs and volume affect a company's operating income and net income.

Sales Mix

The relative distribution of sales among the various products available for sale.

Fixed and Variable Costs

Costs that remain constant regardless of the level of production or business activity (fixed) and costs that vary in direct proportion to changes in activity (variable).