Question

1) What is generally the first step in the financial planning process? 2) A firm has...

1) What is generally the first step in the financial planning process?

2) A firm has current sales of $272,600 with total assets of $311,000. What is the full-capacity capital intensity ratio if the firm is currently operating at 68 percent capacity?

3) What is generally considered when compiling a financial plan?

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Answer #1

1. The entire financial planning process is to improve the personal finances.The first step is to establish the goals or relationship with the clients.

In this, the adviser try to put open-ended questions to get necessary information to start the plan. This information may include a range of topics like financial goals, idea about market risk,risk tolerance levels, etc.,

The purpose of establishing the goal or relationship is to form the foundation of planning itself.

2. Capital intensity ratio=Sales/Total assets=272600/311000=0.877.

This ratio is at 68 percentage capacity. If it is for 100% capacity=(100%*0.877)/68%=1.29

3. The main important must things to be included in a financial plan are retirement strategy, long-term investment plan, tax reduction strategy, estate plan and risk management

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