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Financial plans rely upon many financial models. Models are used to make plans. A financial model can be as simple as a formula, such as this one to calculate a simple Return on Investment:
ROI = net profit / invested capital.
However, some financial models can involve complex calculations that require significant computing time. On Wall Street, brokers will use models to quantify the risks and rewards of "derivative investments" and "futures contracts." On Main Street, it's often important for a business to calculate the value of its Assets. Some assets, like cars or tractors, tend to lose value (depreciate) as they get older. So, if your business buys a $50,000 tractor, we can assume that the tractor will lose value every year until it requires replacing, say, in 5 years. To calculate this reduction in value, an accountant might use a model called "Straight Line Depreciation." Using this model, a $50,000 tractor that is expected to last 5 years would be valued at $40,000 after the first year, $30,000 after the second year, $20,000 after the third, and so on. A Financial Plan, by comparison, is a budget or a projection. To write a Financial Plan for a business of any size requires using some financial models, such as ROI or depreciation. In short, plans use models.
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a plan is how your going to do somthing and an act is doing it
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(actual - plan)/plan
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What is the difference between a plan and an elevation?
if i know did ask this question with you
