financial planning system


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financial planning system

[fī¦nan·chəl ′plan·iŋ ‚sis·təm]
(computer science)
A decision-support system that allows the financial planner or manager to examine and evaluate many alternatives before making final decisions, and which employs the use of a model, usually a matrix of data elements which is constructed as a series of equations.
McGraw-Hill Dictionary of Scientific & Technical Terms, 6E, Copyright © 2003 by The McGraw-Hill Companies, Inc.

financial planning system

Software that helps the user evaluate alternatives. It allows for the creation of a data model, which is a series of data elements in equation form; for example, gross profit = gross sales - cost of goods sold. Different values can be plugged into the elements, and the impact of various options can be assessed (what if?).

A financial planning system is a step above a spreadsheet by providing additional analysis tools; however, increasingly, these capabilities are being built into spreadsheets. For example, sensitivity analysis assigns a range of values to a data element, which causes that data to be highlighted if it ever exceeds that range.

Goal seeking provides automatic calculation. For example, by entering gross margin = 50% as well as the minimums and maximums of the various inputs, the program will calculate an optimum mix of inputs to achieve the goal (output).
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References in periodicals archive ?
An example is the Interactive Financial Planning System, introduced in 1975 and updated annually.
The aim of her project was to create a financial planning system that suited the needs of Light House which was both capable of supporting funding and presenting concise ongoing information to the board.
* Interactive Financial Planning System (IFPS) is a multipurpose, interactive financial modeling system, often called a Decision Support System (DSS), which supports and facilitates the building, solving, and asking "what-if" questions of financial models.

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