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What are the objectives of financial planning?
In aany Company eithe it's SME/MNE, all working depends upon the financial planning, without this planning they can not move forward with positive vision. Thanks
Financial planning is done to achieve the following two objectives
1. To ensure availability of funds whenever these are required
2. To see that firm does not raise resources unnecessarily
Financial Planning has got many objectives to look forward to:
1-Determining capital requirements- This will depend upon factors like cost of current and fixed assets, promotional expenses and long- range planning. Capital requirements have to be looked with both aspects: short- term and long- term requirements.
2-Determining capital structure- The capital structure is the composition of capital, i.e., the relative kind and proportion of capital required in the business. This includes decisions of debt- equity ratio- both short-term and long- term.
3-Framing financial policies with regards to cash control, lending, borrowings, etc.
4-A finance manager ensures that the scarce financial resources are maximally utilized in the best possible manner at least cost in order to get maximum returns on investment.