To avoid the problem of shortage and surplus of funds what is required

1.	To avoid the problem of shortage and surplus of funds what is required in financial management? Name the concept and explain its any three points of importance.
Answer» It is financial planning. Importance: Main points of the importance of financial planning are as under: i. Helps to Face the Eventualities: It tries to forecast various business situations. On this basis, alternative financial plans are prepared. By doing so, it helps to face the eventual situations in a better way. ii. Helps in Avoiding Business Shocks and Surprises: Proper provision regarding shortage or surplus of funds is made by anticipating future receipts and payments. Hence, it helps in avoiding business shocks and surprises. iii. Helps in Coordination: It helps in coordinating various business activities, such as, sales, purchase, production, finance, etc.

To avoid the problem of shortage and surplus of funds what is required in financial management? Name the concept and explain its any three points of importance.

Answer»

It is financial planning.

Importance: Main points of the importance of financial planning are as under:

i. Helps to Face the Eventualities: It tries to forecast various business situations. On this basis, alternative financial plans are prepared. By doing so, it helps to face the eventual situations in a better way.

ii. Helps in Avoiding Business Shocks and Surprises: Proper provision regarding shortage or surplus of funds is made by anticipating future receipts and payments. Hence, it helps in avoiding business shocks and surprises.

iii. Helps in Coordination: It helps in coordinating various business activities, such as, sales, purchase, production, finance, etc.

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