1.

Zee Ltd. is a well established company engaged in the production of cosmetics. They propose to undertake an expansion programme for product diversication, such as toys and perfumes. 1. Being a business consultant, explain to them various steps involved in formulating plans relating to the financial aspects of this new project.2. Also state the importance of financial planning.

Answer»

1. Financial Planning: 

The process of estimating the fund requirement of a business and specifying the sources of funds is called financial planning. It ensures that enough funds are available at right time.

The twin objectives of financial planning are: 

  • To ensure availability of fund at the right time and its possible sources.
  • To see that rm does not raise fund unnecessarily.

2. Importance of Financial Planning

  • It ensures adequate funds from various sources.
  • It reduces the uncertainty about the availability of funds.
  • It integrates financial policies and procedures.
  • It helps the management to eliminate waste of funds and reduce cost.
  • It helps to achieve a balance between the inflow and outflow of funds and ensure liquidity.
  • It serves as the basis of financial control
  • It helps to reduce cost of financing to the minimum.
  • It helps to ensure stability and protability of business.
  • It makes the rm better prepared to face the future.


Discussion

No Comment Found

Related InterviewSolutions