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101.

Financial planning tries to link the present with the future. Explain the importance of financial planning in the light of this statement.

Answer» Financial planning tries is an important part of overall planning of any business organisation. It is the proces of determining the objectives. Policies, procedures, programmes and budgets to deal with the corporate financial activities of an enterpirse.
Discussion
102.

What does financial management aim at ?

Answer» The primary objectives of financial management are: Attempting to reduce the cost of finance. Ensuring sufficient availability of funds. Also, dealing with the planning, organizing, and controlling of financial activities like the procurement and utilization of funds.
Discussion
103.

Discuss in brief the importance of financial management .

Answer» Financial management determines the financial health of a business. It helps in raising funds at a minimum cost.
It is concerned with optimal procurement as well as usage of funds. It aims to reduce the cost of funds, keep the risks under control and achieve effective deployment of funds, financial management plays a vital role in an organisation.
Discussion
104.

Explain the twin objectives of financial planning.

Answer» (i) Ensure availability of funds whenever required.
(ii) Ensure that the firm does not raise resources unnecessarily.
Discussion
105.

Sound financial planning is essential for the success of any business enterprise. Explain the statement by giving any six reasons.

Answer» Sound financial planning is essential for the success of an busincess enterprise because of the following points.
Discussion
106.

Explain any four points that highlight the importance of financial planning.

Answer» Financial planning tries is an important part of overall planning of any business organisation. It is the proces of determining the objectives. Policies, procedures, programmes and budgets to deal with the corporate financial activities of an enterpirse.
Discussion
107.

what is meant by financial management ? State the primary objective of financial management .

Answer» a) Financial Management includes decisions relating to the procurement of funds, investment of funds in long term and short term assets and distribution of earning to the owner.
b) It is concerned with the management of the flow of funds and involves decisions relating to procurement and investment of funds, in the long term and short term assets and distribution of earning to the owner.
c) It helps in the determination of the total funds required.
Financial decisions taken by a financial manager are :
a) Investment decisions
b) Financing decisions
c) Dividend policy decisions
Discussion
108.

Difine financial planning .

Answer» It is the prices of estimating the financial requirements of an organisation specifying the sources of funds and ensuring that enough funds are available at the right time.
Discussion
109.

What is the primary objective of financial managerment ?

Answer» The primary objectives of financial management are: Attempting to reduce the cost of finance. Ensuring sufficient availability of funds. Also, dealing with the planning, organizing, and controlling of financial activities like the procurement and utilization of funds.
Discussion
110.

Given the meaning of investment and finacning decision of financial management .

Answer» Investment decisions and financing decisions:
Investment decisions : A long-term investment decision is called capital budgeting decision. It involves committing the finance on a long-term basis. For example, making investment in a new machine to replace an existing one or acquiring a new fixed asset or opening a new branch. Capital budgeting decisions are very crucial, as they affect the earning capacity of the business in the long-run. Since, these decisions involve huge amount of investment and are irreversible, they need to be taken with utmost care.
Financing decisions: This decision relates to the relative proportion of various sources of finance. It involves identification of various available sources. The main sources of funds for a business are shareholders’ funds and borrowed funds.A business has to decide the proportion of funds to be raised from sources, which serves the purpose most effectively. Thus, we can say that financing decision is concerned with how much finance is to be raised from which source.This decision determines the overall cost of capital and the financial risk of the enterprise, which depends upon the proportion of debt in the total capital.
Discussion
111.

What is the primary aim of financial management ?

Answer» To maximize shareholder’s wealth is the primary aim of financial management.
Discussion
112.

How does financial planning make the evaluation of actual performanc easier ?

Answer» Financial planning involves planning about future and manager would have prepared a blueprint of future works which should have been completed.Hence the actual performance can be compared with the planned performance easily.
Discussion
113.

Financial management aims at __________ (a) ensuring availibility of enough funds (b) reducing the cost of funds procured (c) effective deployment fo fun (d) All of these

Answer» Financial management is a managerial activity that deals with planning and controling of firms financial resources. Financial management deals with procurement of fund and effective utilisation of fund in business. The two basic aspect of financial management are procurement of fund and effective utilisation of fund to acheive business objectives.In procurement of fund managers are consented to minimise the cost and while utilising they are consented to maximise returns.
Therefore option (d)
Discussion