MSG Team's other articles

10833 Protectionist Sentiment over Flipkart Takeover

The Wal-Mart Flipkart deal has become historic in many aspects. Firstly, this is the biggest, most valued takeover of a company in India. Also, it gives entry to Wal-Mart to enter India via the e-commerce route. Many believe that this deal will pave the way for increasing globalization by increasing the FDI limit for the […]

11972 Why Facebook must be Prevented from being used to Interfere in Elections Worldwide

How Facebook can be used to Influence and Interfere in Elections Worldwide It is a known fact that social media, while easing communications and connecting Billions of people worldwide, can also be used by political parties, unscrupulous and malevolent actors, and even businesses and corporate entities to manipulate public opinion and to influence the outcomes […]

8804 Training and Development – Meaning, its Need and Importance

Training and development is vital part of the human resource development. It is assuming ever important role in wake of the advancement of technology which has resulted in ever increasing competition, rise in customer’s expectation of quality and service and a subsequent need to lower costs. It is also become more important globally in order […]

11754 Value Analysis: An Applied Concept for Manufacturing and Service Industry

Introduction All organizations strive to create value for their customers. This value creates mind space for product and services. Value analysis, therefore, is a scientific method to increase this value. Value is a perception hence every customer will have their own perceptions on how they define value. However, overall at the highest level, value is […]

9975 International Businesses and Resistance to their Activities

Global Capital, Local Resistance The previous articles in this module discussed how international businesses expand into overseas markets both for selling their products as well as to extract the resources in mineral rich countries. We discussed how the international expansion of these businesses has to equitable and follow the rules of justice. What happens when […]

Search with tags

  • No tags available.

Definition of Financial Planning

Financial Planning is the process of estimating the capital required and determining it’s competition. It is the process of framing financial policies in relation to procurement, investment and administration of funds of an enterprise.

Objectives of Financial Planning

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.

Importance of Financial Planning

Financial Planning is process of framing objectives, policies, procedures, programmes and budgets regarding the financial activities of a concern. This ensures effective and adequate financial and investment policies. The importance can be outlined as-

  1. Adequate funds have to be ensured.

  2. Financial Planning helps in ensuring a reasonable balance between outflow and inflow of funds so that stability is maintained.

  3. Financial Planning ensures that the suppliers of funds are easily investing in companies which exercise financial planning.

  4. Financial Planning helps in making growth and expansion programmes which helps in long-run survival of the company.

  5. Financial Planning reduces uncertainties with regards to changing market trends which can be faced easily through enough funds.

  6. Financial Planning helps in reducing the uncertainties which can be a hindrance to growth of the company. This helps in ensuring stability an d profitability in concern.

Article Written by

MSG Team

An insightful writer passionate about sharing expertise, trends, and tips, dedicated to inspiring and informing readers through engaging and thoughtful content.

Leave a reply

Your email address will not be published. Required fields are marked *

Related Posts

Cultural Influences on Financial Decisions

MSG Team

Currency Wars: “Beggar Thy Neighbor” Policy

MSG Team