Financial planning

Please download to get full document.

View again

All materials on our website are shared by users. If you have any questions about copyright issues, please report us to resolve them. We are always happy to assist you.
  1. FINANCIAL PLANNING Presented by:- 1-Nikhil Sharma 2-Archit Mishra MBA FT 2ND sem (2014-2016) IBM CSJM University Kanpur 2. MEANING OF F.P.  Financial planning is an…
Related documents
  • 1. FINANCIAL PLANNING Presented by:- 1-Nikhil Sharma 2-Archit Mishra MBA FT 2ND sem (2014-2016) IBM CSJM University Kanpur
  • 2. MEANING OF F.P.  Financial planning is an important function of financial management. This function has to be performed whether the business is big or small. Similarly , a new as well as an existing business must perform this function very carefully because it is concerned with the procurement and effective utilization of funds. A carefully prepared financial plan will not only ensure the economical and sufficient procurement of funds but their proper utilization also.
  • 3. DEFINITION “Financial planning pertains to the function of finance and includes the determination of the firms’ financial objectives, financial policies and financial procedures.” -Walker and baughn
  • 4. Objectives of Financial planning  To raise the funds in a manner that the cost of capital is minimum.  To ensure simplicity in the capital structure.  To ensure sufficient liquidity of funds.  To provide adequate funds to the business. Neither the funds should be short nor in excess of the needs of the business.  To ensure flexibility in capital structure so that changes in the sources of funds may be made according to the changing conditions.
  • 5. Types of Financial planning  Short term planning  Medium term Financial planning  Long term financial planning
  • 6. Steps in financial planning  Determination of financial objectives  Formulation of financial policies  Formulation of procedures  Provision of Flexibility
  • 7. Principal of a sound Financial Planning  A financial plan should be so simple that it may be easily understood by everyone. It should have a simple capital structure capable of being manage easily.  The financial plan should prepared keeping in view the future needs of business.  An ideal financial plan should always aim at the best possible and intensive use of all available resources of finance.  Financial plan must be prepared in such a way that cost of capital is minimum.
  • 8. Conti…..  A financial plan should be sufficiently flexible. It should be possible for a company to change its financial plan with minimum cost and delay it warranted by changed circumstances.  A Financial plan should keep in view the requirement of funds for contingencies. Contingencies means the requirement of funds for unseen events.
  • 9. Factors Affecting Financial Planning  Nature Of Business  Degree of Risk  Standing of the concern  Plans for future growth  Alternative source of management  Atitude of management  Government policies and control
  • 10. Significance of financial planning  Helpful in the efficient operation of business activities.  Helpful in proper capitalization  Helpful in optimum capital structure  Helpful in proper utilization of funds  Helpful in the expansion of the business
  • 11. Limitations of Financial Planning  Financial plan is based on forecast of future conditions.  Once a financial plan is prepared, it becomes quite difficult to change it.  Assets involving huge capital might have been purchased and raw material, labor and other costs might have been incurred.  Sometimes the changes in financial plan also becomes difficult due to rigid attitude of management.
  • 12. THANK YOU
  • Related Search
    We Need Your Support
    Thank you for visiting our website and your interest in our free products and services. We are nonprofit website to share and download documents. To the running of this website, we need your help to support us.

    Thanks to everyone for your continued support.

    No, Thanks