Financial Planning

Finance in relation to the activities concerning the duty to provide the necessary funds for the organization in more favorable terms, in light of its objectives. The finance function of a company dealing with procurement of funds and its actual use in business. It covers financial planning, forecasting, cash and realizing funds, using and allocating funds and financial control. Financial planning helps define financial goals, setting goals and developing a plan to achieve them. The master-planning is not paying attention to the future, and any attempt to do so is folly. Humans can neither predict nor control the future. For this reason, management must clarify their goals and determine what action should be taken, when, by whom and at what cost to reach the more ambitious goals. Financial planning is the process of evaluating various investment and funding opportunities available for a company and selecting the best among the available options.

The planning requires a long-term estimate of profits, which in turn leads to a projection of sales and operating costs for a period of years. Consequently, the long-range financial planning is essential for a company that wants to grow. The company must establish goals and targets as part of a general plan for long-range survival and growth. Coordinated thought forms the basis of financial planning to make optimum use of funds, particularly in cash balances.

Money does not need to be invested in securities that produce income. Financial planning is used as a control device for setting standards of performance and evaluation of results. It is used to pre-test the financial feasibility of the various programs and in this sense is of fundamental importance because the action taken when it becomes difficult to portray .......