Financial Planning

Financial Planning...

Financial planning is deciding in advance how much capital should be required to run business and attaining goals.financial planning is the process of estimating the capital required and from where we get capital amount.

         in Financial Planning, we deciding in advance how much total fund is required in future for run business in financial planning these points are taken considered in advance.

               

Financial Planning

🖋️ Determine Capital requirement-In financial planning first we determine how much capital is required in business it is depend upon level of business if our business is high level so we required large amount of capital otherwise we required small amount of capital.

🖋️determine capital structure after determine how much capital required in future we have to determine the capital structure it means what is the composition of the capital structure in the business it means we make a plan of debt and equity means how much amount of own capital we invest and how much amount of debt we should taken in future.

🖋️determine financial policies after making capital structure we have to make financial policies regarding sales borrowings and lending and how much salary we have to pay to employees how much bonus should be paid these all  policies considered in financial planning.

         Thus financial planning is a process of making objective ,policies, procedures,programme and budget of financial activities to attain business goal efficiently and effectively.

    Importance of financial planning..

✏️ Availability of adequate funds-financial planning helps in availability of adequate funds at the time of requirement because in financial planning we  decided in advance how much capital should be required in future.

✏️ Reduce uncertainty-financial planning reduce uncertainty because in financial planning we already plan what will be market changes and what's the market trend in future so we can face easily through our funds.

✏️financial planning helps in making growth and expansion program which helps in growth of Business and stand in competition because we already make arrangements of funds for growth of business.

✏️ Financial planning helps in managing inflation because we already make a plan of market situation what will be the market situation in future that's why we already manage inflation.

✏️ Financial planning helps in maximum utilisation of financial resources.

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