Explain any four factors which affect the formulation of a financ… - Vidyadip

Question

Explain any four factors which affect the formulation of a financial plan.

✓

Answer

Four Factors affecting the formulation of financial Plan are:

1.	Objective	-	i.e objectives and standards should be clearly expressed as far as possible in quantitative terms.
2.	Solvency & liquidity	-	Funds should be invested in projects likely to give regular return and adequate cash should also be available.
3.	Optimum Structure	-	Capital Structure should be balanced and optimum.
4.	Simplicity	-	Financial plan should be simple economical, appropriate and flexible.
5.	Provision for contingencies	-	Proper provision should be made for contingencies.

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