Financial Management — Business Studies STD 12 Commerce — Question
CBSE BoardEnglish MediumSTD 12 CommerceBusiness StudiesFinancial Management4 Marks
Question
Explain any four points that highlight the importance of financial planning.
✓
Answer
The objective of financial planning is to ensure that enough funds are available at right time.Importance of financial planning:
It tries to forecast what may happen in future under different business situations. By doing so, it helps the firms to face the eventual situation in a better way. In other words, it makes the firm better prepared to face the future.
It helps in avoiding business shocks and surprises and helps the company in preparing for the future.
If helps in co-ordinating various business functions e.g., sales and production functions, by providing clear policies and procedures.
Detailed plans of action prepared under financial planning reduce waste, duplication of efforts, and gaps in planning.
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