State two objectives of financial planning.

Objectives of Financial Planning:

(i) To ensure availability of adequate funds at the right time: This includes a proper estimation of funds required for different purposes such as for the purchase of long-term assets or to meet day-today expenses of business. It estimates the time at which the funds are to be made available. Based on these facts, funds could be raised from short-term and long-term sources.

(ii) To see that the firm does not raise resources unnecessarily: Excess funding is almost as bad as inadequate funding. So, the financial manager must see to it that the company does not raise more capital than the requirement of the business. In case, there is surplus cash or liquidity, the excess funds should be utilised judiciously.

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