Lecture 4: Financial Planning Meaning, Objectives, Importance and Principles
1. Lecture 4
Financial Planning
Meaning, Objectives, Importance and Principles
Dr. Riya Singh
Assistant Professor
Kristu Jayanti College (Autonomous), Bengaluru
2. Meaning:
Financial Planning is the process of estimating the
capital required and determining it’s competition. It is the
process of framing financial policies in relation to
procurement, investment and administration of funds of an
enterprise.
3. Objectives of Financial Planning
• Adequate Funds
• Balancing of cost and Risks
• Flexibility
• Simplicity
• Long term view
• Liquidity
• Optimum use
• Economy
4. Principles of financial planning:
• Simplicity
• Based on clear cut objectives
• Less dependence on outside source
• Flexibility
• Solvency and Liquidity
• Cost
• Profitability
5. CONSIDERATION IN FORMULATING
FINANCIAL PLAN
•Nature of the Industry
•Standing of the concern
•Future Plans
•Availability of sources
•General Economic Condition
•Government Control
6. STEPS IN FINANCIAL PLANNING
•Establishing Financial Objectives
•Formulating Financial Policies
•Formulating Procedures
•Providing for flexibilty