Financial is the result of an organized process that is commonly referred to as money management or financial planning and control. Financial planning is the process of managing money to achieve economic satisfaction. This planning process allows for controlling financial situation. Every organisation has a unique financial position, and any financial activity therefore must also be carefully planned to meet specific needs and goals. A comprehensive financial plan can enhance the quality of organisation life and increase future needs and resources. The specific advantages of personal financial planning include Increased effectiveness in obtaining, using, and protecting your financial resources throughout your lifetime The objective of the present study was to study the financial planning and to analyze the financial control. The tools applied for this study are Additional Fund Needed, Breakeven Analysis, Index analysis etc, findings reveals that the additional fund needed was increased during the study period. The company has to reduce the additional fund needed, dividend payout ratio, plant capacity and in order to increase the retained earnings and profit margin. For most companies, planning and controlling is a necessary but painful process. Unfortunately, it is often a prolonged exercise that takes so long that the starting assumptions are virtually meaningless by the time the process is complete. Add to that the rapidly increasing need for reporting and controls, both from investors and to meet regulatory requirements. As per the above observations and analysis the company will have to improve its financial planning and control for the upcoming years.
This document provides an introduction to ratio analysis and financial management. It discusses key topics including the importance of finance, definitions of financial management, types of financial analysis including horizontal and vertical analysis, the objectives and functions of financial management such as investment, financing, and dividend decisions. The document aims to give an overview of ratio analysis and various aspects of financial management.
The document discusses budgets and budgetary control. It defines a budget as a quantitative and monetary expression of a plan of action relating to an upcoming period. Budgetary control is defined as establishing budgets related to executive responsibilities and policies, and continuously comparing actual results to budgeted results to ensure objectives are met or provide a basis for revision. The document also discusses the importance of budgets for planning, coordination, control and motivation. It provides definitions of budgets and budgetary control from various sources and outlines the key aspects and procedures of establishing an effective budgetary control system.
The document provides information about a final exam for a nonprofit financial management course. It consists of 3 parts worth a total of 100 points: Part I is an essay question worth 30 points, Part II consists of short answer questions worth 40 total points by answering 4 out of 6 questions, and Part III contains 2 problem/application questions worth 15 points each for a total of 30 points. The exam tests concepts covered in the course and requires students to integrate readings, cases, and analyses in their responses.
The document provides information about financial statement analysis. It defines financial statement analysis as the process of evaluating relationships between parts of financial statements to understand a firm's position and performance. It discusses the different types of financial statements and the various users of financial statements, including management, creditors, investors, and government. It also outlines different types of financial analysis, including ratio analysis and comparative statement analysis. Ratio analysis is described as a key tool that establishes relationships between financial metrics to evaluate a firm's liquidity, leverage, activity, and profitability.
Strategic financial management refers to both the financial implications of business strategies and the strategic management of finances. It takes a long-term perspective to facilitate growth, sustainability, and competitive advantage. Strategic financial management deals with investment, financing, liquidity, and dividend decisions and applies financial techniques to strategic decision making to help achieve objectives. An effective strategic financial plan considers scenarios, start-up costs, ongoing costs, revenue, objectives, and what the planning process will accomplish for the organization.
Strategic financial management combines accounting and financial management to help achieve organizational objectives through strategic decisions around financing, investments, dividends and portfolios. It is important for long-term survival and market leadership. Financial policy and strategic management are closely linked, as strategic decisions require financial considerations and financial policies shape organizational strategy and growth. Sustainable growth requires balancing financial goals with distributing resources in a way that benefits future stakeholders.
This document contains information about budgetary control processes at Shimoga Milk Union Limited (SHIMUL), including:
1. It describes the key activities, organizational structure, and processes of SHIMUL's financial management department.
2. It provides an overview of different types of budgets used at SHIMUL like the master budget, financial budget, fixed budget, and flexible budget.
3. It discusses the zero-based budgeting technique and how it aims to overcome limitations of traditional budgeting by focusing on priorities, alternatives, and efficiencies throughout the organization.
The document serves as a literature review on budgetary control concepts and processes relevant to understanding SHIMUL's budgeting practices.
Financial management ....the millieum financial management part 2 of 3raufik tajuddin
The document outlines the key responsibilities and activities of a financial manager. As a financial manager, one would be expected to prepare financial statements and reports, analyze market trends for expansion opportunities, ensure legal and regulatory compliance, and advise senior management on profit-maximizing strategies. Financial managers oversee budgeting, accounting, investments, and financing to achieve the long-term financial goals of the organization. They must have strong analytical, communication, and detail-oriented skills to perform capital budgeting and make optimal investment and financing decisions.
This document provides an introduction to ratio analysis and financial management. It discusses key topics including the importance of finance, definitions of financial management, types of financial analysis including horizontal and vertical analysis, the objectives and functions of financial management such as investment, financing, and dividend decisions. The document aims to give an overview of ratio analysis and various aspects of financial management.
The document discusses budgets and budgetary control. It defines a budget as a quantitative and monetary expression of a plan of action relating to an upcoming period. Budgetary control is defined as establishing budgets related to executive responsibilities and policies, and continuously comparing actual results to budgeted results to ensure objectives are met or provide a basis for revision. The document also discusses the importance of budgets for planning, coordination, control and motivation. It provides definitions of budgets and budgetary control from various sources and outlines the key aspects and procedures of establishing an effective budgetary control system.
The document provides information about a final exam for a nonprofit financial management course. It consists of 3 parts worth a total of 100 points: Part I is an essay question worth 30 points, Part II consists of short answer questions worth 40 total points by answering 4 out of 6 questions, and Part III contains 2 problem/application questions worth 15 points each for a total of 30 points. The exam tests concepts covered in the course and requires students to integrate readings, cases, and analyses in their responses.
The document provides information about financial statement analysis. It defines financial statement analysis as the process of evaluating relationships between parts of financial statements to understand a firm's position and performance. It discusses the different types of financial statements and the various users of financial statements, including management, creditors, investors, and government. It also outlines different types of financial analysis, including ratio analysis and comparative statement analysis. Ratio analysis is described as a key tool that establishes relationships between financial metrics to evaluate a firm's liquidity, leverage, activity, and profitability.
Strategic financial management refers to both the financial implications of business strategies and the strategic management of finances. It takes a long-term perspective to facilitate growth, sustainability, and competitive advantage. Strategic financial management deals with investment, financing, liquidity, and dividend decisions and applies financial techniques to strategic decision making to help achieve objectives. An effective strategic financial plan considers scenarios, start-up costs, ongoing costs, revenue, objectives, and what the planning process will accomplish for the organization.
Strategic financial management combines accounting and financial management to help achieve organizational objectives through strategic decisions around financing, investments, dividends and portfolios. It is important for long-term survival and market leadership. Financial policy and strategic management are closely linked, as strategic decisions require financial considerations and financial policies shape organizational strategy and growth. Sustainable growth requires balancing financial goals with distributing resources in a way that benefits future stakeholders.
This document contains information about budgetary control processes at Shimoga Milk Union Limited (SHIMUL), including:
1. It describes the key activities, organizational structure, and processes of SHIMUL's financial management department.
2. It provides an overview of different types of budgets used at SHIMUL like the master budget, financial budget, fixed budget, and flexible budget.
3. It discusses the zero-based budgeting technique and how it aims to overcome limitations of traditional budgeting by focusing on priorities, alternatives, and efficiencies throughout the organization.
The document serves as a literature review on budgetary control concepts and processes relevant to understanding SHIMUL's budgeting practices.
Financial management ....the millieum financial management part 2 of 3raufik tajuddin
The document outlines the key responsibilities and activities of a financial manager. As a financial manager, one would be expected to prepare financial statements and reports, analyze market trends for expansion opportunities, ensure legal and regulatory compliance, and advise senior management on profit-maximizing strategies. Financial managers oversee budgeting, accounting, investments, and financing to achieve the long-term financial goals of the organization. They must have strong analytical, communication, and detail-oriented skills to perform capital budgeting and make optimal investment and financing decisions.
A Study on Budgetary Control System conducted at Hassan Cooperative Milk Prod...Projects Kart
A Study on Budgetary Control System conducted at Hassan Cooperative Milk Producers Societies. One the primary functions of the management is planning. Most of the planning relates to individual situations and individual proposals. However, this has to be supplemented and reinforced by overall periodic planning followed by continuous comparison of the actual performance with the planned performance. Budgetary control has, therefore, become as essential tool of management for controlling costs and maximizing
“Budget” and “Budgeting” are concepts traceable to the bible days, precisely the days of Joseph in Egypt. It was reported that “nothing was given out of the treasure without a written order”. History has it that Joseph budgeted and stored grains which lasted the Egyptians throughout the seven years of famine.
Budgets were first introduced in the 1920s as a tool to manage costs and cash flows in large industrial organizations. Johnson states that it was during the 1960s that companies began to use budgets to dictate what people needed to do. In the 1970s performance improvement was based on meeting financial targets rather than effectiveness. Companies then faced problems in the 1980s and 1990s when they were not willing to spend money on innovations in order to stay with the rigid budgets; they were no longer concerned about how customers were being treated; only meeting sales targets became essential.
The document summarizes the author's summer training project analyzing working capital management at CG Cement Pvt. Ltd. It includes acknowledgments to those who supported and guided the project. The preface outlines the study's aim to analyze CG Cement's working capital management using ratio analysis, trend analysis, and common-size analysis of 3 years of financial data. The executive summary provides an overview of the importance of working capital management and the study's objective to evaluate CG Cement's management of working capital and ability to meet short-term obligations.
This document outlines a study on budgetary control conducted at Shimoga Milk Union Ltd located in Shimoga, Karnataka. It includes a certificate from the guide and principal of Haranahalli Ramaswamy Institute of Higher Education approving the study. The study was conducted by Ashwini E. in partial fulfillment of the requirements for a Master's degree in Business Administration from the University of Mysore.
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online
The document discusses strategic financial management and provides details on:
1. Strategic financial management focuses on the long-term outlook and anticipating environmental changes.
2. Strategic planning involves studying internal/external factors, identifying opportunities/threats, and leveraging core competencies.
3. Financial forecasting helps prepare pro forma statements and budgets to project the future financial position.
At the end of this presentation you will understand the essentials of financial management including building blocks and tools of financial management; accounting records; financial planning and monitoring; managing audits and how to safeguard your assets (internal control)
Strategic management involves developing strategic, functional, and operational plans to guide an organization towards its goals. There are three levels of strategy: corporate strategy sets overall objectives; business strategy achieves business unit goals within the corporate framework; and functional strategy implements principal activities. Financial planning is key, addressing issues like profit versus wealth maximization, cash flow, credit, and liquidity. Financial policy must be integrated with strategic management regarding capital structure, investments, and dividends. Sustainable growth requires balancing financial goals with preserving resources long-term, assessed using valuation or pricing methods.
Introduction
Meaning and definition of financial management;
Approaches to financial management;
Scope of financial management;
Functions of financial management;
Corporate objectives:
Profit Maximization and
Wealth Maximization
Other objectives
Social implications of corporate objectives
Concept of cash flow
Time value of money
This document discusses financial statement analysis and financial management concepts. It begins by defining key finance terms like finance, business finance, and financial management. It then covers the objectives of financial management, which include profit maximization, wealth maximization, maintaining balance asset structure, liquidity, proper planning of funds, efficiency, and financial discipline. Finally, it discusses financial statement analysis and defines financial statements as schedules that reveal a company's financial position and results of operations through items like the balance sheet and income statement.
The document discusses investment decisions and project evaluation. It defines investment decision as selecting the types of assets a firm will invest funds in. It also discusses classifying investments into expansion of existing business, expansion of new business, and replacement and modernization. Project evaluation is defined as systematically investigating a project's worth by discussing an evaluation plan, collecting and analyzing information, and distributing findings to understand or make decisions about the project.
Correlation between financial leverage and firm valueAlexander Decker
This document summarizes a research study on the correlation between financial leverage and firm value for companies listed on the Tehran Stock Exchange. The study analyzed 153 accepted companies over a 5-year period from 2005 to 2010. The main findings were:
1) There is a negative significant correlation between financial leverage and other variables like earnings per share, price earnings ratio, return on equity, return on assets, and operating profit.
2) According to the correlations, it is suggested shareholders consider these variables when making financial decisions to achieve an optimal capital structure, and managers decrease debt proportions to increase firm value.
3) Managers should help shareholders choose influential resources to increase wealth through strategic planning.
This document provides an overview of capital budgeting principles and techniques. It discusses key concepts such as identifying relevant cash flows, evaluation techniques like payback period, accounting rate of return, net present value, and internal rate of return. It also covers the capital budgeting process and types of investment decisions such as expansion, replacement, and contingent investments. The document is intended to teach students about evaluating long-term investment projects and making capital budgeting decisions.
Quick guide for small and mid sized Non-governmental Organizations' (NGOs'), Civil Society Organizations' (CSOs'), Community Based Organizations (CBOs'), Charities & Causes
This document provides an introduction to finance and working capital. It defines key terms like finance, working capital, gross working capital and net working capital. It discusses the importance of financial planning and maintaining adequate versus excessive working capital. It also outlines the operating cycle for manufacturing and trading businesses to demonstrate the time gaps that working capital is needed to address.
This document discusses finance strategy. It covers acquiring capital from various sources like equity or debt. It also discusses developing projected financial statements and budgets to examine expected results and proper utilization of funds. Management and usage of funds is important for strategy implementation regarding capital investments, assets, loans, and dividends. The document also discusses evaluating business worth through net worth, future benefits, and market valuation compared to similar companies. The overall goals of a finance strategy are to provide an appropriate financial structure, explore strategic alternatives, gain competitive advantages through lower funding costs, and increase shareholder returns.
The document provides an overview of financial accounting and analysis. It defines accounting and discusses its purpose of providing quantitative financial information to help users make better business decisions. The summary also outlines the key financial statements - the income statement, balance sheet, and cash flow statement - and discusses their purpose in showing financial performance and position. Finally, it discusses the accounting cycle of collecting, recording, and reporting financial data.
The document discusses financial strategy formulation. It covers acquiring needed capital through various sources of funds like debt and equity. It also discusses developing projected financial statements and budgets to evaluate the impact of different strategies. Managing and optimally using funds is also important, as is evaluating the worth of the business for potential acquisitions or sales. The strategies aim to determine optimal capital structure, procurement of capital, and relationships with financial institutions.
Strategic financial management[1] is the study of finance with a long-term view considering the strategic goals of the enterprise. Financial management is nowadays increasingly referred to as "Strategic Financial Management" so as to give it an increased frame of reference.
To understand what strategic financial management is about, we must first understand what is meant by the term "Strategic". Which is something that is done as part of a plan that is meant to achieve a particular purpose.
Therefore, Strategic Financial Management is that aspect of the overall plan of the organization that concerns financial managers. This includes different parts of the business plan, for example, marketing and sales plan, production plan, personnel plan, capital expenditure, etc. These all have financial implications for the financial managers of an organization.
This document provides an introduction to financial management and ratio analysis. It discusses how financial management is important for resource allocation and profit maximization. Ratio analysis is also introduced as an important tool to study the financial position of companies by examining relationships between financial data points. The objectives, significance and methodology of ratio analysis are outlined. Limitations of ratio analysis for the study are also noted.
minor project on ratio analysis of "......"Kh Corporate
This document is a project report submitted by [NAME] to Guru Gobind Singh Indraprastha University in partial fulfillment of the requirements for a Bachelor of Business Administration degree. The report focuses on ratio analysis of a particular industry and includes chapters on the introduction, research methodology, industry overview, company profile, theoretical perspective on ratio analysis, findings and analysis, and conclusions and recommendations. The introduction provides an overview of the study and its objectives, scope, significance and limitations. The research methodology chapter outlines the statement of the research problem, data collection process, presentation tools used, and research tools.
A study on financial performance analysis at cee veeAKHILHARIDAS
This document provides an overview of the global and Indian footwear industry. It discusses the history of footwear dating back to ancient civilizations. India has a large livestock population and is one of the largest producers and exporters of footwear globally, especially leather footwear. The key products exported are leather footwear, footwear components, leather garments, and leather goods. The footwear industry is concentrated in certain regions and states of India like Tamil Nadu, Delhi, Agra and Kanpur. The document also provides statistics on India's annual footwear production capacity and imports.
A Study on Performance Analysis of Nestle India Limited with Specific Referen...paperpublications3
Abstract: “Finance is the blood of the organization” Finance is used by individuals (personal finance), by government (public finance), by business (corporate finance), as well as by a wide variety of organization including school and non-profit organizations. Finance is one of the most important aspects of business management. Financial management is two way process in which finances manager obtain funds and money at low cost and risk and use it in higher earning project at minimum risk.
Financial performance analysis is the process of identifying the financial strengths and weaknesses of the firm by properly establishing the relationship between the items of balance sheet and profit and loss account. It also helps in short-term and long term forecasting and growth.
This study has aimed in identifying the financial performance of Nestle India Limited through DuPont analysis using the three factors, viz., profit margin, asset turnover and financial leverage.
This study very clearly implies through DuPont analysis, the Nestle India Limited profit is fluctuating and was stagnant consecutively for three years.
A Study on Budgetary Control System conducted at Hassan Cooperative Milk Prod...Projects Kart
A Study on Budgetary Control System conducted at Hassan Cooperative Milk Producers Societies. One the primary functions of the management is planning. Most of the planning relates to individual situations and individual proposals. However, this has to be supplemented and reinforced by overall periodic planning followed by continuous comparison of the actual performance with the planned performance. Budgetary control has, therefore, become as essential tool of management for controlling costs and maximizing
“Budget” and “Budgeting” are concepts traceable to the bible days, precisely the days of Joseph in Egypt. It was reported that “nothing was given out of the treasure without a written order”. History has it that Joseph budgeted and stored grains which lasted the Egyptians throughout the seven years of famine.
Budgets were first introduced in the 1920s as a tool to manage costs and cash flows in large industrial organizations. Johnson states that it was during the 1960s that companies began to use budgets to dictate what people needed to do. In the 1970s performance improvement was based on meeting financial targets rather than effectiveness. Companies then faced problems in the 1980s and 1990s when they were not willing to spend money on innovations in order to stay with the rigid budgets; they were no longer concerned about how customers were being treated; only meeting sales targets became essential.
The document summarizes the author's summer training project analyzing working capital management at CG Cement Pvt. Ltd. It includes acknowledgments to those who supported and guided the project. The preface outlines the study's aim to analyze CG Cement's working capital management using ratio analysis, trend analysis, and common-size analysis of 3 years of financial data. The executive summary provides an overview of the importance of working capital management and the study's objective to evaluate CG Cement's management of working capital and ability to meet short-term obligations.
This document outlines a study on budgetary control conducted at Shimoga Milk Union Ltd located in Shimoga, Karnataka. It includes a certificate from the guide and principal of Haranahalli Ramaswamy Institute of Higher Education approving the study. The study was conducted by Ashwini E. in partial fulfillment of the requirements for a Master's degree in Business Administration from the University of Mysore.
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online
The document discusses strategic financial management and provides details on:
1. Strategic financial management focuses on the long-term outlook and anticipating environmental changes.
2. Strategic planning involves studying internal/external factors, identifying opportunities/threats, and leveraging core competencies.
3. Financial forecasting helps prepare pro forma statements and budgets to project the future financial position.
At the end of this presentation you will understand the essentials of financial management including building blocks and tools of financial management; accounting records; financial planning and monitoring; managing audits and how to safeguard your assets (internal control)
Strategic management involves developing strategic, functional, and operational plans to guide an organization towards its goals. There are three levels of strategy: corporate strategy sets overall objectives; business strategy achieves business unit goals within the corporate framework; and functional strategy implements principal activities. Financial planning is key, addressing issues like profit versus wealth maximization, cash flow, credit, and liquidity. Financial policy must be integrated with strategic management regarding capital structure, investments, and dividends. Sustainable growth requires balancing financial goals with preserving resources long-term, assessed using valuation or pricing methods.
Introduction
Meaning and definition of financial management;
Approaches to financial management;
Scope of financial management;
Functions of financial management;
Corporate objectives:
Profit Maximization and
Wealth Maximization
Other objectives
Social implications of corporate objectives
Concept of cash flow
Time value of money
This document discusses financial statement analysis and financial management concepts. It begins by defining key finance terms like finance, business finance, and financial management. It then covers the objectives of financial management, which include profit maximization, wealth maximization, maintaining balance asset structure, liquidity, proper planning of funds, efficiency, and financial discipline. Finally, it discusses financial statement analysis and defines financial statements as schedules that reveal a company's financial position and results of operations through items like the balance sheet and income statement.
The document discusses investment decisions and project evaluation. It defines investment decision as selecting the types of assets a firm will invest funds in. It also discusses classifying investments into expansion of existing business, expansion of new business, and replacement and modernization. Project evaluation is defined as systematically investigating a project's worth by discussing an evaluation plan, collecting and analyzing information, and distributing findings to understand or make decisions about the project.
Correlation between financial leverage and firm valueAlexander Decker
This document summarizes a research study on the correlation between financial leverage and firm value for companies listed on the Tehran Stock Exchange. The study analyzed 153 accepted companies over a 5-year period from 2005 to 2010. The main findings were:
1) There is a negative significant correlation between financial leverage and other variables like earnings per share, price earnings ratio, return on equity, return on assets, and operating profit.
2) According to the correlations, it is suggested shareholders consider these variables when making financial decisions to achieve an optimal capital structure, and managers decrease debt proportions to increase firm value.
3) Managers should help shareholders choose influential resources to increase wealth through strategic planning.
This document provides an overview of capital budgeting principles and techniques. It discusses key concepts such as identifying relevant cash flows, evaluation techniques like payback period, accounting rate of return, net present value, and internal rate of return. It also covers the capital budgeting process and types of investment decisions such as expansion, replacement, and contingent investments. The document is intended to teach students about evaluating long-term investment projects and making capital budgeting decisions.
Quick guide for small and mid sized Non-governmental Organizations' (NGOs'), Civil Society Organizations' (CSOs'), Community Based Organizations (CBOs'), Charities & Causes
This document provides an introduction to finance and working capital. It defines key terms like finance, working capital, gross working capital and net working capital. It discusses the importance of financial planning and maintaining adequate versus excessive working capital. It also outlines the operating cycle for manufacturing and trading businesses to demonstrate the time gaps that working capital is needed to address.
This document discusses finance strategy. It covers acquiring capital from various sources like equity or debt. It also discusses developing projected financial statements and budgets to examine expected results and proper utilization of funds. Management and usage of funds is important for strategy implementation regarding capital investments, assets, loans, and dividends. The document also discusses evaluating business worth through net worth, future benefits, and market valuation compared to similar companies. The overall goals of a finance strategy are to provide an appropriate financial structure, explore strategic alternatives, gain competitive advantages through lower funding costs, and increase shareholder returns.
The document provides an overview of financial accounting and analysis. It defines accounting and discusses its purpose of providing quantitative financial information to help users make better business decisions. The summary also outlines the key financial statements - the income statement, balance sheet, and cash flow statement - and discusses their purpose in showing financial performance and position. Finally, it discusses the accounting cycle of collecting, recording, and reporting financial data.
The document discusses financial strategy formulation. It covers acquiring needed capital through various sources of funds like debt and equity. It also discusses developing projected financial statements and budgets to evaluate the impact of different strategies. Managing and optimally using funds is also important, as is evaluating the worth of the business for potential acquisitions or sales. The strategies aim to determine optimal capital structure, procurement of capital, and relationships with financial institutions.
Strategic financial management[1] is the study of finance with a long-term view considering the strategic goals of the enterprise. Financial management is nowadays increasingly referred to as "Strategic Financial Management" so as to give it an increased frame of reference.
To understand what strategic financial management is about, we must first understand what is meant by the term "Strategic". Which is something that is done as part of a plan that is meant to achieve a particular purpose.
Therefore, Strategic Financial Management is that aspect of the overall plan of the organization that concerns financial managers. This includes different parts of the business plan, for example, marketing and sales plan, production plan, personnel plan, capital expenditure, etc. These all have financial implications for the financial managers of an organization.
This document provides an introduction to financial management and ratio analysis. It discusses how financial management is important for resource allocation and profit maximization. Ratio analysis is also introduced as an important tool to study the financial position of companies by examining relationships between financial data points. The objectives, significance and methodology of ratio analysis are outlined. Limitations of ratio analysis for the study are also noted.
minor project on ratio analysis of "......"Kh Corporate
This document is a project report submitted by [NAME] to Guru Gobind Singh Indraprastha University in partial fulfillment of the requirements for a Bachelor of Business Administration degree. The report focuses on ratio analysis of a particular industry and includes chapters on the introduction, research methodology, industry overview, company profile, theoretical perspective on ratio analysis, findings and analysis, and conclusions and recommendations. The introduction provides an overview of the study and its objectives, scope, significance and limitations. The research methodology chapter outlines the statement of the research problem, data collection process, presentation tools used, and research tools.
A study on financial performance analysis at cee veeAKHILHARIDAS
This document provides an overview of the global and Indian footwear industry. It discusses the history of footwear dating back to ancient civilizations. India has a large livestock population and is one of the largest producers and exporters of footwear globally, especially leather footwear. The key products exported are leather footwear, footwear components, leather garments, and leather goods. The footwear industry is concentrated in certain regions and states of India like Tamil Nadu, Delhi, Agra and Kanpur. The document also provides statistics on India's annual footwear production capacity and imports.
A Study on Performance Analysis of Nestle India Limited with Specific Referen...paperpublications3
Abstract: “Finance is the blood of the organization” Finance is used by individuals (personal finance), by government (public finance), by business (corporate finance), as well as by a wide variety of organization including school and non-profit organizations. Finance is one of the most important aspects of business management. Financial management is two way process in which finances manager obtain funds and money at low cost and risk and use it in higher earning project at minimum risk.
Financial performance analysis is the process of identifying the financial strengths and weaknesses of the firm by properly establishing the relationship between the items of balance sheet and profit and loss account. It also helps in short-term and long term forecasting and growth.
This study has aimed in identifying the financial performance of Nestle India Limited through DuPont analysis using the three factors, viz., profit margin, asset turnover and financial leverage.
This study very clearly implies through DuPont analysis, the Nestle India Limited profit is fluctuating and was stagnant consecutively for three years.
Finance is the lifeblood and lifeline of any business entity either commercial or non-commercial. The
Survival, Stability and Sustainability of a firm is highly associated with its financial wellness. It can be observed through its ability to pay(re) short-term as well as long term liabilities, meeting the regular financial obligations, to increase the value of firm and ability to generate profit. Financial analysis, evaluation, and assessment help in determines the financial position and financial strength of a firm. Among the plenty of methods and tolls available for financial performance, ratio analysis is more useful and meaningful. These ratios make it possible to analyze the evolution of the financial situation of a firm (trend analysis), cross-sectional analysis and comparative analysis.
A STUDY ON FINANCIAL PERFORMANCE OF OIL AND NATURAL GAS CORPORATION (ONGC)AARIF KHAN
This document is a project report submitted for a master's degree that analyzes the financial performance of Oil and Natural Gas Corporation (ONGC) in India. It includes an introduction, literature review, methodology, analysis of ONGC's financial statements using various tools like ratio analysis, trend analysis, common size statements, and conclusions. The project was conducted under the guidance of faculty members and aims to evaluate ONGC's profitability and financial strength through analyzing its accounting data and financial reports.
Is The Budget Has Outlived Its Usefulness On The 21St...Michelle Singh
The document discusses whether traditional budgeting processes should be abolished, with some arguing they are too time-consuming and can encourage dysfunctional behavior, while others believe they are still useful control mechanisms if improved; it also analyzes criticisms of traditional budgeting related to fixed performance contracts and incentives for misreporting, though notes alternative views; and suggests budgets should be reformed rather than eliminated to address issues while maintaining their benefits.
1) The document discusses the importance and functions of financial management, including planning, acquiring funds, allocating funds, and controlling finances.
2) Key tools and techniques of financial management are discussed, including cost of capital, financial leverage, capital budgeting, ratio analysis, and cash flow statements.
3) The functions of a finance manager are outlined, such as planning, organizing, controlling finances, maintaining liquidity and profitability, and achieving corporate goals. References for further reading on financial management are also provided.
A Study on Funds Flow Analysis of Vital Pvt. Ltd., Tadaijtsrd
Finance is the lifeblood of every business activity without which the wheels of modern business organization system cannot be greased. Finance management is managerial activity, which is concerned with planning and controlling of the firms financial Resources. Finance is a scarce resource and it has to be managed efficiency for the successful functioning of any company. Several companies have come to grief mainly because of inefficient management of finance, in spite of other favourable conditions. This study explains the funds flow statement analysis of vital pvt. Ltd., Tada. R. Yugandhar | Dr. K. Haritha "A Study on Funds Flow Analysis of Vital Pvt. Ltd., Tada" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-6 | Issue-6 , October 2022, URL: https://www.ijtsrd.com/papers/ijtsrd52025.pdf Paper URL: https://www.ijtsrd.com/management/accounting-and-finance/52025/a-study-on-funds-flow-analysis-of-vital-pvt-ltd-tada/r-yugandhar
Mastering the Art of Impactful Finance Reporting.pdfJohnnyKhalifa
Finance reporting is critical for organisations to communicate financial performance, make informed decisions, and enhance transparency and accountability. Crafting an impactful finance report requires a blend of financial acumen, analytical skills, and effective communication. With the assistance of finance assignment help Australia services, individuals can navigate the complexities of finance reporting, ensuring that their reports deliver actionable insights and drive organisational success. This post explores the key components and best practices for writing impactful finance reports.
SYBBI MANAGEMENT ACCOUNTING NOTES SEM IIISunnyPunjabi4
This document provides an overview of management accounting. It defines management accounting and discusses how it differs from financial accounting. It outlines the roles and tools of management accounting, including planning, decision making, control, and reporting. It also discusses various management accounting concepts like working capital, budgets, cost accounting, and financial statement analysis. The document is an introductory chapter on management accounting that defines key terms and concepts at a high level.
This document provides background information on the steel industry. It discusses the history of steel production dating back to ancient China. It then discusses the global steel industry, noting recent years of growth in supply and demand. For the Indian steel industry, it outlines the development of major steel plants after independence, with Steel Authority of India (SAIL) now accounting for over 40% of production. It positions steel as crucial for modern development and notes India's steel industry is growing to meet rising domestic and export demand from key sectors.
Cash BudgetThe working capital management consist of the relatio.docxtroutmanboris
Cash Budget
The working capital management consist of the relationship of the company short-term liabilities & assets. Its goal is to confirm that an organization can maintain its operations in addition has enough capacity to satisfy all evolving short-term debt also potential operational expenses. The working capital management includes managing accounts payable, receivable, cash, and inventories (Studyfinance, 2020, p. para 1). As per the scenario, we take two components: inventory management and cash budget.
Cash Budget
A cash budget fixes the expected cash sources as well as uses it in a future. This budget used to measure either operations of the company and other activities can produce sufficient cash to fulfill the expected requirements of cash. Unless, then management needs to find alternative sources of financing. The cash budget inputs come from various other budgets. The cash budget enumerates debt, investments, and both interest expense and income which result in financing budget.
Example
The example demonstrates that the company is positioned in a negative cash situation by an excessively large dividend in the second cash budget week, combined with a major asset purchase the next week. Paying such a high dividend may be a challenge for lenders who don't like issuing loans; therefore, businesses can use the money to pay their shareholders and thus undermine their ability to repay the loans. Therefore, accepting a minimal dividend payout and eliminating a negative cash position can be better for the company (Accountingtools, 2019, p. para 2).
Inventory Management
Inventory management is refers to that process which includes storing, organizing, as well as using the inventory of a company. These contain the management of components, finished products, raw materials, as well as processing and warehousing such items. For companies through complex manufacturing processes and supply chains, balancing the inventory shortages and gluts risks is specifically difficult (Hayes, 2019, p. para 1).
References
Accountingtools. (2019). Cash budget. Retrieved from accountingtools: https://www.accountingtools.com/articles/2017/5/15/cash-budget
Hayes, A. (2019). Inventory management. Retrieved from investopedia: https://www.investopedia.com/terms/i/inventory-management.asp
Studyfinance. (2020). Working capital management. Retrieved from studyfinance: https://studyfinance.com/working-capital-management/
Plan Proposal Template
The following is a guide to organize your assignment. Please be sure to remove the guiding questions and comments for each section. You are expected to write in a professional and academically appropriate manner, including using correct APA style and citations throughout.
Propose a plan, referencing relevant existing and newly created processes, to implement an intervention to improve quality and safety, and reduce costs in the context of a chosen health problem.
· Introduce a general summary of the project plan that you .
This document discusses Wahid's view on using financial and economic analysis to support modern business decision making. It explains that financial analysis can help managers increase corporate and shareholder value through strategies like mergers and acquisitions. The document also discusses how financial analysis should be conducted effectively by regularly monitoring progress, applying standards, and identifying areas for improvement. It emphasizes that financial analysis is important for operational planning, strategy planning, performance reviews, and management decision making.
A stuy on interpretation and analysis of ratio analysis and performance evalu...Projects Kart
The document discusses performance evaluation on financial statements. It begins with an introduction on the importance of financial management in businesses. It then discusses the meaning of key terms like financial management, financial statements, and financial analysis and interpretation. It outlines the objectives, scope, and importance of financial statement analysis. Finally, it discusses the methodology, sources of data, types of analysis and the objectives of the study. The key points are:
1. Financial management is important for efficient use of capital funds and raising funds at lower costs.
2. Financial statements include the balance sheet and profit/loss statement and provide information on financial position and performance.
3. Financial analysis and interpretation involves studying relationships in financial data to evaluate profit
This document discusses financial management and provides an overview of funds flow statements. It defines financial management as dealing with the management of money matters. It also defines funds flow statements as statements that show the movement of funds and the sources and applications of funds for a business over a period of time. Funds flow statements are important as they help business owners and investors understand the incoming and outgoing cash flows of a business and assess its financial standing over time. The objectives of preparing funds flow statements are to analyze the movement of funds between balance sheet dates and identify changes in working capital elements.
The document provides an introduction to financial statement analysis. It discusses that financial statement analysis involves reviewing a company's financial statements, including the income statement, balance sheet, and statement of cash flows, to assess performance. The document outlines the objectives and scope of analyzing the financial statements of Sitaram Textiles Ltd over a 5-year period from 2011-2015. It describes the sources of data, research methodology, limitations, and timeline of the study. Finally, it provides a literature review on financial statement analysis and what financial statements are.
The document provides an overview of financial management concepts including the meaning, nature, scope and objectives of financial management. It discusses the organizational structure of a finance department and key responsibilities of a financial manager such as capital budgeting, investment decisions, and cash management. The document also covers understanding capital markets, related disciplines like finance and accounting, components and major differences between the old and new formats of a balance sheet as per Indian accounting standards. In summary, the document serves as an introductory guide to basic concepts in the field of financial management.
Management accounting is the process of analyzing business costs and operations to prepare internal reports and records to aid managers' decision-making. It involves collecting accounting information using financial and cost accounting and translating it into useful information for management. The objectives of management accounting include measuring performance, assessing risk, allocating resources, and presenting financial statements. It uses tools like budgeting, variance analysis, and cash flow analysis to help managers with planning, decision-making, and control.
Chapter 2 Strategic Planning and Budgeting—Process, Preparation, .docxchristinemaritza
Chapter 2: Strategic Planning and Budgeting—Process, Preparation, and Control
OVERVIEW
Although it differs among companies, planning charts the direction of the company over a period of time to accomplish a desired result, such as improving profitability. Budgeting is simply one portion of the plan, and the annual budget should be consistent with the long-term goals of the business. Planning should link short-term, intermediate-term, and long-term goals. Plans are interrelated, and the annual plan may be based on the long-term plan. The objective is to make the best use of the company's available resources over the long term.
In planning, management selects long-term and short-term goals and draws up plans to accomplish those goals. Planning is more important in long-run management. The objectives of a plan must be continually appraised in terms of degree of accomplishment and how long implementation will take. There should be feedback as to the plan's progress. It is best to concentrate on accomplishing fewer targets so proper attention will be given to them. Objectives must be specific and measurable. For example, a target to increase sales by 20 percent is definite and specific. The manager can quantitatively measure progress toward meeting this target.
The plan is the set of details implementing a strategy. The plan of execution typically is explained in sequential steps, including costs and timing for each step. Deadlines are set.
The planning function includes all managerial activities that ultimately enable an organization to achieve its goals. Because every organization needs to set and achieve goals, planning often is called the first function of management. At the highest levels of business, planning involves establishing company strategies—that is, determining how the resources of the business will be used to reach its objective. Planning also involves the establishment of policies—the day-to-day guidelines used by managers to accomplish their objectives. The elements of a plan include objectives, performance standards, appraisal of performance, action plan, and financial figures.
All management levels should be involved in preparing budgets. There should be a budget for each responsibility center. Responsibility in particular areas should be assigned for planning to specific personnel. At MillerCoors Company, planning is ongoing, encouraging managers to assume active roles in the organization.
A plan is a predetermined action course. Planning has to consider the organizational structure, taking into account authority and responsibility. Planning is determining what should be done, how it should be done, and when it should be done. The plan should specify the nature of the problems, reasons for them, constraints, contents, characteristics, category, alternative ways of accomplishing objectives, and information required. Planning objectives include quantity and quality of products and services, as well as growth opportunities.
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Similar to Analytical Investigation of Financial Planning and Control Practices: A Case Analysis (20)
This study examined the influence of the characteristics of the audit committee on Palestinian firms’ value. The research explores precisely the effect on the Audit Committee characteristics’ efficiency, namely, independence, expertise, evaluating the relationship among dependent and independent variables. Secondary data collected from a list of companies were registered in the Palestine Stock Exchange from 2011 to 2018. Individual variables considered are the independence & expertise of the audit committee, whereas the ROA is employed as the dependent variable as an indicator of a firm’s value. The results showed that the Audit Committee’s independence & expertise substantially positive with ROA. The study concluded that the audit committee’s characteristics are enhancing firm performance. The implications of this study’s findings can be used by decisions and policymakers, the firm’s management, and other stockholders’ interests to create reliable ties between agents and the principals.
There is increasing acceptability of emotional intelligence as a major factor in personality assessment and effective human resource management. Emotional intelligence as the ability to build capacity, empathize, co-operate, motivate and develop others cannot be divorced from both effective performance and human resource management systems. The human person is crucial in defining organizational leadership and fortunes in terms of challenges and opportunities and walking across both multinational and bilateral relationships. The growing complexity of the business world requires a great deal of self-confidence, integrity, communication, conflict, and diversity management to keep the global enterprise within the paths of productivity and sustainability. Using the exploratory research design and 255 participants the result of this original study indicates a strong positive correlation between emotional intelligence and effective human resource management. The paper offers suggestions on further studies between emotional intelligence and human capital development and recommends conflict management as an integral part of effective human resource management.
This paper examines the role of loan characteristics in mortgage default probability for different mortgage lenders in the UK. The accuracy of default prediction is tested with two statistical methods, a probit model and linear discriminant analysis, using a unique dataset of defaulted commercial loan portfolios provided by sixty-six financial institutions. Both models establish that the attributes of the underlying real estate asset and the lender are significant factors in determining default probability for commercial mortgages. In addition to traditional risk factors such as loan-to-value and debt servicing coverage ratio lenders and regulators should consider loan characteristics to assess more accurately probabilities of default.
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Ponzi schemes, a notorious form of financial fraud, have plagued America’s investment landscape for decades. Named after Charles Ponzi, who orchestrated one of the most infamous schemes in the early 20th century, these fraudulent operations promise high returns with little or no risk, only to collapse and leave investors with significant losses. This article explores the nature of Ponzi schemes, notable cases in American history, their impact on victims, and measures to prevent falling prey to such scams.
Understanding Ponzi Schemes
A Ponzi scheme is an investment scam where returns are paid to earlier investors using the capital from newer investors, rather than from legitimate profit earned. The scheme relies on a constant influx of new investments to continue paying the promised returns. Eventually, when the flow of new money slows down or stops, the scheme collapses, leaving the majority of investors with substantial financial losses.
Historical Context: Charles Ponzi and His Legacy
Charles Ponzi is the namesake of this deceptive practice. In the 1920s, Ponzi promised investors in Boston a 50% return within 45 days or 100% return in 90 days through arbitrage of international reply coupons. Initially, he paid returns as promised, not from profits, but from the investments of new participants. When his scheme unraveled, it resulted in losses exceeding $20 million (equivalent to about $270 million today).
Notable American Ponzi Schemes
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2. Allen Stanford: Through his company, Stanford Financial Group, Allen Stanford orchestrated a $7 billion Ponzi scheme, luring investors with fraudulent certificates of deposit issued by his offshore bank. Stanford promised high returns and lavish lifestyle benefits to his investors, which ultimately led to a 110-year prison sentence for the financier in 2012.
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Confirmation of Payee was built to tackle the increasing numbers of APP Fraud and in the landscape of UK banking, the spectre of APP fraud looms large. In 2022, over £1.2 billion was stolen by fraudsters through authorised and unauthorised fraud, equivalent to more than £2,300 every minute. This statistic emphasises the urgent need for robust security measures like CoP. While over £1.2 billion was stolen through fraud in 2022, there was an eight per cent reduction compared to 2021 which highlights the positive outcomes obtained from the implementation of Confirmation of Payee. The number of fraud cases across the UK also decreased by four per cent to nearly three million cases during the same period; latest statistics from UK Finance.
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Analytical Investigation of Financial Planning and Control Practices: A Case Analysis
1. International Journal of Economics
and Financial Research
ISSN: 2411-9407
Vol. 1, No. 2, pp: 24-34, 2015
URL: http://arpgweb.com/?ic=journal&journal=5&info=aims
24
Academic Research Publishing Group
Analytical Investigation of Financial Planning and Control
Practices: A Case Analysis
K. Sivakumar Professor & Head- Management Studies, Oxford Engineering College, Tiruchirappalli – 620009-
Tamilnadu-India
Contents
1. Introduction........................................................................................................................................... 25
2. Literature Review ................................................................................................................................. 26
3. Methodology.......................................................................................................................................... 27
3.1. Objectives ...............................................................................................................................27
3.2. Scope of the Study ..................................................................................................................27
3.3. Method....................................................................................................................................28
4. Results & Discussions ........................................................................................................................... 28
4.1. Additional Fund Needed (AFN) .............................................................................................28
4.2. Income Analysis (IA)..............................................................................................................29
4.3. Cost of Sales ...........................................................................................................................29
4.4. Gross Profit.............................................................................................................................30
4.5. Fixed Expenses .......................................................................................................................30
4.6. Income before Tax ..................................................................................................................30
4.7. Break Even Analysis (BEA) ...................................................................................................30
4.8. Index Analysis (Ia)..................................................................................................................31
5. Conclusion ............................................................................................................................................. 33
References.................................................................................................................................................. 33
Bibliography.............................................................................................................................................. 34
Abstract: Financial is the result of an organized process that is commonly referred to as money management
or financial planning and control. Financial planning is the process of managing money to achieve economic
satisfaction. This planning process allows for controlling financial situation. Every organisation has a unique
financial position, and any financial activity therefore must also be carefully planned to meet specific needs and
goals. A comprehensive financial plan can enhance the quality of organisational life and increase future needs
and resources. The specific advantages of personal financial planning include Increased effectiveness in
obtaining, using, and protecting your financial resources throughout your lifetime The objective of the present
study was to study the financial planning and to analyze the financial control. The tools applied for this study
are Additional Fund Needed, Breakeven Analysis, Index analysis etc, findings reveals that the additional fund
needed was increased during the study period. The company has to reduce the additional fund needed, dividend
payout ratio, plant capacity and in order to increase the retained earnings and profit margin. For most
companies, planning and controlling is a necessary but painful process. Unfortunately, it is often a prolonged
exercise that takes so long that the starting assumptions are virtually meaningless by the time the process is
complete. Add to that the rapidly increasing need for reporting and controls, both from investors and to meet
regulatory requirements. As per the above observations and analysis the company will have to improve its
financial planning and control for the upcoming years.
Keywords: Financial planning; Financial control, Additional fund needed, Divided payout ratio.
2. International Journal of Economics and Financial Research, 2015, 1(2): 24-34
25
1. Introduction
Financial Planning and Control is one of the several functional areas of financial management, but it is the
center to the success of any business. Inefficient handling combined with the uncertainty of the business
environment often led organisations with serious problems. Financial planning and control is a continues process of
directing and allocating financial resources to meet strategic goals and objectives. Financial planning and control is
an important tool of profit planning. Control, as a tool of planning, is closely related to the broader system of
planning in an organisation. Planning involves the specification of the basic objectives that the organisation will
pursue and the fundamental policies that will guide it. The planning and control system is setting the objectives
which are defined as the broad and long-range desired state or position in the future. A firm should be managed
efficiently and effectively. This implies that the firm should be able to achieve its objectives by minimizing the use
of resources. Thus managing implies coordination and control of the efforts of the firm for achieving the
organisational objectives. One systematic approach for attempting effective management performance is financial
planning and control.
Financial planning indicated a firm’s growth, performance, investments and requirements of funds during a
given period of time, usually three to five years. It involves the preparation of projected or pro forma profit and loss
account, balance sheet and funds flow statement. Financial Planning and profit planning help a firm’s financial
manager to regulate flows of funds which is his primary concern. A financial planning involving financial policy has
direct interaction with scope and resource deployment. Financial policies - investment and financing choices - should
therefore be considered at the corporate level, and should not be treated as functional area policy decisions to decide
at lower level. The important tasks of financial manager are allocation of funds and generation of funds. So the
financial manager requires planning and control of finance to provide guidance for future operations of business.
Today any organisation wishes to maximize the wealth of shareholders. It is argued that shareholders are the ultimate
owners of the firm and the role of the manger is that of an agent acting on their behalf. Hence increase in market
share will lead to higher growth. The finance planning process involves evaluating the current financial condition of
the firm, analyzing the future growth prospects and options, appraising the investment options to achieve the stated
growth objectives, projecting the future growth and profitability, estimating funds requirements and considering
alternative financing options, comparing and choosing from alternative growth plans and financing options and
measuring actual performance with the planned performance (Pandey, 2005).
According to Kwame (2010), careless financial management practices are the main causes of failure for any
organisation, regardless of whether an owner / manager or hired - manager, if the financial decisions are wrong,
profitability of the company will be adversely affected. Most authors and research approach the specific areas of
financial management in different ways depending upon their emphasis. Walker and Petty as cited by Kieu (2004)
defined the main areas of financial management including financial planning (cash planning, fixed asset planning,
profit planning), Investment decision-making, working capital management (cash, receivables and inventory
management) and sources of financing (short-term and long –term financing, Intermediate financing and going
public). The components of financial management are financial planning and control, financial accounting, financial
analysis, management accounting, capital budgeting and working capital management (Mohd et al., 2010).
Classification of financial management practice in to the following five specific areas: Capital structure
management, working capital management, financial reporting and analysis, capital budgeting and accounting
information system (Chung and Chuang, 2009).
The managerial ability to plan, lead, organize and control is a crucial function in any enterprise. Budgeting, as
the process is commonly known, is there to aid in better management of the enterprise and to achieve higher profits
or minimize losses. A budget is defined as a detailed plan indicating how resources are to be acquired and used
(Garrison et al., 2006; Hilton et al., 2006). According to Garrison et al. (2003), budgeting systems serve multiple
purposes with planning and control being two of the more important functions. These authors state that it is up to
management to decide which function should be more appropriate to the enterprise. For example, the authors argue
that larger firms should focus on the control and coordination aspects of budgeting, whereas smaller companies
should be more concerned with the planning aspects. Planning entails setting goals for the enterprise, whereas
control implies the attainment of these goals. Longenecker and Moore (1991) agree and suggest that small
businesses that operate in uncertain and competitive environments need to plan and control their operations because
this will help owners/managers to run their businesses successfully. From the above-mentioned information it is
apparent that because of the current economic environment and the fact that there are a large number of firm failures,
organisations need to plan and control their operations. There is also a need to investigate planning and control
operations in any set of organisations.
Traditionally, budgeting was a command and control design. The systems were designed by accountants mainly
as a device for financial forecasting, managing cash flow and capital expenditure and controlling costs (Bunce and
Fraser, 1997). Top executives put the plan together and expected employees to adhere to it. This top-down approach
caused negative behaviour in employees. These days, employees desire empowerment and want to be part of the
whole planning and budgeting process. The owners of a private enterprise will probably have profit as their main
justification for the enterprise, but employees will not necessarily have the same goals. If employees are dissatisfied
with the way the owner manages the enterprise, this could cause conflict and ultimately the failure of the enterprise.
Stenzel and Stenzel (2003) Suggest that management should be mindful of the human factor in budgeting and the
budget system should be used positively. The role of traditional budgeting has changed over the years, and many
3. International Journal of Economics and Financial Research, 2015, 1(2): 24-34
26
types of financial planning and control systems are used in practice. Stenzel and Stenzel (2003), highlight a number
of important budget developments, referred to as “better budgeting”, which include continuous and flexible budgets,
zero-based budgets (ZBBs) and activity-based budgets (ABBs). In modern financial planning and control systems
with globalization and more demanding customers, a number of new management systems have developed for
managing operations, costs, time, quality and the environment. These modern management systems include activity-
based management, the balanced scorecard, theory of constraints, total quality management, just-in-time production
and inventory system. It is vitally important for the organisations to set up a financial plan in order not to experience
hardships and financial difficulties in the future. Financial plan assure financial stability and financial freedom that
one organisation wants to possess. The process of developing a sound financial plan is to routine process that indeed
involves not only careful financial analysis of the organisations situation and long-term investment to implement and
monitor that plan throughout, but also requires careful thinking of the planning and control. In order to properly
achieve the financial planning goals, one has to monitor the performance of the financial plan as well as make proper
changes when necessary.
2. Literature Review
Financial planning is the process of preparing detailed plans for all the functions, departments and activities of
the organisation. It is important that the plans and objectives that make up the budget are related to the long-term
plan and objectives of the organisation. The budget may be drawn up by preparing an overall budget for the
organisation which is then broken down into more detailed budgets for the different parts of the organisation
[the top-down approach] or by devising budgets for the various parts of the organisation and then bringing them
together to build up the overall budget [the bottom up approach]. The goal of control is ensure that operations and
performance conform to plans. Controlling includes all activities that ensure that the actions of the organisation are
directed toward the stated goals. The steps involved in control are establishing plan, goal or objective decision rule,
recording of actual performance of activity, creation of a mechanism to compare, extraction of variances,
investigating of the causes leading to the variances and correcting the variance or taking appropriate action on the
variances. With this background information we can now conveniently look at budgetary control in greater
perspective with literatures.
More managers are brought into the budgetary process; the more successful the budgetary control is likely to be.
A manager whom a budget is imposed rather than actively participating in it formulation is more likely to pay less
attention to the budget and use it unwisely in the control process (Frank, 1988). Budgetary control is a system which
takes budget as a means of producing and or selling commodities or services (Batty, 1963). The same Batty (1979)
went further to state that budgetary control aims at the performance of three primary functions of planning,
corporation and control aided by feedback and corrective action. The need to secure the actualization of the budget
through participation by saying that ‘participation tends to increase the commitment, commitment tends to heighten
motivation, motivation which is job oriented tends to make mangers work hard and more productive work by
managers tends to enhance the company’s prosperity, therefore participation is good’(Miller and Earnest, 1966).
Control as the regulation of work activities in accordance with predetermined plans, such as to ensure the
accomplishment of the organisations objectives. Control operates through standard and also measures the work
performance according to these standards and correct deviations from the standard. It presumes that there is a
standard or plan against which performance is compared (Koontz and Cyril, 1979). Budget control has been drawn
up, it can be used as an instrument of control by continually comparing actual with budget performance. Since all
activities are ultimately capable of being expressed in financial terms, the breath of control is very great. Budget
control is part of the overall system of responsibility accounting within an organisation, as costs and revenues are
analysed in accordance with areas of personal responsibilities of the budget holders through permitting financial
monitoring (Lockyer, 1983). Budgetary control as a means of control in which the actual state of affairs is
empowered with that planned for, so that the appropriate action may be taken with regards to any deviations before it
is too late (Buyers and Holmes, 1984).The budget helps managers but that budget itself needs help. To this end, top
management and indeed the work force must be in support of the budget. Where this support is however lacking,
there is bound to be problem in the actualization of the objectives of the budget (Hongren and Foster, 1985). It is
noted that many people look at budgets not as a control tool but as a straight jacket. Too much rigidity in the
pursuance of the budget could always be detrimental to the realization of the objectives of the budget (Frank, 1988).
Control concerns itself with the efficient use of resources to achieve a previously determined objective, or set of
objectives contained within a plan (Lucey, 2006). Chartered Institute of Management Accountants (2000) Budgetary
control as the process of comparing the actual results with the planned results and reporting on the variations called
variance. This according to him, sets the control framework which helps expenditure to be kept within an agreement
limits, deviations are noted all along for corrective actions. In some circumstances, it may be necessary to revise
goal, but this should not be a normal occurence but only in exceptional circumstances (Lucey, 2008). The impact of
budgeting and budgetary control on the performance of manufacturing company in Nigeria was conducted using
Cadbury Nigeria Plc, as case study. Since wants are plenty while resources are limited, every organisation tends to
find means by which it can get what it wants with the limited resources at its disposal. Therefore, firms seek to adopt
the concept of budgeting and budgetary control to satisfy their needs at the least possible cost and at the same time
fulfil their stewardship obligations to the numerous stakeholders. The researcher adopted a descriptive research
design with data gathered through questionnaire administered to respondents. Non-parametric tool of chi square was
4. International Journal of Economics and Financial Research, 2015, 1(2): 24-34
27
employed to analyse the data. Hypotheses were tested and analyzed on a 5% level of significance and it was revealed
that budgeting is a useful tool that guides firms to evaluate whether their goals and objectives are actualized.
Considering the changing environment in which firms now operate, it was concluded that budget, which is a
continuous management activity, should adapt to changes in the dynamic business environment (Siyanbola, 2013).
In the past, manufacturing enterprises were mostly concerned with manufacturing and selling their products. In
the dynamic environment of today, organisations need to compete in a buyer’s market to be successful and the
traditional systems of the past cannot always accommodate these changes. Many management accounting systems
have evolved over the years, and these include financial planning and control systems. Financial planning is the
adaption of the broad objectives, strategies and other plans of an organisation into financial terms (Welsch et al.,
1988). Today, nonfinancial indicators such as competition, availability of resources, quality and customer
satisfaction are also being used by management in their decision making. Management accounting systems help
managers and staff members with decision making, and with planning and control by gathering and supplying them
with the financial and nonfinancial information they need (Drury, 2008; Garrison et al., 2003). Financial planning
and control systems should be used by all enterprises. Research indicates that there is a widely held view that many
new businesses fail at a startling rate (Carter and Van Auken, 2006; Gruber, 2007; Monk, 2000; Perry, 2001;
Radipere and Van Scheers, 2005; Van Biesebroeck, 2005; Van Eeden et al., 2003).
Traditional budgeting in the private sector became popular at the beginning of the 20th century, and the main
function was that of cost control (Clarke, 2001). Garrison et al. (2003) Define a budget as “a detailed plan for the
acquisition and use of financial and other resources over a specified time period. It represents a plan for the future
expressed in formal quantitative terms.” In other words, a budget is a plan which, in detail, indicates how resources
are to be acquired and used. Budgeting, however, is the whole process of developing and administering the budget
(Keith and Keith, 1985), while budgetary control is a system whereby budgets are used to control the activities of an
organisation (Garrison et al., 2003). In this highly dynamic economic environment, even profitable enterprises need
to become more aggressive in their planning if they wanted to survive. To determine what skills were essential for
micro enterprises to develop into highly profitable small enterprises, Perks and Struwig (2005) did a survey on small
and micro enterprises in Port Elizabeth and found that management skills were critical for enterprise growth. They
also found that if a business had debt, budgeting was a vital tool to use because it could assist the owner with
decisions on how to make the entity profitable (Perks and Struwig, 2005). Other researchers agree and conclude that
the lack of managerial ability is one of the main reasons for failure (Radipere and Van Scheers, 2005) (Döckel and
Lighthelm, 2005). In the modern management, financial control is very important. If the financial control is
effective, the organization will grow effective in future. Financial control is one of the performance control tool that
are used by managers. Today many Public organizations provide services to the public. Jaffna municipal council is a
public organization that deals with people of Jaffna city to fulfill their daily needs. The Jaffna municipal council
provides different services to the public and it faces many difficulties to manage these activities. However it serves
with the help of government grants and other funds from various non government organizations it faces some
problems regarding finance and other physical resources (Rathiranee, 2011).
From the literature mentioned above, it is clear that financial planning and control system is a necessary part of
the management process. According to Batty (1979), when control system is introduced into a business, there is
more hope of success, and with its emphasis on preplanning, feedback and control, it can be an extremely effective
tool. Hongren and Foster (1985) concur and explain that although budgeting systems are used more commonly in
larger companies. They argue that there is uncertainty in all management
decisions, whether or not budgeting is used, and that some form of budgeting and planning would be useful in
any organisation. The above literature indicates that financial planning and control systems are necessary tools in
any size of enterprise.
3. Methodology
3.1. Objectives
The main objective of the study is to determine whether financial planning and control systems are of value to
the economic survival of manufacturing company. Then to analyse the relationship between the AFN and other
factors influences AFN. . This study aims to establish to what extent financial planning and control systems are used
in manufacturing and whether use of these management techniques is more likely to improve their survival rate.
An empirical study was conducted on manufacturing automobile company to determine which of financial planning
and control systems are used in practice and their benefit to economic survival by following objectives:
1. The research is to establish the existence or otherwise of internal Financial Control systems.
2. To find out the level of compliance and other financial management regulations.
3. To establish the consequences for compliance or non-compliance of such systems and regulations.
4. To make necessary recommendation.
3.2. Scope of the Study
Using financial planning and control systems by more efficient planning and controlling of activities should give
these small and manufacturing enterprises a better chance of survival in today’s dynamic and competitive
environment. There are various components of internal financial control systems used to develop and evaluate an
5. International Journal of Economics and Financial Research, 2015, 1(2): 24-34
28
organisational financial regulatory compliance. They need to work together to form a strong set of methods and
procedures the company follows in its operations. The research would enable the company to be aware of the
internal financial planning and controls associated with profit making organisation and to find appropriate steps in
addressing them. Findings from the study are expected to help management to have insight into internal financial
planning and controls in place and to appropriate it to achieve results.
3.3. Method
The methods adopted by the researcher are by using secondary data for the study period from 2009 to 2013. The
nature of the issues and processes under discussion necessitated the use of qualitative and quantitative analyses for
the data collected. In analyzing the secondary data of balance sheet & annual report, descriptive and inferential
statistics were used. The analysis was done with the aid of Microsoft Excel and SPSS 22. Inquiries were also made
both directly and indirectly through some questions to both the staff and management of the company. The following
analysis was incorporated to understand the financial and control practices: Additional fund needed (AFN) , Income
Analysis (IA) , Break Even Analysis (BEA), Index Analysis (IA).
4. Results & Discussions
4.1. Additional Fund Needed (AFN)
Table-01. Estimating Additional Fund Needed
2009 2010 2011 2012 2013 2014
DPR 69.93 47.17 42.11 46.95 36.81 36.81
NP 190 423.67 631.3 565.98 433.71 477.081
RE 1,976.00 2,190.10 2,523.65 2,632.34 4189.04 4,189.04
CP 7711.2375 9295.225 14258.9375 16636.99 15610.725 18300.69
P T 174.99 170.44 140.20 155.70 194.16 183.64
AP 2,207.29 3,002.68 3,505.26 4,837.41 4,749.58 202.0029
LAB 7911.24 9308.12 10616.74 11941.65 13096.71 13610.39
AFN 3340.86 3523.28 3829.92 3945.72 4189.03 4985.022
From the above Chart 1, it is been observed that the Dividend Payout Ratio (DPR) compared to 2009 it has
drastically decreased during the year 2013. It may be that the company would have yielded less profit or may have
planned for future investment by retaining the dividend of the shareholders. It is figured out during the year 2014,
DPR will remain the same. The management has to plan carefully in investing the shareholders’ dividends and
reasonable dividend are made in the near future. The work by Arnott and Asness (2003) has considered the role that
the dividend payout ratio in forecasting future earnings growth. Contrary to conventional wisdom the retained
earnings is greatest when the payout ratio is high and slowest when relatively low distributions are made. When
retained earnings has increased Additional Fund Needed (AFN) would have decreased but found to be in incremental
mode year by year comparing from the 2009 to 2013. The projected DPR for the year 2014 is been projected at
0.00
1000.00
2000.00
3000.00
4000.00
5000.00
6000.00
2009 2010 2011 2012 2013 2014
DPR-Dividend Payout Ratio RE-Retained Earnings AFN-Additional Fund Needed
Chart-01. Depicts Summary of DPR factor affecting AFN and forecast of AFN
6. International Journal of Economics and Financial Research, 2015, 1(2): 24-34
29
INR 0
INR 2,000
INR 4,000
INR 6,000
INR 8,000
INR 10,000
Income Chart 2013
Sales Revenue 100.0%
Cost of Sales 43.6%
Gross Profit
56.4%
Allocated Fixed Expenses 25.6%
Income Before Tax
30.8%
36.81% and retained earnings at Rs.4189.04 crores. The company should take measures in bringing down the AFN
when the retained earnings are in increasing mode and dividend payout ratio is in decreasing trend.
4.2. Income Analysis (IA)
Chart-02. Depicts Income Analysis during the years (2009-2013)
4.3. Cost of Sales
The cost of sales of the company has come down during the year 2013 (43.6%) when compared to 2009
(84.4%). It shows that the company has reduced the cost to create products, which has been sold. From the above
chart it is clearly understood that the company is trying to maximize profit by reducing the cost of sales.
-INR 1,000
INR 0
INR 1,000
INR 2,000
INR 3,000
INR 4,000
INR 5,000
Income Chart 2009
Sales Revenue 100.0%
Cost of Sales 84.4%
Gross Profit
15.6%
Allocated Fixed
Expenses 25.6%
Income Before Tax
-10.0%
Income Taxes
0.4%
-INR 1,000
INR 0
INR 1,000
INR 2,000
INR 3,000
INR 4,000
INR 5,000
INR 6,000
Income Chart 2010
Sales Revenue
100.0%
Cost of Sales
77.6%
Gross Profit
22.4%
Allocated Fixed
Expenses 28.4%
INR 0
INR 1,000
INR 2,000
INR 3,000
INR 4,000
INR 5,000
INR 6,000
INR 7,000
INR 8,000
INR 9,000
Income Chart 2011
Sales Revenue
100.0%
Cost of Sales 51.4%
Gross Profit
48.6%
Allocated Fixed
Expenses 27.3%
Income Before Tax
21.3%
Income Taxes
2.2%
INR 0
INR 2,000
INR 4,000
INR 6,000
INR 8,000
INR 10,000
INR 12,000
Income Chart 2012
Sales Revenue
100.0%
Cost of Sales 40.3%
Gross Profit
59.7%
Allocated Fixed
Expenses 27.8%
Income Before Tax
31.8%
Income Taxes
1.3%
7. International Journal of Economics and Financial Research, 2015, 1(2): 24-34
30
1,211.51
4,738.47
8,265.42
200.00
5,200.00
10,200.00
15,200.00
0.65 0.75 0.85
RevenuesandExpenses
Breakeven
Cost-Volume-Profit Breakeven Graph
2009
Sales Revenue Cost of Sales
1,462.69
5,156.56
8,850.42
200.00
5,200.00
10,200.00
15,200.00
0.65 0.75 0.85
RevenuesandExpenses
Breakeven
Cost-Volume-Profit Breakeven Graph 2010
Sales Revenue Cost of Sales
2,120.60
7,774.81
13,429.0
2
200.00
5,200.00
10,200.00
15,200.00
0.65 0.75 0.85
RevenuesandExpenses
Breakeven
Cost-Volume-Profit Breakeven Graph
2011
Sales Revenue Cost of Sales
2,760.45
9,914.66
17,068.8
7
200.00
5,200.00
10,200.00
15,200.00
0.65 0.75 0.85
RevenuesandExpenses
Breakeven
Cost-Volume-Profit Breakeven Graph 2012
Sales Revenue Cost of Sales
4.4. Gross Profit
When analyzing a company gross profit is very important because it indicates how efficiency management uses
labour and supplies in the production process. Here we would see in the above chart the gross profit of the company
has increased during the year 2013 (56.4%) when compared to the year 2009 (15.6%). This clearly indicates that the
management is bringing down the cost of sales to increase gross profit. The gross profit has increased consistently
which states that the management is efficiently managing it cost of sales to increase gross profit.
4.5. Fixed Expenses
The fixed cost of the company that does not change with the increase or decrease of the product produced. Fixed
Cost (FC) of the company with some small variations remains the same all through the year from 2009 to 2013. The
result in the above chart depicts that the fixed expenses maintained at a balanced level to increase the gross profit of
the company in producing more products.
4.6. Income before Tax
The income before tax shows that how much the company has earned after the cost of goods sold, interest and
selling, general and administrative expenses have been subtracted from gross sales. From the chart it is revealed that
there is a positive trend of growth in the earnings before tax which has increased to 30.8% during the year 2013. This
symbolizes that the company is moving in right direction in making earnings before tax. This helps the investors to
compare the profitability of the company year by year. Here we would see a positive performance of the company’s
growth.
4.7. Break Even Analysis (BEA)
Chart-03. Depicts Breakeven Analysis for the Years (2009 To 2013)
8. International Journal of Economics and Financial Research, 2015, 1(2): 24-34
31
2,350.49
9,178.72
16,006.95
2,350.49 2,350.49 2,350.49
200.00
5,200.00
10,200.00
15,200.00
0.65 0.75 0.85
RevenuesandExpenses
Breakeven
Cost-Volume-Profit Breakeven Graph 2013
Sales Revenue Cost of Sales Fixed Expenses
4.8. Index Analysis (Ia)
Table-02. Index Based Profit and Loss Statement
2009 2010 2011 2012 2013
NET SALES 100 120.54 184.91 215.74 202.44
COST OF GOOD SOLD 100 116.00 180.66 209.15 202.33
GROSS PROFIT 100 133.73 197.26 234.94 202.76
FIXEDOPERATING COST 100 121.82 179.37 233.05 190.66
DEPRECIATION 100 114.40 149.89 197.75 213.42
EBIT 100 176.79 270.87 258.43 231.74
INTEREST 100 64.74 120.10 162.26 239.59
EBT 100 261.34 384.65 331.00 225.80
TAXES 100 656.36 924.11 672.08 200.54
NETINCOME 100 222.98 332.26 297.88 228.26
COMMONDIVIDEND 100 150 200 200 120
ADDITION TO RETAIN EARNINGS 100 0 0 0 0
EARNING PER SHARE 100 222.37 332.16 148.95 113.98
DIVIDEND PER SHARE 100 150 200 100 60
NUMBER OF COMMON SHARES 100 100 100 200 200
Table-02(A). Index Based Profit and Loss Statement
Change in % from 2009 to 2013 Positive / Negative
Net Sales 67.9 Positive
Gross profit 51.6 Positive
EBIT 31.0 Positive
EBT -13.5 Negative
Net Income 2.36 Positive Very low
We here observe that intelligent use of Index Based Analysis of Balance sheet and Income statement especially
combining them together can lead to a very insightful journey. Table 2(A) shows that the net sales of the company
have grown to a tune of 67.9% during the year 2013 compared to the year 2009. The gross profit of the company
has grown to 51.6% during the 2013 comparing 2009. The earnings before interest and tax (EBIT) have been
growing at 31% from the year 2009 to 2013. It is alarming to see that the company’s Earnings before tax (EBT) is in
negative, where the company has to concentrate to improve the earnings bringing down the cost of sales and increase
the sales of the products. It also revealed from the table the net income has grown only to a very low of 2.36 % from
the 2009 to 2013. It is clearly portrait that the sales of the company will not decide the profit of the company there
are other factors like Gross Profit, EBIT, EBT and NI which is to be calculated to understand the performance of the
company using Index Analysis.
9. International Journal of Economics and Financial Research, 2015, 1(2): 24-34
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Table-03. Index Based Balance Sheet
2009 2010 2011 2012 2013
CASH 100 217.32 206.52 37.46 16.04
ACCOUNTS RECEIVABLE 100 106.69 123.72 128.44 148.17
INVENTORY 100 123.18 166.08 167.72 142.56
TOTAL CURRENT ASSETS 100 119.97 150.47 147.10 140.19
CAPITAL WORK IN ROGRESS 100 59.41 37.18 55.34 53.93
INVESTMENTS 100 123.75 466.69 582.21 886.94
NET PLANT AND EQUIPMENT 100 125.02 136.32 147.88 159.11
FIXED DEPOSITS 100 28696.52 0 0 0
LOANS AND ADVANCES 100 113.26 96.04 158.91 177.99
MISCELLANEOUS EXPENSES 100 53.35 44.48 75.44 0
TOTAL ASSETS 100 117.66 134.20 150.95 165.55
ACCOUNTS PAYABLE 100 136.03 158.80 219.16 215.18
ACCRUALS 100 137.53 182.90 185.37 144.43
TOTAL CURRENT LIABILITIES 100 136.20 161.41 215.50 207.52
SECURED LOANS 100 258.90 417.93 315.51 625.29
UNSECURED LOANS 100 90.03 83.61 86.58 96.61
TOTAL LIABILTIES 100 127.37 149.95 174.20 194.75
COMMON STOCK 100 100 100 200 200
OWNER'S STOCK 100 100 100 200 200
TOTAL LIABILITIES & EQUITY 100 126.57 148.50 174.95 194.90
Table-03(A). Index Based Balance Sheet
Change in % from 2009 to
2013
Positive / Negative
Cash -92.60 Negative
Total Current Assets 16.85 Positive Very Low
Investments 616.71 Negative
Total Assets 40.70 Positive
Total Current Liabilities 52.36 Negative
Total Liabilities 52.90 Negative
Total Liabilities & Equity 53.9 Negative
Table 3 (A) shows the company analyses using index based balance sheet. The cash position at the company is
at the very bad state which is at a very high negative end value - 92.60% at end of the year 2013. The cash position
of the company is in negative trend, it should be improved by improving the current assets which is found to be very
low at 16.85 during the year 2013, but investment made by the company till the year 2013 has increased to a tower
high value of 616.71% in bringing total liabilities more than fifty percent ie.,52.90%, which indicated expenses are
increasing and the dividend payout is decreasing, where the investors would not be happy the way the company is
performing, it would further lead to loss in shareholders wealth.
Table0-4.Relationship between (AFN) and DPR/ NP/RE/CP/PT/AP/LAB
Source Correlation Statistical Inference Hypotheses
AFN *DPR -.928 Significance Accepted
AFN*NP .486 Not Significance Rejected
AFN*RE .986 Significance Accepted
AFN*CP .943 Significance Accepted
AFN*PT .429 Not Significance Rejected
AFN*AP .086 Not Significance Rejected
AFN*LAB 1.000 Significance Accepted
H1: There is a significance relationship between AFN and DPR, NP, RE, CP, PT, AP, LAB
The correlation statistics in table 04 will explain the relationship of AFN and other factors. DPR, RE, CP, LAB
has a significance relationship with AFN, so the hypotheses is accepted and states that these factors influence AFN
of the company. The dividend payout ratio which has to be paid out as dividend, the retained earnings which the
company can decide to have for investment, the plant capacity and liability all will give a metrics to plan and control
10. International Journal of Economics and Financial Research, 2015, 1(2): 24-34
33
financial of the company. The other factors NP, PR and AP has not significance relationship with AFN so we reject
the hypotheses, which states these factors does not have influence on additional fund needed for the company.
5. Conclusion
Businesses in the manufacturing sector have a greater need for planning and controlling their operations because
they have the added task of the production process, which includes managing inventory, labour, procedures and time.
Financial planning and control systems as essential tools to the economic survival of company need to be addressed
to determine whether these systems actually assist in the survival of these manufacturing enterprises. Whatever the
size, it is essential for all manufacturing enterprises to use some form of budgeting or other financial planning and
control system to effectively use resources to produce the required demand.
There is no doubt that many new businesses, including manufacturers, are developing in India. A somewhat
alarming fact, however, is that many of these new firms will not survive. One of the main reasons for this is the lack
of financial planning and control systems. The empirical study revealed that many manufacturing do some form of
financial planning, although not necessarily on a formal basis. The more formal the planning process is the longer
the firm has been operating, which would suggest that formal financial planning and control and other management
accounting systems do have an influence on the survival of the firm. However, many other factors contribute to the
survival and growth of an entity – hence the need to consider other factors. Financial planning and control constitute
a major part of every management’s decision. There is no industry that can exist without fair planning and control of
its finances. This fact underscores the need to properly plan and control the finances of a firm, especially in the
present economic conditions. Companies engage in financial planning and control to minimize expenses and
maximize profit for more effective and efficient management.
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