Reeba ict powerpoint

4. Financial planning means deciding
in advance the financial activities to
be carried on in order to achieve
the basic objectives of the firm.

5. To supply adequate funds to ensure optimum
utilisation of resources.
To minimise cost of funds.
To protect owners against the loss of control of
the business
To provide flexibilty in the plan.
To keep the financial plan simple.

6. 1.It integrates the different functions
such as production,marketing etc.
2.It helps management to eliminate
waste.
3.It ensures adequate funds from
various sources.
4.It reduces the uncertainity.

7. 5.It attempts to achieve a balance
between the inflow and outflow of
funds.
6.It serves as the basis of financial
control.
7.It helps to reduce the cost of
financing.

8. Capital Structure refers
to the mix or composition of long
term sources of funds such as
debentures,long term debt ,
preference share capital,equity
share capital and reserves and
surplus.

9. 1.Maximum return
2.Minimum risk
3. Flexibility
4.Management control
5.Solvency
6.Conservatism

10. Financial Leverage is the use of
fixed interest bearing source of funds to
enhance the return of equity shareholders.
Thus ,it is also called Trading on equity or
Capital Gearing.

11. Servicing of debts
means paying of interest charges
and principal amount of loans as
and when it is due for payment.

12. If the sales are
expected to remain fairly stable the
company can raise a higher level of
debt.
Cost of capital means the
minimum return expected by the
suppliers of capital.

13. Public utility concerns may
employ more of debt because of the
stability and regularity of their
earnings.
While making additional
issue of equity shares the control of
the existing shareholders should not
be diluted.

14. Capital Structure should
be capable of adjusting according
to the changed needs.

15. If the capital market is
in depression fixed interest bearing
securities are preferred but in boom
period equity shares can be used.

16. It is the incurred for
floating securities such as brokerage,
underwriting commission, etc on
various kinds of securities.

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