| Finance in relation to business is concerned | | | | opportunities available to a firm and |
| with the task of providing funds needed by | | | | selecting the best one from the available |
| the enterprise in terms that are most | | | | options.The planning requires a long-term |
| favorable in the light of its objectives. The | | | | estimate of profits which in turn involves a |
| finance function of a business is concerned | | | | projection of sales and costs of operation |
| with procurement of funds and its effective | | | | for a period of years. Accordingly, long |
| utilization in business. It covers financial | | | | range financial planning becomes essential |
| planning, forecasting of cash receipts and | | | | for a company that wishes to grow. The |
| disbursements, realizing of funds, using and | | | | company has to establish objectives and goals |
| allocation of funds and financial control. | | | | as part of a master plan for long range |
| Financial planning helps in defining | | | | survival and growth. Coordinated thinking |
| financial goals, setting objectives and | | | | forms the basis of financial planning for |
| developing a plan to achieve them. Planning | | | | making an optimum utilization of funds, |
| is not master-minding the future, and any | | | | particularly of cash balances.Unneeded cash |
| attempt to do so is foolishness. Human beings | | | | can be invested in income-producing |
| can neither predict nor control the future. | | | | securities. Financial planning is used as a |
| For this reason, management has to clarify | | | | control device to fix standards of |
| their objectives and determine what actions | | | | performance and evaluation of the results. It |
| must be taken, when, by whom, and at what | | | | is used to pre-test the financial feasibility |
| cost to achieve the cherished goals. | | | | of various programs and in that sense it is |
| Financial planning is the process of | | | | of crucial importance because action once |
| evaluating different investing and financing | | | | taken becomes difficult to retract. |