Long-term financial planning focuses on:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Capital expenditure program
Option (1) Budgets — Incorrect. A budget is the financial plan for the short term, usually one year.
Option (2) Credit allowed to debtors — Incorrect. The credit given to customers is part of working capital, a short-term matter.
Option (3) Credit availed from suppliers — Incorrect. Credit from suppliers is also a short-term matter of working capital.
Option (4) Capital expenditure program — Correct. Financial planning is done for the long term and for the short term. Long-term planning relates to the firm’s long-term growth and investment, so it focuses on the capital expenditure programme: the money to be spent on fixed assets such as land, buildings and machinery.
NCERT (2026-27 Edition): “Financial Planning … This process of estimating the fund requirement of a business and specifying the sources of funds is called financial planning. Financial planning takes into consideration the growth, performance, investments and requirement of funds for a given period. Financial planning includes both short-term as well as long-term planning. Long-term planning relates to long term growth and investment. It focuses on capital expenditure programmes. Short-term planning covers short-term financial plan called budget.” |
Note: The same/similar question has been asked in different years by NTA as per the details given below:
| 2026 | 2025 | 2024 | 2023 | 2022 |
| 24-05 S2 24-05 S1 | – | – | – | – |