Identify the statements that can be an objective of financial planning.
A. To ensure availability of funds whenever required.
B. See all the items of profit and loss
C. To see the size and composition of fixed assets of the business
D. Break up of long term financing into debt and equity
E. To see the firm does not raise resources unnecessarily
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → A and E only.
Financial planning is the preparation of a financial blueprint of an organisation’s future operations. The objective of financial planning is to ensure that enough funds are available at right time. Financial planning strives to achieve the following twin objectives-
(i) To ensure availability of funds whenever required
(ii) To see that the firm does not raise resources unnecessarily.
So, the correct answer is option 4 i.e. A & E.