Financial Planning is:
(A) Financial planning includes both short-term and long-term planning.
(B) Financial planning is a financial blueprint of an organisation’s operations.
(C) Financial planning usually begins with the preparation of a sales forecast.
(D) Financial planning takes into consideration the growth, performance, investments etc.
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → (A), (B), (C) and (D)
Financial planning means estimating how much money the business will need and deciding where it will come from. Its aim is that enough funds are available at the right time.
(A) Financial planning includes both short-term and long-term planning. — Correct. Long-term planning covers growth and capital expenditure. Short-term planning is the budget, usually for one year or less.
(B) Financial planning is a financial blueprint of an organisation’s operations. — Correct. A blueprint is a detailed plan drawn in advance. Financial planning is the blueprint of the firm’s future operations.
(C) Financial planning usually begins with the preparation of a sales forecast. — Correct. The money needed depends on how much the firm expects to sell. So the plan starts from the sales estimate.
(D) Financial planning takes into consideration the growth, performance, investments etc. — Correct. All these decide how much money will be needed and for how long.
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. Typically, financial planning is done for three to five years. For longer periods it becomes more difficult and less useful. Plans made for periods of one year or less are termed as budgets. Budgets are example of financial planning exercise in greater details. They include detailed plan of action for a period of one year or less. Financial planning usually begins with the preparation of a sales forecast. …” “Financial planning is essentially 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. If adequate funds are not available the firm will not be able to honour its commitments and carry out its plans. …” |