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