Long Answer TypeWhat is meant by 'Formal Organisation'? State any five advantages of this form of organisation.
Short Answer Type'In to-day's commercial world, the Stock-Exchange performs many vital functions which leads the investors towards positive environment.' Explain how by giving any four reasons.
Long Answer Type'Determining the relative proportion of various types of funds depends upon various factors.' Explain any five such factors.
A sound financial planning is an important part of the success of any business enterprise. It aims at enabling the company to tackle the uncertainty in respect of the availability and timing of the funds and helps in smooth functioning of an organisation.
The importance of financial planning are:
(i) It helps in forecasting what may happen in future under different business situations. By doing so, it helps the firms to face the eventual situation in a better way. By preparing a blueprint of these three situations the management may decide what must be done different situations.
(ii) It helps in avoiding business shocks and surprises and helps the company in preparing for the future.
(iii) If helps in coordinating various business functions, e.g, sales and production functions, by providing clear policies and procedures.
(iv) Detailed plans of action prepared under financial planning reduce waste, duplication of efforts, and gaps in planning.
(v) It tries to link the present with the future.
(vi) It provides a link between investment and financing decisions on a continuous basis.
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