question_answer

To avoid the problem of shortage and surplus of funds what is required in financial management. Name the concept and explain any four points of its importance.

Answer:

Financial planning is required to avoid the problem of shortage and surplus. It is important because: (i) It tries to link the present with the future. (ii) It helps in avoiding business shocks and surprises. (iii) It helps in coordinating various business functions. (iv) It helps in forecasting what may happen in future under different business situations.