It is not possible to go ahead without financial plan.

Question

State with reasons, whether the following statements are True or False: 

It is not possible to go ahead without financial plan.

Answer 1

This statement is TRUE.

Reasons:

• Financial Planning is an important function of financial management. It predicts the financial requirement and arranges for the sources of required funds. It is a continuous process in day to day administration of business.
• Financial planning is not only required for profit making but even for survival of a firm. The financial plan must include information about economic environment in which the business operates. Financial planning serves as a guide for overall activities of the organization.
• The information provided in the financial plan assists in decision making of a firm. It establishes targets of sales and profits and promotes co‐ordination of resources and efforts to reach these targets. It is an advance programming of all plans of financial management.

Thus, it is not possible for finance manager to go ahead unless he prepares a sound financial plan.