Which among the following aims at smooth operations by focusing on fund requirements and their availability in the light of financial decisions?
Which among the following aims at smooth operations by focusing on fund requirements and their availability in the light of financial decisions?
Solution
Financial planning focuses on estimating fund requirements and ensuring their availability by taking appropriate financial decisions. Its main aim is to ensure smooth operations of the business by balancing inflows and outflows of funds.
Why not the others?
Working capital decision: Manages day-to-day funds, not overall fund planning.
Capital structure: Decides the mix of debt and equity.
Budgeting: Allocates funds to specific activities after planning is done.
So, the concept that aims at smooth operations by focusing on fund requirements and availability is Financial Planning.
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