Explain the importance of having a financial plan for this company . Give an imaginary plan to support yout answer.

Explanation

Importance of financial plan for the company are :
(i) It helps to forecast what might happen in future. Thus, it prepares a company to face uncertainty.
(ii) It ensures provision of adequate funds to meet working capital requirement
(iii) It brings about a balance between inflow and outflow of funds and ensures liquidity throughout the year.
(iv) It solves the problems of shortage and surplus of funds and ensures proper and optimum untilisation of available resouces.
(v) It ensures increased profitability through cost benefit analysis and by avoiding wasteful operations.
(vi) It seeks to eliminate wastage of funds and provides better financial control .
(vii) It seeks to avail the benefits of trading on equity.
Financial plan of S Ltd
An imaginary financial plann for steel plant ( in form of antipated balance sheet )