Factors influencing financial planning?

Factors influencing financial planning?
1.Simplicity:The financial plan should be simple.It should contain simple financial structure that can be implemented & managed simply.
2.Long-term view:The financial plan should be formulated,keeping in view the long-term requirements.This is because generally financial a plans would continue to operate for a long time after the formation of the concern.

3.Flexibility:The financial plan should have flexibility.It means it can be changed according to the changing needs of the business with minimum possible delay.

4.Foresight:The financial plan must be visualized with much foresight and it should meet the present as well as future requirements of funds.

5.Optimum use:Financial plan should provide for the optimum use of funds.Funds should be used in proper balance is maximized the wealth of the organisation.Again they should see that the proper balance is maintained between long term & short-term funds.

6.Contingences:The financial plan should make adequate provision for funds for meeting the contingencies likely to arise in the future.

7.Liquidity:There should be adequate liquidity in the financial plan.The adequate liquidity wii act as a shock absorber in the event of business operations deviation from the normal course.

8.Economy:The financial should ensure economy.It should determine optimum and proper debt-equity mix in the capital structure in order to have minimum cost of capital.

9.It should facilitate for comparison.

10.The financial plan should be conservative.

11.It should be practically implemented.

12.It should facilitate for control of outflow of funds.

13.It should facilitate for cost reduction.

14.It should consider the risk factor involved in each financial alternative.

15.The other principles of financial plan are:

a)It should be uniform

b)It should be profitable

c)It should be practical

d)It should be suitable

e)It should consider the risk factor.