Please do as soon possible. A senior partner in your company suggests that you p
ID: 2786176 • Letter: P
Question
Please do as soon possible.
A senior partner in your company suggests that you prepare a detailed discussion paper for new and existing businesses addressing the topics below.
QUESTION 01: Explain the importance of financial planning using tools such as budgets and forecasting. Include examples of financial plans and their use in an Airline and J Sainsbury (You can target 2 typed pages).
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QUESTION 02: J Sainsbury has four strategic priorities (full report is uploaded to Moodle). Evaluate how some of the key initiatives related to strategic priorities can be funded. Assess the information needs of different decision makers who will be involved in this financing activity. Identify the main groups of decision makers and discuss their information needs. (You can target 2 typed page)
Explanation / Answer
Ans 1. Importance of financial Planning
a. Better Decision Making: Financial Planning helps an organization to assess its present situtation, ascertain new investment avenues for further business expansion and get a clear idea about ways to achieve organization's objectives.
b. Best utilization of Funds; Financial Planning helps to make optimum utilization of funds. Financial planning gives a clear picture about application of funds. In case where financial planning is missing it leads to chaotic situation in an organization. Financial Planning is back bone of a company. A bad financial plan may lead to bankruptcy and ultimately closure of organization.
For example, Kingfisher Air in India went for liquidation because of bankruptcy.
c.Profitability: Financial planning helps to get best out of available financial resources. Getting the best out of available limited resources utlimately results in profitability through business operations.
d. Controlled Spendings: Budgeting in financial planning helps to set boundries to spend specified amount in a specific business activity. In case of imbalance spendings in business activities, some departments may suffer from shortage of funds resulting in undesirable outcome.