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What are the key questions financial planning must answer?

What are the key questions financial planning must answer?

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Answer #1

Definition of Financial Planning: It is the activity / task of the management personnel to determine how the entity can afford to achieve its set startegic goals. This task is usuallt done post fixation of vision and objectives of entity.

The key questions a financial planning must answer are as follows:

1. What are the assets that need to be acquired by the entity to achieve its strategic goals?

2. How much additional funds will be rquired by the ebtity to acquire those assets?

3. What is the ratio in which the entity raises funds internally and externally?

4. When should the entity go for external financing?

5. What is the best alternative to raise funds from external sources?

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