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Business Studies · 2023 · 3 marks
CBSE 2023 · Region 4 · Set 2 · Q24
(a) Give the meaning of 'financial planning. State any two objectives of financial planning.
(a)
Give the meaning of 'financial planning. State any two
objectives of financial planning.
OR
(b)
State how the following factors affect the working capital
requirements of a company:
(i)
Business Cycle
(ii)
Growth Prospects
(iii)
Nature of Business
Marking-scheme solution
The process of estimating the fund requirements of a business and
specifying the sources of funds is called financial planning.
OR
Financial planning is the preparation of a financial blueprint of an
organisation’s future operations.
Objectives of financial planning:
(i)
To ensure availability of funds whenever required which involves
estimation of the funds required, the time at which these funds are to be
made available and the sources of these funds.
(ii)
To see that the firm does not raise resources unnecessarily as excess
funding is almost as bad as inadequate funding. Financial planning
ensures that enough funds are available at the right time.
State how the following factors affect the working capital
requirements of a company:
(i)
Business Cycle
(ii)
Growth Prospects
(iii)
Nature of Business
(i)
Business Cycle
Different phases of business cycles affect the requirement of working
capital.
In case of boom, the sales as well as production are likely to be larger
so larger amount of working capital is required wherein the period of
depression the working capital requirement is less.
(ii)
Growth Prospects
If the growth potential of an organisation is perceived to be higher, it
will require larger amount of working capital to meet higher
production and sales levels.
(iii)
Nature of Business
Trading Concern will require small amount of working capital as
compared to a manufacturing concern.
Service Industry will require less amount of working capital as
compared to trading concern as no stocks have to be maintained.
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CBSE Class 12 Business Studies past-paper question from the 2023 board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.