question_answer

The finance manager of Aerial Automobiles has made a detailed plan analysing the minutest financial needs of the firm in the coming six months. He also analyses the sources from where such fund requirement will be met.

(i) Name the process the finance manager is involved in.

(ii) Explain any two essential requirements of a sound financial plan.

Answer:

(i) The financial manager is involved in financial planning. (ii) Following are the two essential elements of a sound financial plan: [a] A sound financial plan should help in facilitating the collection of optimum funds. [b] It should be able to tap appropriate sources at the appropriate time. Thus, it helps-in fixing the most appropriate capital structure.