In this article we will discuss about the risk and return faced while financial planning of a company. Costing and Risk: The word 'costing' relates to the ascertainment of cost of capital from different sources like equity capital, preference capital, debentures, long-term loans etc. The most crucial decision of any company is involved in the formulation of its appropriate capital [...]
This article will help you to differentiate between Over-Capitalisation and Under-Capitalisation. 1. Over-capitalisation involves a great-strain on the financial resources of a company whereas under-capitalisation implies high rate of earnings on its shares. 2. The remedial procedure of over-capitalisation is more difficult and expensive as compared to the remedial procedure of under-capitalisation. 3. Under-capitalisation accelerates cut-throat competition amongst companies; results [...]
After reading this article you will learn about Financial Planning:- 1. Need of Financial Planning 2. Steps in Financial Planning 3. Limitations. Need of Financial Planning: According to Cohen and Robbins, financial planning should: 1. Determine the financial resources required to meet the company's operating programme; 2. Forecast the extent to which these requirements will be met by internal generation [...]