Question

Discuss the importance and weakness of annual financial statement of business in devising plans

for its future operation.​

Answer 1

Answer:

IMPORTANCE

It ensures adequate funds.

A financial plan ensures that the many aspects of your business such as marketing, labour, equipment and many others, have been allocated adequate funds so it continues to run smoothly. Your plan should also account for a set amount of emergency reserves to remedy unforeseen issues.

Financial planning helps you determine your short and long-term financial goals and create a balanced plan to meet those goals. ... Tax planning, prudent spending and careful budgeting will help you keep more of your hard earned cash. Capital: An increase in cash flow, can lead to an increase in capital.

HOPE IT HELPS YOU.

FOLLOW ME IF IT HELPED YOU.

Answer 2

Explanation:

Building a financial plan can be the most intimidating part of writing your business plan. It’s also one of the most vital. With businesses that have a full financial plan in place more prepared to pitch to investors, receive funding, and achieve long-term success.

Thankfully you don’t need an accounting degree to successfully put one together. All you need to know is the key elements and what goes into them. Read on for the six components that need to go into your financial plan and successfully launch your business.

What is a financial plan?

A financial plan is simply an overview of your current business financials and projections for growth. Think of any documents that represent your current monetary situation as a snapshot of the health of your business and the projections being your future expectations. 

Why is a financial plan important for your business?

As said before, the financial plan is a snapshot of the current state of your business. With projections, it informs your short and long-term financial goals and gives you a starting point for developing a strategy. 

It helps you, as a business owner, set realistic expectations regarding the success of your business. You’re less likely to be surprised by your current financial state and more prepared to manage a crisis or incredible growth, simply because you know your financials inside and out. 

And aside from helping you better manage your business, a thorough financial plan also makes you more attractive to investors. It makes you less of a risk and shows that you have a firm plan and track record in place to grow your business.