Question

Financial planning usually begins with the preparation of a ______ . 

Options

• Sales forecast

• Profit forecast

• Business cycle

• None of these

Answer 1

Sales forecast

Explanation - 

The financial planning begins with determination of total capital requirement. For this the finance managers do the sales forecast and if the future prospects appear to be bright and expect increase in sale, then firm needs to increase its production capacity which means more requirement of long term funds.