Financial planning connects the goals a business wants to achieve in the future and the resources it will need to achieve them. It also deals with evaluating the financial resources of a company. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an Original Essay Financial management is about setting the company's goals and deciding what resources will be needed to achieve them. The main objective of financial management is to adequately account for a business's income and expenses in order to maximize the value of that business to its owners. To achieve this goal, managers must balance the following objectives: address the current financial situation, determine the financial elements of the business plan, develop budgets by estimating cash flows, prepare financial reports, interpret financial reports, maintain record systems, plan controls financial and minimize financial risks. and losses. By having a financial plan and analysis, successful businesses improve their financial situation and are less likely to fall into bankruptcy. Funds are money that a company uses to finance its operations. There are two sources of financing: internal, which includes equity and retained earnings. External, which consist of short-term loans, mainly overdrafts and bank bills, and long-term loans, such as mortgages and bonds. Leasing, which includes operating leases, and finance leasing Factoring Venture Capital Grants In managing funds, a company will use a mix of debt financing and equity financing (Heer, R). There are costs, benefits and risks associated with both types of financing. Gearing is the ratio of debt financing to equity financing. The success of the debt level will depend on the circumstances, including the economic cycle. “The accounting framework is necessary for a company to accurately record its income and expense flows” (Murphy, D). Financial reports issued by Australian companies are general reports that serve the interests of users. The two basic financial reports are: Income statement, which shows income and expenses and can be used to calculate profits. Balance sheet, which presents details of a company's assets, liabilities and net worth at a given point in time. A key element of the accounting framework is the accounting equation, which shows the relationship between the company's assets and liabilities. In this equation the amount of assets must equal the sum of total liabilities and equity. “Assets = Liabilities + Owners Equity Assets are the element of value owned by a business.” (Murphy, D.). There are two groups of assets: Current assets (short term, less than 12 months to be in cash) Non-current assets (long term, more than 12 months to be converted into cash) Equity is the property in a company. There are two main types of treasury stock, which is money invested by the owner. Share equity, which is the money invested by shareholders. Financial ratio analysis is one of the most common methods of analyzing and interpreting financial statements. The objectives of financial planning are to determine capital requirements because this will help determine the cost of fixed assets and current assets. In the capital requirement process it is necessary to evaluate long-term and short-term requirements. A company must.