A Study on Capital Management with Reference to Hindustan Aeronautics Limited, Bangalore
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2016-10-14T14:20:24Z
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Optimum use: The financial plan should provide for meeting the genuine needs of the company. The business should neither be starved of funds nor should it have unnecessary spare funds wasteful use of capital as inadequate capital. Contingencies: The financial plan should keep in view the requirement of funds for contingencies likely to arrive it does not however, mean that capital should be kept unnecessary idle for unforeseen contingencies. Promoter foresight will considerably reduce this risk. Flexibility: The financial plan should have a degree of flexibility also. Flexibility is helpful in making changes or revising the plan according to pressure of circumstances with minimum possible delay. Liquidity Liquidity is the ability of enterprise to make available the ready cash whenever required to make disbursement. Adequate liquidity in the financial plan gives it a degree of flexibility too. It could act as a shock absorber in the event of business operations deviating from normal course. Economy: The cost of raising the required capital should be minimum. It should not impose disproportionate burden on the company. This is possible by having a proper debt equity mix.
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Somashekhar C, 13vfc24103, A Study on Capital Management with Reference to Hindustan Aeronautics Limited, Bangalore