A STUDY OF FINANCIAL PLANNING AND FORECASTING WITH REFERENCE TO INDIAN OIL CORPORATION LIMITED

Mr. Santhosh Kumar S, MBA, Assistant Professor, School of Management Studies

Karpagam College of Engineering

Mr. Muneeswaran R M, Student of School of Management Studies

Karpagam College of Engineering

ABSTRACT

Financial planning and forecasting is essential for large companies to manage financial decisions and to report accurate results internally and externally. Financial planning and forecasting are conducted by finance executives often led by the CFO (chief financial officer). The financial support of a corporation understands reporting requirements and establishes plans and policies to guide financial decisions regarding dividends, financing, investment and capital management. Large companies have a need to establish guidelines for financial planning and policy. The guidelines are needed because corporations are typically managing large amounts of money and have obligations to employees and stockholders to carefully manage the money that is generated within the company. These obligations require corporations to employ internal and external financial experts to develop and implement financial decisions such as financing, investment, dividends and maximizing the use of funds created. Experts have postulated a relationship between financial policy and the ability to create wealth for stockholders. There is a verified relationship between certain types of financial decisions such as research and development, debt financing, investment and dividends. Financial managers are central to corporate governance, and in addition to expertise in financial areas, these individuals must also possess a high-level sense of ethics to ensure that the decisions they make will be honest and straightforward. Financial planning is necessary because without it companies may lose money and jeopardize the survival of the organization.