Financial plan is a statement estimating the amount of capital and determining its composition. The quantum of funds needed, will depend upon the assets requirements of the business. The time at which funds will be needed should be carefully decided so that finances are raised at a time when these are needed.

The next aspect of a financial plan is to determine the pattern of financing. There are a number of ways for raising funds. The selection of various securities should be done carefully. The funds may be raised by issuing of capital and debentures, raising of loans etc. Once a pattern of financing is selected then it becomes very difficult to modify it. A financial plan also spells out the policies to be pursued for the floatation of various corporate securities, particularly regarding the time of their floatation.

A financial plan should be carefully determined. It has long-term impact on the working of the enterprise. It should ensure sufficient funds for genuine needs. Neither the plans should suffer due to shortage of funds nor there should be wasteful use of them. The funds should be put to their optimum use. The main objectives of financial plan are as follows: