2.     Determination of the Form and the Proportionate Amount of Securities to be Issued: The second step in financial planning is the determination of the forms and the proportion of the various securities to be issued by the concern for raising capital.

3.     Other Steps: 

a)     Setting Financial Objectives: Setting the financial objectives in consonance with the basic goal of maximization of wealth is one of the steps involved in Financial Planning. For a blinds company who are selling vertical blinds, roman shades, faux wood shades online, the goal is to have 1 million$ business in first quarter. This is financial objectives set up by company. 

b)     Formulation of Financial Policies: The financial objectives of the firm can be achieved through financial policies. Financial policies are guides to all actions dealing with procurement, administration and distribution of funds. For term life insurance Company, they need to formulate Instant life insurance rates or life insurance quotes online in such a way that they can have better life insurance rates compare to others. It may be policy regarding management of fixed assets, current assets, policy governing the capital structure, policy regarding collection and credit, dividend policy etc.

c)     Laying down the Financial Procedures: Financial policies provide only the broad guidelines. For the proper execution of the financial policies, detailed financial procedures incorporating rules and regulations are required to be laid down. The financial procedures are very helpful to the middle level executives to know their responsibilities.

d)  Financial Forecasting: Financial Forecasting refers to the forecasting or estimating the future variability of factors. Forecasting is done in regard to output, sales, costs, profits etc.

The FTSE 100 index of leading British shares was down 36.54 points, or 0.8 percent, at 4,412.00, while Germany’s DAX fell 29.21, or 0.6 percent, to 4,754.68. France’s CAC-40 dropped 16.44 points, or 0.5 percent, at 3,283.06.

Earlier, Asian markets closed lower with Hong Kong’s Hang Seng index down for a fifth straight session, closing 406.44 points, or 2.8 percent, lower at 13,971. Japan’s market was shut for a national holiday.

“Weak data releases will continue to limit the ability of risk appetite to improve,” said Mitul Kotecha, an analyst at Calyon Credit Agricole.

Investors will this week be closely monitoring U.S. retail sales and industrial production data for December as well as other key consumer and manufacturing confidence reports.

Kotecha said he expected weakness in the data “will help place a firm cap on market sentiment whilst acting to reinforce expectations that the U.S. economy is sliding quickly downhill.”

Investors were also bracing themselves for disappointing earnings statements. Aluminum company Alcoa Corp. kicks off the fourth quarter results season later Monday, with Intel Corp. and Genentech Inc. due to report later this week.

Stock markets around the world enjoyed a relatively strong rally at the start of 2009 but that came to an abrupt halt last week amid grim economic and corporate news from the U.S., most notably the rise in the unemployment rate to a 16-year high of 7.2 percent.

U.S. markets were expected to continue their recent downtrend later. The Dow Jones industrial average fell 1.6 percent to 8,599.18 on Friday, which meant it posted its biggest point and percentage loss since the week ended Nov. 21. The Standard & Poor’s 500 index fell 2.1 percent to 890.35. more

Given that a 38 percent loss on the broad U.S. S&P 500 stock index last year was actually one of the better performances on stock markets, it is hard for some investors to imagine otherwise. Indeed, December ended on a rare up note, with global stocks putting in something of a rally.

MSCI’s main gauge of global stocks, its all-country world index, gained almost 3.6 percent for the month, its first gain since May and the sixth best performance in two years. Its generally riskier emerging market counterpart — one of the worst performers of 2008 with losses of 54.5 percent — gained 7.6 percent in December, also its first gain in seven months.

Some sentiment indicators, such as the Reuters monthly investment polls, also showed some return to risk appetite. So it would not be a major surprise if some of the most recent gains spilled over into the New Year because many investors have argued that stocks are attractively priced. Many are also expecting financial markets to return to more normal patterns during the year. I was talking with owner of Blinds Company who are selling vertical blinds and roman shades online, he says that beginning of 2009 look good for financial markets and market is going to back to normal. 

“Stocks are likely to recover in Q2/Q3 as the recession troughs in the U.S. and other major economies, earnings begin to recover, led by financials, credit markets stabilise and deflation fears ease,” John Praveen, Prudential International Investments Advisers’ chief strategist said in a note. But while few expect to experience again the kind of turmoil seen in 2008, there is little belief that any kind of new bull market is on the way. “2009 is likely to be another volatile year for stocks,” Praveen wrote. One owner of term life insurance rates providing company, he also agree with that market is going to back to normality in 2009.

Ref: Yahoo

Think about it – white bread is less expensive than whole-grain bread; fatty ground beef is cheaper than the leaner cuts; and sugared cereals are often the ones on sale, not the whole-grain varieties. By always choosing the cheapest products, you may be compromising your health.

I want to encourage you to still make nutritious foods part of your grocery list and think about other ways you can spend less, such as eating at home more often and eating out less. Here are some tips to help you save at the supermarket while still making healthy choices:

• Try to limit your trips to the supermarket to just one a week. This generally cuts down on overall grocery spending and saves you some gas money, as well.
• Make a list and try to stick to it. The only exception should be when you spot a product on sale – stock up on it and increase your overall savings.
• Buy fresh fruits and vegetables when they’re in season. Seasonal foods are where the bargains will be.
• Try to purchase locally at a farmer’s market. A win-win for you and the farmers. You could even start your own garden.
• Buy more foods in bulk. This often saves money because you’re not paying for packaging. But remember: If a food is perishable, only purchase what you can use up soon.
• Limit the snack foods and put more of your money towards healthy meals.

Even though food costs are only going to keep rising, think about your health and don’t cut so many corners that you end up shortchanging yourself on nutrition.

Ref: yahoo health

It’s time for all of us to learn a lesson from year 2008. I was reading a note from Ben Stein on yahoo. He talked very good with title lesson from a very bad year.

Efficient market theory is extremely limited as a market predictor in times like these. Efficient market theory says that at any given moment, the market price of all stocks reflects all that is known about them — the price at any given moment is the best estimate of future price.

This is true as far as it goes. And, again, in most times, it goes very far. But in times when what is not known lurks below the waterline like the bottom of an iceberg, dwarfing what lies above and can be seen, efficient market theory is not only limited in effectiveness but downright dangerous.

One of my friend Michel, who own a business of roller shades, woven wood shades and blinds business online. He is highly active in stock market. I talk with him on market theory. He says when time is bad and market reflects negative output, all market theory get failed.

It turned out that what lay waiting unknown to most of us — and to the market — was a wild miscalculation about the true liabilities associated with credit in this country. The true liability on subprime included staggering amounts of derivatives, a high multiple of subprime itself. Ditto for credit card debt, and now, as we’re seeing, ditto for commercial mortgage debt.

Not only was that debt questionable, but players had added super-sized bets so big that the markets simply couldn’t adjust to them without a serious correction.

Mr. Market Gets It Wrong

So efficient market theory is sunk. The problem is that we have nothing else to replace it except the predictions of many different analysts. Some are right and some are wrong, and they’re usually not even close to being as helpful as Mr. Market. more 

The need for financial planning arises from the following reasons:

Good financial planning:-

a)     Would ensure liquidity throughout the year.

b)     Would bring to light the surplus of funds available for expansion.

c)     Would contribute to rational utilization of the available resources to get the maximum benefit.

d)     Would make things easy for the management team to function smoothly.

Steps in Financial Planning:

A number of steps are involved in Financial Planning. They are:

1.     Estimating the Capital Requirements: It is the first step in financial planning. Requirement of the concern will be estimated on the basis of the following factors:

a)     The cost of fixed assets like land, buildings, plant and machinery, furniture and fittings, required to be acquired.

b)     The cost of intangible assets like patents, goodwill etc., to be acquired.

c)     The amount required to be invested in current assets like stock of raw materials, stores, stock of finished goods, sundry debtors, cash etc.

d)     The cost of promotion and the cost of financing i.e., the amount of expenses to be incurred on the promotion of the concern like registration fee, stamp duty, legal charges etc., and the amount of expenses to be incurred on the printing of prospectus, share application forms etc.

·         Explain the meaning of Financial Planning.

·         Explain the steps involved in Financial Planning.

·         Explain the principles of a Sound Financial Plan.

·         Explain the meaning of Capitalization, Over- Capitalization and Under-Capitalization

Introduction of Financial Plan 

At the time of formation of a company, the promoters or the persons responsible for the management of the company must estimate the total amount of funds, finance or capital the company requires, determine the sources from which the funds have to be raised and decide about the proper time at which the funds have to be obtained through proper financial planning.

Meaning of Financial Planning: 

Financial Planning is deciding in advance the course or line of action for the future in respect of the financial management of a concern. It includes: 

1. estimating the amount of finance or capital to be raised
2. determining the forms and the proportionate amount of the securities to be issued for raising the capital and
3. Laying down the policies as to the administration of the financial plan.

Need for Financial Planning:

Many technically sound and economically viable industrial projects have failed simply because of poor financial planning. Thus, it is essential tool for any business undertaking.

Finance Minister P Chidambaram told reporters in New Delhi that this move “will enthuse investors to continue to take forward their investment proposals.” “It is a welcome step and clearly shows that the interest rate regime is now on a descent curve,” HDFC Bank’s Deputy Treasurer, Ashish Parthasarathy, told PTI here.

Earlier, RBI cut the mandatory cash deposits that banks must keep with it (CRR) by 250 basis points after five years, along with other measures to inject a total of Rs 145,000 crore into the system. “It is a pro-growth measure,” IDBI Bank’s Chairman and Managing Director, Yogesh Agarwal, said.

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The gains were led by a surge in ICICI Bank and helped by rallies in overseas markets after policy makers around the world took new and drastic steps to rescue banks and prevent the global economy from sinking into recession.

However, doubts remained about the strength of the rise.

The 30-share BSE index ended up 7.64 percent, or 804.38 points, at 11,332.23, its biggest percentage rise since May 18, 2004, as it pared some of the previous week’s fall of nearly 16 percent. All but two of its components gained ground.

The 50-share NSE index rose 6.43 percent to 3,490.70.

Elsewhere in Asia, Karachi’s 100-share index edged up 0.03 percent to 9,184.24 points, while Colombo’s All-share index rose 3.06 percent, its biggest rise in six months, to 1,983.58 points. More

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