This activity strives to achieve the following two objectives: (A) To ensure availability of funds (B) To ensure that firm does not raise resources unnecessarily. Identify the activity from the following:

Correct option is D

The activity that focuses on ensuring adequate availability of funds while also making sure that the firm does not raise resources beyond its requirements is known as Financial Planning.
Financial planning deals with:
· Estimating future financial requirements
· Ensuring that funds are available at the right time
· Avoiding both shortage and surplus of funds
· Maintaining financial discipline in the organisation
Objective (A) — “To ensure availability of funds” — corresponds to the planning function of predicting and arranging sufficient financial resources. Objective (B) — “To ensure that the firm does not raise resources unnecessarily” — also matches financial planning because raising excess funds leads to idle money, higher costs, and inefficiency.
Thus, the concept described aligns perfectly with Financial Planning, not with capital budgeting, financial decision-making, or working capital management.
Hence, the correct answer is (d) Financial Planning.
Information Booster
1. Financial planning helps in estimating capital requirements for fixed and working capital.
2. It avoids under-capitalization (shortage of funds) and over-capitalization (excess funds).
3. It ensures smooth functioning of operations by maintaining continuous availability of money.
4. Well-designed financial planning supports long-term strategic goals and future expansion.
5. It contributes to optimum utilisation of funds, improving overall financial efficiency.
Additional Information
· (a) Capital Budgeting – Incorrect; it deals with evaluation of long-term investment projects, not ensuring adequate or excess funds.
· (b) Financial Decision Making – Incorrect; refers to decisions related to financing, investing, and dividends, but does not focus on preventing unnecessary resource raising.
· (c) Working Capital Budgeting – Incorrect; relates to short-term assets and liabilities management, not overall fund planning.