CHAPTER 1

INTRODUCTION

Financial management, goal-setting, and future financial decision-making are all made possible
with the aid of financial planning and forecasting, which is a crucial process for both
individuals and organisations. These procedures entail reviewing recent financial information,
estimating future earnings and expenses, and developing a plan for achieving financial goals.
Financial planning and forecasting are essential for achieving financial success and stability,
whether they are used for personal or commercial planning.
Financial planning is the act of evaluating one's or an organization's existing financial
condition, setting financial goals, and developing a thorough plan to accomplish those goals.
Making ensuring that financial resources are used wisely to satisfy immediate and long-term
demands while taking into account the many financial risks and uncertainties that may exist is
the main goal of financial planning.
Financial forecasting is the process of estimating future financial outcomes by analysing
historical data and current trends. It helps individuals and organizations anticipate their
financial performance, cash flow, and potential challenges or opportunities that lie ahead.
Individuals and organisations can use financial forecasting to make educated choices about
their spending plans, resource allocation, investment plans, and potential risk reduction. It also
provides a foundation for assessing the success of financial plans and making required strategy
adjustments.
The goal of this research study is to assess the "FINANCIAL PLANNING AND
FORECASTING" of the renowned electro-mechanical engineering company "Maram
Investment and Trading." One of the Sultanate of Oman's fastest-growing electromechanical
companies is called MARAM. The corporation was founded in 2021, and as of this writing, its
current goal is to keep Sultanate of Oman as a successful, diversified engineering organisation.
A business's future plans are outlined in its financial planning and forecasts.

STATEMENT OF THE PROBLEM

A crucial part of any organization's financial management is financial planning and forecasting.
It entails the process of creating a complete plan to manage financial resources, make wise
financial decisions, and forecast future financial performance using data from the past and
assumptions. Keeping the company's finances stable, expanding, and profitable while reducing
risks is the aim of financial planning and forecasting.
 SCOPE OF THE STUDY
A well-conducted study can offer insightful information for better decision-making and
performance improvement. Financial planning and forecasting are essential components of a
company's success. The goals and reasons of both financial planning and forecasting are
explained, along with the definition of financial planning and its significance for personal or
business finances.

OBJECTIVES OF THE STUDY

 The primary goal of the study is to comprehend the company's financial situation.

 This refers to the creation of long-term strategic financial plans that direct the creation of short-
term operating plans and budgets, with a particular emphasis on the analysis of pro forma
financial statements and the creation of a cash budget.

RESEARCH METHADOLOGY
The research challenge can be approached methodically using research methodology. In this
article, we examine the numerous processes that researchers typically take to analyse their own
research in order to understand not just the methodology but also the various research
methodologies and approaches.
Additionally, researchers need to be aware of the underlying presumptions and the standards by
which they can determine which methods and techniques are appropriate for a given set of
issues and which ones are not. All of this indicates that the researcher must develop his
methods for his difficulties because they may differ from one another.

CHAPTERISATION
CHAPTER 1: Introduction
This chapter includes introduction to study, statement of the problem, scope of the study,
objectives of the study, Chapterisation, limitations of the study.

CHAPTER 2: Review of literature

This chapter includes definition of the problem, previous studies and theoretical background of
the study.

CHAPTER 3: Industry profile and Company profile

This chapter contains industry profile and company profile of the specified company.

CHAPTER 4: Data analysis and interpretation

CHAPTER 5: Findings, Recommendations & Conclusion
 LIMIITATIONS OF THE STUDY
 A Costly Interaction.

 Arranging is really the top interaction so it is very tedious and reserves consuming

 Restricted Accessibility of Information

 Absence of Correspondence
 CHAPTER 2

REVIEW OF LITERATURE

Lancaster G.A. & Lomas R.A., 1985

Forecasting is supposed to be one of the oldest management activities. In biblical times there
were frequent allusions to clairvoyants and prophets. Nowadays it is becoming increasingly
necessary for companies to make forecasts; those that do not give the prospect to their
competitors a clear advantage. No forecasting is a main cause of most of today’s business
failures. In the past, goods could be sold on company reputation alone and forecasting was not
too important. In today’s more competitive times, sentiment does not apply, and firms that do
not challenge their selves to make an accurate forecast on which to base their future production
will find it increasingly difficult to survive.

Waters, 2003

Forecasting is important for many aspects of the modern business. Organisations make plans
which become effective at some point in the future so they need information about prevailing
circumstances (Waters, 2003). This information must be forecast; but unfortunately forecasting
is a difficult situation and despite its importance, progress in many areas has been limited.

Golden J., 1994

“Forecasting is predicting, projecting, or estimating some future event or condition which is

outside an organization’s control and provides a basis for managerial planning.

Waddell D., 1994

“Forecasting is generally used to predict or describe what will happen (for example to sales
demand, cash flow, or employment levels) given a set of circumstances or assumptions”

Mentzer J.T. & Moon M.A., 2005

“Forecasting is a projection into the future of expected demand, given a stated set of
environmental conditions”
Makridakis and Wheelwright, 1989

The importance of forecasting is finding in a great range of planning and decision making
circumstances. It is essential to mention those perspectives that forecasting can become a useful
tool for management in many departments of an organization. In marketing, a great amount of
decisions can be improved significantly by connect them with dependable forecasts of market
size and market characteristics. Having this in mind for example, a company that produces and
sells electrical devices should be able to forecast what the demand will be for each of its
products by geographic region and type of consumer.

Makridakis and Wheelwright, 1989

In production an essential need of forecasting is the area of product demand. This relates with
the both prediction of volumes mix so as the organization can plan its production schedule and
organize appropriate its inventories. Another area that the recent years have linked a lot with
forecasting is finance and accounting. These departments must forecast cash flows and the rates
at which various expenses and revenues will occur “if they are to maintain company liquidity
and operating efficiency.

Dalrymple, 1975

Due to the nowadays difficult economic conditions that the whole business markets face up the
importance of forecasting has become more imperative than ever. Marketing practitioners
regard forecasting as an important part of their jobs. For example, in 93% of the companies
sampled pointed out that sales forecasting was ‘one of the most critical’ aspects, or a ‘very
important’ aspect of their company’s success.

Jobber, Hooley and Sanderson, 1985

In a survey of 353 marketing directors from British textile firms, found that sales forecasting
was the most common of nine activities on which they reported Moreover Dalrymple (1987), in
a survey among 134 US companies, found that 99% prepared formal forecasts when they
developed written marketing plans.

Winklhofer, 1996

He notes some basic factors that the importance of forecasting has become widely essential for
the organizations in recent years, the increasing complexity of organizations and their
environments led to difficulties for decision makers to take account of all the factors relating to
the future growth of the organization into account. Organizations have moved towards more
systematic decision making that contains explicit justifications for individual actions, and
formalized forecasting is one way that these actions can be maintained. The development of the
forecasting methods has enables not only forecasting experts but also managers to become
familiar with these techniques.

Eisenhardt, 1989

Agency theory is coordinated at the pervasive agency relationship, in which one gathering (the
principal) delegates work to another (the agent), who plays out that work. Agency theory is
worried about settling two problems that can happen in agency relationships. The first is the
agency problem that emerges when (a) the wants or goals of the principal and agent strife and
(b) it is troublesome or expensive for the rule to check what the agent is really doing. The
problem here is that the principal can't confirm that the agent has carried on suitably. The
second is the problem of risk sharing that emerges when the principal and agent have
distinctive frames of mind towards risk. The problem here is that the standard and the agent
may lean toward various activities in light of the diverse risk inclinations.

Markowitz, 1952
Modern portfolio theory is a theory of fund that endeavours to boost portfolio expected return
for a given measure of portfolio risk, or identically limit risk for a given dimension of
anticipated return, via cautiously picking the extents of different assets. Modern portfolio
theory affirms that organizations pick ventures dependent on limited future expected returns
and that for greatest risk balanced returns firms ought to differentiate crosswise over enterprises
and resource classes. It was essentially a procedure for delivering balanced portfolios. On the
business front it has helped financial chiefs to think of a balance portfolio of ventures through
the financial planning procedure of verifying and utilizing capital assets on assets that will
produce ideal returns

Kraus and Lichtenberger, 1973

Exchange off Theory The exchange off theory of capital structure alludes to the possibility that
a company picks how much obligation money and how much equity fund to use by adjusting
the costs and advantages. The traditional rendition of the speculation returns to (Kraus and
Lichtenberger, 1973) who considered a balance between the dead-weight costs of bankruptcy
and the expense sparing advantages of obligation.

Miller, 1977
Regularly agency costs are additionally incorporated into the balance. A critical motivation
behind the theory is to clarify the way that enterprises for the most part are financed somewhat
with obligation and incompletely with equity. It expresses that there is an advantage to
financing with obligation, the tax reductions of obligation and there is an expense of financing
with obligation, the costs of financial misery including bankruptcy costs of obligation and non-
bankruptcy costs (for example staff leaving, providers requesting disadvantageous payment
terms, bondholder/investor infighting, and so forth.). The negligible advantage of further
increments owing debtors decays as obligation increments, while the peripheral cost
increments, so a firm that is streamlining its general esteem will concentrate on this exchange
off while picking how much obligation and equity to use for financing.

Pandey, 1985
Financial planning is a method for amassing the assets important to start another movement. It
gives the premise to proceed with task and outfitting extra capital, taking care of the costs of
activity and by and large synchronizing the different components of a going business.
Fundamental these two capacities is the definition of approach, which gives an ability to read a
compass and real arrangement of activity. Organization of these capacities is imperative for a
wide range of business units, particularly in private endeavours where little and medium scale
speculations are a lot higher. It is important to sort out the financial planning capacity in such a
way that should help the business in accomplishing its essential targets with least costs

Beith and Goldreich, 2000

Exhaustive financial planning is required to screen financial ability after some time so as to
most beneficially work the organization. Proprietors try to expand benefits paying little respect
to the duty status of the organization not for benefit or financial specialist claimed. While
organizations that don't create an arrival on assets in overabundance of their expense of capital
are in risk of financial disappointment various regions of financial execution are regularly used
to screen resource efficiency One overwhelming screen of financial execution is return on
capital utilized (ROCE) which is likewise broadly utilized in different enterprises

Hogsett, 1981
Numerous vast organizations are utilizing the new or contemporary financial planning and
control frameworks. Some independent venture administrators are likewise searching for data
on the most recent administration frameworks since they understand that they have to build up
their abilities and instruct themselves. Private companies that work in questionable and focused
situations need to plan and control their activities since this will support proprietors/supervisors
to maintain their businesses effectively. Capital force, the measure of capital required for
activities was contrarily identified with financial execution as most organizations in beginning
periods of advancement required more noteworthy capital before getting to be built up, and less
once they turned into a develop substance.
Langabeer, 1998
Simulation was viewed as a method for depicting vulnerability anticipating a superior
perspective of potential results. It demonstrated that simulation examination has application in
planning, forecasting, and different regions of financial displaying, and ought to be a piece of a
far reaching procedure of financial planning

Lopez, 2006
One region that has gotten little consideration in the foundation of strategies, particularly in the
investigation of miniaturized scale, little and medium-sized endeavours, is that of financial
choices, despite the fact that it is a determinant of business intensity. Financial examination and
planning, which speak to fundamental highlights that help organizational technique, are in any
case for all intents and purposes non-existent in miniaturized scale and little ventures, which
force a requirement on the sort of financial choices businesspeople, can take. Financial
technique speaks to a way to accomplish and keep up business intensity and position a
company as a world class organization. Financial strategies are goals, examples or options
intended to enhance and enhance financial management so as to accomplish corporate
outcomes

Sarason, 2003
An investigation on the design theory and company's asset based view to comprehend the
relationship between strategic financial planning and the company's execution. Their
discoveries additionally give fractional help to a positive relationship between strategic
financial planning and forecasting. Be that as it may, they inferred that this relationship is
directed by organizational phase of advancement and that it is helpful to beginning time firms.
The fundamental reason for these ends depend on the advancement upper hands given by the
structure and the future reasoning incorporated into the strategic procedure and the non-
manageability and disintegration of these advantages in late stage firms, whose forms are
progressively inclined to impersonation