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Businessfinance12 q3 Mod1.1 Introduction To Financial Management
Businessfinance12 q3 Mod1.1 Introduction To Financial Management
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Borrowed materials (i.e., songs, stories, poems, pictures, photos, brand names,
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Every effort has been exerted to locate and seek permission to use these materials from their
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over them.
Team Leaders:
School Head : Reynaldo B. Visda
LRMDS Coordinator : Melbourne L. Salonga
Each SLM is composed of different parts. Each part shall guide you step-by-
step as you discover and understand the lesson prepared for you.
In addition to the material in the main text, Notes to the Teacher are also
provided to our facilitators and parents for strategies and reminders on how they can
best help you on your home-based learning.
Please use this module with care. Do not put unnecessary marks on any part
of this SLM. Use a separate sheet of paper in answering the exercises and tests. And
read the instructions carefully before performing each task.
If you have any questions in using this SLM or any difficulty in answering the
tasks in this module, do not hesitate to consult your teacher or facilitator.
Thank you.
What I Need to Know
This module is written and designed to help you understand the definition of
finance and financial management and the different individuals who are involved in
achieving the goal of the organization.
1
What I Know
A. Directions: List six (6) words related to the word financial management. Use the
web graphic organizer below. Write your answers on a separate sheet
of paper.
FINANCIAL
MANAGEMENT
B. Directions: Choose the correct answer from the given choices. Write your answers
on a separate sheet of paper.
2
6. He/She is responsible in managing the cash and credit, financial planning
and capital expenditures.
A. treasurer C. controller
B. secretary D. president
7. He/She handles tax payments, financial accounting and management
information systems.
A. treasurer C. controller
B. secretary D. president
8. It deals with determining the capital structure of the company and to raise
funds from debt and equity.
A. investing decisions C. operating decisions
B. financing decisions D. declaration of dividends
9. It deals with working capital management.
A. investing decisions C. operating decisions
B. financing decisions D. declaration of dividends
10. It deals with managing the assets of the firm.
A. investing decisions C. operating decisions
B. financing decisions D. declaration of dividends
3
Lesson
Overview of Financial
1 Management
According to Gitman and Zutter (2012), “Finance can be defined as the science
and art of managing money. At the personal level, finance is concerned with
individuals’ decisions about how much of their earnings they spend, how much they
save, and how they invest their savings. In a business context, finance involves the
same types of decisions: how firms raise money from investors, how firms invest
money in an attempt to earn a profit, and how they decide whether to reinvest profits
in the business or distribute them back to investors.”
4
What’s In
Directions: Respond to the given situation. Write your answers on a separate sheet
of paper.
Your mobile phone broke. You believe that you badly need it for your studies,
but your money is insufficient for the repair fee. Where will you get the fund needed?
_____________________________________________________________________________
_____________________________________________________________________________
Scoring Rubrics:
5 points The answer is well-written, organized and the idea is very relevant
to the question and has no grammatical or spelling errors.
4 points The answer is fairly written, and the idea is almost relevant to the
question and has one grammatical or spelling error.
3 points The answer is somewhat relevant to the questions and has two to
three grammatical or spelling errors.
2 points The answer is unclear and has four grammatical or
spelling errors.
1 point The answer does not address the question and has more than five
grammatical or spelling errors.
5
What’s New
Directions: Visualize your dream business and write your thoughts/ideas on the
given questions. Write them on a separate sheet of paper.
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
Scoring Rubrics:
5 points The answer is well-written, organized and the idea is very relevant
to the question and has no grammatical or spelling errors.
4 points The answer is fairly written, and the idea is almost relevant to the
question and has one grammatical or spelling error.
3 points The answer is somewhat relevant to the questions and has two to
three grammatical or spelling errors.
2 points The answer is unclear and has four grammatical or
spelling errors.
1 point The answer does not address the question and has more than five
grammatical or spelling errors.
Like you, businesses also have goals. To achieve them, you need the help of
experts who will perform the different tasks for the realization of the goals.
6
What is It
• The Shareholders elect the Board of Directors (BOD). Each share is equal to
one voting right. They buy shares to earn a profit in a form of dividend.
• The Board of Directors is the highest position in a corporation. Some of their
responsibilities are providing direction of the company, setting the policies on
investments, approving the company’s strategies, goals, and budgets,
appointing, and removing members of the top management.
• The President supervises the company’s operations and ensures that the
strategies are well executed and planned. He/She also performs all areas of
management such as planning, organizing, staffing, directing, controlling,
and evaluating.
• Some of the responsibilities of Vice President for Sales and Marketing are
formulating business strategies and plans, directing and coordinating sales,
making environmental scanning or research that will allow the company to
increase sales, or identifying new market opportunities, analyzing and
assessing the effectiveness and efficiency of the plans, methods and strategies
applied and establishing a good relationship with customers and distributors.
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• The Vice President for Administration is responsible for the coordination of
the different departments, providing assistance to the other department by
determining the staff needed and assisting other departments in hiring
employees and in payroll preparation.
• The Vice President for Production makes sure that the production meets
the demand, finds ways to minimize cost in producing a competitive quality
product, maximizes the utilization of the production facilities and solves
production issues.
• The Vice President for Finance makes decisions including planning,
acquiring and utilization of funds. The functions of the Finance Manager are
investing decisions, financing decisions, operating decisions, and
declaring dividends.
o Investing decisions deals with managing the assets of the firms. Some
of the examples of investment decisions are the allocation of funds,
determination of the funds that a firm can put into investment,
evaluation, and selection of capital investment proposal.
o Financing decisions includes making decisions on how to finance the
long-term investments (expansions or acquisition of new land) and
working capital which deals with the day-to-day operations of the
company (payment of rent and utilities, purchase of raw materials). The
finance manager must determine the right capital structure of the
company. Capital structure refers to how much the total asset is
financed by the debt (like loans) or equity (like stocks or bonds).
o Operating decisions deals with working capital management. Working
capital refers to short-term assets and short-term liabilities. Inventory,
receivables, cash, and short-term investments are examples of short-
term assets. Accounts payable and short-term investments are
examples of short-term liabilities. Working capital management helps
the firm to ensure that the firm has sufficient resources to finance the
day-to-day operations but, if the management is aggressive, they will
take the risk to use either long-term or short-term sources or even the
combination of the sources. (Later on, this will be discussed in
other modules.)
o Declaration of dividends refers to the determination of how much
dividends are to be distributed to the shareholders, frequency of
payments and amounts to be retained by the firm. Dividend is a
portion of profit or payment made by a corporation to its shareholders.
o There are certain conditions before a company can declare dividends:
(1) The company must have enough retained earnings (accumulated
profits) to support cash dividend declaration. (2) They must have
enough cash.
Both the treasurer and the controller report to the Vice President for Finance.
The treasurer is responsible in managing the cash and credit, financial planning and
capital expenditures. The controller handles tax payments, financial accounting and
management information systems.
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The organizational structure of the firm depends on the size and nature of the
firm. Every department in the organization needs funds to function well. Since
finance is needed in all parts of the organization, the finance manager must
communicate with other department managers to achieve the goals of the company.
9
What’s More
Directions: Answer the following questions in one (1) to two (2) sentences. Write your
answers on a separate sheet of paper.
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
3. How does the financial manager affect the firm’s overall business strategies?
_______________________________________________________________________
_______________________________________________________________________
Scoring Rubrics:
5 points The answer is well-written, organized and the idea is very relevant
to the question and has no grammatical or spelling errors.
4 points The answer is fairly written, and the idea is almost relevant to the
question and has one grammatical or spelling error.
3 points The answer is somewhat relevant to the questions and has two to
three grammatical or spelling errors.
2 points The answer is unclear and has four grammatical or
spelling errors.
1 point The answer does not address the question and has more than five
grammatical or spelling errors.
10
What I Have Learned
Directions: Answer the following questions in one (1) to two (2) sentences. Write your
answers on a separate sheet of paper.
In this lesson,
I learned that:
____________________________________________________________________________
____________________________________________________________________________
I did that:
____________________________________________________________________________
____________________________________________________________________________
I realized that:
____________________________________________________________________________
____________________________________________________________________________
Scoring Rubrics:
5 points The answer is well-written, organized and the idea is very relevant
to the question and has no grammatical or spelling errors.
4 points The answer is fairly written, and the idea is almost relevant to the
question and has one grammatical or spelling error.
3 points The answer is somewhat relevant to the questions and has two to
three grammatical or spelling errors.
2 points The answer is unclear and has four grammatical or
spelling errors.
1 point The answer does not address the question and has more than five
grammatical or spelling errors.
11
What I Can Do
Assessment
A. Directions: Write True if the statement is correct and False if the statement is
incorrect. Write your answers on a separate sheet of paper.
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B. Directions: Choose the correct letter from the box below. Write your answers on a
separate sheet of paper.
A. Shareholders D. Finance
B. President E. Financial management
C. Marketing manager F. Finance manager
Additional Activities
Directions: Answer each question in two (2) to three (3) sentences on a separate sheet
of paper.
1. Supposed that you have saved Php. 100, 000.00. How will you manage your
finances wisely?
_______________________________________________________________________
_______________________________________________________________________
Scoring Rubrics:
5 points The answer is well-written, organized and the idea is very relevant
to the question and has no grammatical or spelling errors.
4 points The answer is fairly written, and the idea is almost relevant to the
question and has one grammatical or spelling error.
3 points The answer is somewhat relevant to the questions and has two to
three grammatical or spelling errors.
2 points The answer is unclear and has four grammatical or
spelling errors.
1 point The answer does not address the question and has more than five
grammatical or spelling errors.
13
14
What I Know What’s In What’s New
A. The answer will The answer will depend The answer will depend on
depend on the student. on the student. the student.
B.
1. d
2. b
3. b
4. d
5. a
6. a
7. b
8. b
9. c
10. a
What’s More What I Have Learned What I Can Do
The answer will depend The answer will depend The answer will depend on
on the student. on the student. the student.
Assessment Additional Activities:
A. The answer will depend
1. True on the student.
2. True
3. True
4. True
5. False
6. True
7. False
8. False
9. False
10. True
B.
1. e
2. e
3. a
4. b
5. c
Answer Key
References
"Introduction To Financial Management". 2021. Lumen.
https://courses.lumenlearning.com/boundless-
business/chapter/introduction-to-financial-management/.
Cabrera, Ma. Elenita, and Gilbert Anthony Cabrera. 2017. Business Finance
Principles And Applications. Sampaloc, Manila: GIC Enterprises & Co., Inc.
Cayanan, Arthur, and Daniel Vincent Borja. 2017. Business Finance. 1st ed. Manila:
Rex Book Store.
Gitman, Lawrence, and Chad Zutter. 2012. Principles Of Managerial Finance. 13th
ed. Prentice Hall.
Teaching Guide For Senior High School Business Finance. 2016. Quezon City:
Commission on Higher Education.
Yumang, Kenneth, Chan Pao, Tyrone, and Patricia Benito. 2016. Quezon City:
Exploring Small Business And Personal Finance. The Phoenix Publishing
House Inc.
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