BUSINESS FINANCE

INTRODUCTION TO FINANCIAL MANAGEMENT

(The Definition of Finance, the
Activities of the Financial Manager, and
Financial Institutions and Markets)
 Cash on hand is considered a liquid asset due
to its ability to be readily accessed.

Liquidity describes your ability to exchange an asset

for cash. The easier it is to convert an asset into cash,
the more liquid it is. And cash is generally considered
the most liquid asset. Cash in a bank account or credit
union account can be accessed quickly and easily, via
a bank transfer or an ATM withdrawal.
FINANCIAL INSTRUMENTS, INTERMEDIARIES,
MARKETS, AND INSTITUTIONS

Assets - property owned by a person or

company, regarded as having value and
available to meet debts, commitments,
or legacies.

An asset is any resource owned or controlled
by a business or an economic entity. It is
anything (tangible or intangible) that can be
used to produce positive economic value.
Assets represent value of ownership that can
be converted into cash (although cash itself is
also considered an asset).The balance sheet of
[2]
a firm records the monetary value of the
assets owned by that firm. It covers money and
other valuables belonging to an individual or to
a business.
STOCK MARKETS
Stock markets facilitate the sale and
purchase of stocks between individual
investors, institutional investors, and
companies.
• Stock markets are venues where buyers
and sellers meet to exchange equity
shares of public corporations.
• Stock markets are components of a free-
market economy because they enable
democratized access to investor trading
and exchange of capital.
• Stock markets create efficient price
discovery and efficient dealing.
• The U.S. stock market is regulated by
the Securities and Exchange
Commission (SEC) and local regulatory
bodies.
• In Philippines, we have the PSE (Phil.
Stocks Exchange)

Security is a catch-all term for stocks, bonds,

mutual funds, exchange-traded funds, or other
types of investments you can buy or sell.

The fluctuation of markets is driven by a wide range

of factors. A primary example is the economy. The
flow of money, the access to credit, and the stability
of employment play a major role in the state of
markets locally, nationally, and globally. Market
conditions can therefore refer to an overall state of
affairs or to the condition of a particular industry.

Market Conditions - conditions of

the market including the number of competitors,
competitiveness, and market’s growth during the
situation for a firm that enters the market or
introduces a new product.
THE FINANCIAL PLANNING PROCESS

Pro forma, Latin for “as a matter of form”

or “for the sake of form”, is a method of
calculating financial results using certain
projections or presumptions.
 a) Annually

b) semi-annually