SENIOR HIGH SCHOOL

BUSINESS FINANCE
Quarter 3 – Module 4:
Financial Planning Tools and
Concepts
Business Finance – Grade 12
Alternative Delivery Mode
Quarter 3 – Module 4: Financial Planning Tools and Concepts
First Edition, 2021

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Published by the Department of Education

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Development Team of the Module

Writer: Louell E. Bodios, Maricris C. Cancino and Mara Ellyn H. Lacson
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 SENIOR HIGH SCHOOL

BUSINESS FINANCE
Quarter 3 – Module 4:
Financial Planning Tools and
Concepts
Introductory Message
For the facilitator:

Welcome to the Business Finance Alternative Delivery Mode (ADM) Module on Financial
Planning Tools and Concepts!

This module was collaboratively designed, developed and reviewed by educators both from
public institutions to assist you, the teacher or facilitator in helping the learners meet the
standards set by the K to 12 Curriculum while overcoming their personal, social, and economic
constraints in schooling.

This learning resource hopes to engage the learners into guided and independent learning
activities at their own pace and time. Furthermore, this also aims to help learners acquire the
needed 21st century skills while taking into consideration their needs and circumstances.

In addition to the material in the main text, you will also see this box in the body of the module:

Notes to the Teacher

This contains helpful tips or strategies that will
help you in guiding the learners.

As a facilitator, you are expected to orient the learners on how to use this module. You also
need to keep track of the learners' progress while allowing them to manage their own learning.
Furthermore, you are expected to encourage and assist the learners as they do the tasks
included in the module.
For the learner:

Welcome to the Business Finance Alternative Delivery Mode (ADM) Module on Financial
Planning Tools and Concepts!

This module was designed to provide you with fun and meaningful opportunities for guided
and independent learning at your own pace and time. You will be enabled to process the
contents of the learning resource while being an active learner.

This module has the following parts and corresponding icons:

This will give you an idea of the skills or

What I Need to Know
competencies you are expected to learn in the
module.
This part includes an activity that aims to check
What I Know what you already know about the lesson to take. If
you get all the answers correct (100%), you may
decide to skip this module.
This is a brief drill or review to help you link the
What’s In
current lesson with the previous one.

In this portion, the new lesson will be introduced to

What’s New
you in various ways; a story, a song, a poem, a
problem opener, an activity or a situation.
This section provides a brief discussion of the
What Is It
lesson. This aims to help you discover and
understand new concepts and skills.
This comprises activities for independent practice
What’s More to solidify your understanding and skills of the
topic. You may check the answers to the exercises
using the Answer Key at the end of the module.
This includes questions or blank
What I Have Learned
sentence/paragraph to be filled in to process what
you learned from the lesson.
This section provides an activity which will help
What Can I Do
you transfer your new knowledge or skill into real
life situations or concerns.
This is a task which aims to evaluate your level of
Assessment
mastery in achieving the learning competency.

In this portion, another activity will be given to you

Additional Activities
to enrich your knowledge or skill of the lesson
learned.

Answer Key This contains answers to all activities in the

module.
At the end of this module you will also find:

References This is a list of all sources used in developing this

module.

The following are some reminders in using this module:

1. Use the module with care. Do not put unnecessary mark/s on any part of the module.
Use a separate sheet of paper in performing the exercises.
2. Don’t forget to answer What I Know before moving on to the other activities included
in the module.
3. Read the instruction carefully before doing each task.
4. Observe honesty and integrity in doing the tasks and checking your answers.
5. Finish the task at hand before proceeding to the next.
6. Return this module to your teacher/facilitator once you are through with it.
If you encounter any difficulty in answering the tasks in this module, do not hesitate to
consult your teacher or facilitator. Always bear in mind that you are not alone.
We hope that through this material, you will experience meaningful learning and gain deep
understanding of the relevant competencies. You can do it!
 What I Need to Know

This module was designed and written with you in mind. It is here to help you to go through
with the steps in financial planning process. The scope of this module permits it to be used in
many different learning situations. The language used recognizes the diverse vocabulary level
of students. The lessons are arranged to follow the standard sequence of the course. But the
order in which you read them can be changed to correspond with the textbook you are now
using.

The module has only one lesson, namely:

• Lesson 1 – Identifying the steps in the financial planning process
• Lesson 2 – Illustrating the formula and format for the preparation of budgets and
projected financial statement.

After going through this module, you are expected to:

1. identify the steps in the financial planning process. (ABM_BF12-IIIc-d-10)
2. illustrate the formula and format for the preparation of budgets and projected financial
statement (ABM_BF12-IIIc-d-11)
 What I Know

The following multiple-choice items are for you to answer. Choose the letter of the correct
answer and write your answers in your answer sheet.

1. Which does financial planning end?

a. preparation of pro-forma financial statements
b. preparation of actual financial statements
c. comparison of actual parameters with projections
d. ensuring compliance of actual parameters with projections

2. What does strategy of a firm involve?

I. Preparation of financial statements
II. Preparation of pro-forma financial statements
III. Matching of strengths and competencies of the firm with market opportunities.
a. I only c. III only
b. II only. d. I and II
3. Financial Planning deals with
I. Preparation of Financial Statements
II. Planning for a Capital Issue
III. Preparing Budgets
a. I only c. III only
b. II only d. I, II, III

4. A contingency plan is use except when?

a. Finding alternative actions c. Confirmation of actions
b. Replacement of Plan d. Proceeding to the next option

5. During the Information Gathering & Goal Setting step in the financial planning
process, the Financial Planner.
a. Reviews Assets, Liabilities, Current and Projected Income, Insurance Coverage
and Investments
b. Recommends short- and long-term investment strategies
c. Gathers Quantitative and Qualitative information
d. Defining company’s Vision and Mission Statement

6. Which of the following corporate plans is considered a short-term plan?

a. To be the leading service provider of face masks in the Philippines.
b. Renew permits and licenses to the Securities and Exchange Commission.
c. Increase sales by 20% annually.
d. Procure new property, plant and equipment to increase production

7. Mara, the head of the marketing department, assigned her people to specific
committees needed in the launching of the online selling website of the company.
What planning process did she perform?
a. Setting of goals c. Identifying goal-related tasks
b. Determining contingency plan. d. Identifying resources.

8. Who is NOT involved in the short-term planning?

a. Board of Directors c. Head of Finance
b. Secretary to the President d. All of the above
 9. Which is TRUE about long-term planning?
a. It involves both higher and lower level management.
b. It focuses on the daily function of the company.
c. It is less detailed.
d. It involves mostly from the top management.

10. The following are the first steps in preparing a financial plan is except;
A. Identifying Company’s mission
B. Knowing where the business will be
C. Making objective for day to day operations
D. Seizing actual plans for assumptions made

Lesson
Identifying the Steps in the
1 Financial Planning Process.

This module will help you will learn the steps in financial planning process. It aims to
understand and apply basic steps in financial planning. So, ready your working space and
counters to make this lesson more meaningful.

What’s In

Supposed you are a worker and has a minimum wage of 395/day. Prepare a daily budget
planner for a week that includes your primary needs and wants.

Daily Budget Planner

Income
Details Amount

Total

Food/Drinks
Details Amount

Total
 What’s New

You are going to make a collage of your dream either a thing, place and situation where you
likely want.
THINGS I REALLY WANT.

1. What are the things you really want?

2. Is it your short-term or a long-term goal?
3. How can you achieve it your short-term goals? and long-term goals?
4. Can it sustain your income? How are you going to plan out your budget to cater those
wants?

What Is It
?

To fully understand the steps in financial planning process, read and understand carefully
the concepts that will be presented to you.
FINANCE PLANNING PROCESS

Based on the activity that you have previously performed, you were able to identify your dream
job, a house, car or a place you want to travel and many things you wish to have. You also
classify them if it belongs to your short-term or long-term goals. You are to decide if your
income would be enough to prioritize those wants. If yes, then little by little you aim to achieve
those goal. If not, then you find another time or options how you are going to deal it. Your
action of doing a situation in order to reach something involves planning, it gives a roadmap
to where you are going and how are you going to reach it. Thus, it entails planning.

Planning is an important aspect of the firm’s operations because it provides road maps for
guiding, coordinating, and controlling the firm’s actions to achieve its objectives (Gitman &
Zutter, 2012). Planning is very much related to another management function, controlling.
These two management function functions reinforce each other, and both are very important
for the success of an organization.

Management planning is about setting the goals of the organization and identifying ways on
how to achieve them (Borja& Cayanan, 2015). This may be broken down into long-term plans
and short-term plans.

Thus, financial planning starts with long term plans which would then translate to short term
plans. There are two phases of financial planning.

1. Long-term financial plans - These are a set of goals that lay out the overall direction of the
company. It is an integrated strategy that takes into account various departments such as
sales, production, marketing, and operations for the purpose of guiding these departments
towards strategic goals. Those long-term plans consider proposed outlays for fixed assets,
research and development activities, marketing and product development actions, capital
structure, and major sources of financing. Also included would be termination of existing
projects, product lines, or lines of business; repayment or retirement of outstanding debts; and
any planned acquisitions (Gitman & Zutter, 2012).

2. Short-term financial plans - Specify short-term financial actions and the anticipated impact
of those actions. Part of short-term financial plans include setting the sales forecast and other
forms of operating and financial data. This would then translate into operating budgets, the
cash budget, and pro forma financial statements (Gitman & Zutter, 2012).

Table 1: Comparison of Short-Term and Long-Term Planning (Gitman & Zutter, 2012)

Long-Term Planning Short-Term Planning

Top management is still involved but there
is more participation from lower level
managers (production, marketing
More participation from
Persons Involved personnel, finance and plant facilities)
top management
because their inputs are crucial at this
stage since they are the ones who
implement these plans
Time Period 2-10 years 1 year or less
Level of Detail Less More
Focus Direction of the company Everyday functioning of the company
Looking back to the goals you set, on our previous activity, those goals that can be achieved
in more than 5 years like landing a stable job, building your dream house and the likes are
considered as long-term goals. Otherwise, goals that are specific and takes a shorter time to
achieve are categorized as short-term.

In business, setting of long-term plans provides a clear picture on what the company is trying
to establish in the long run. Through that, the company formulates specific objectives and
goals to perform in order to achieve the long-term plan. And as the manager of the company,
it is your role to implement and control the resources of the company so that the plans will be
achieved in the most efficient way.

Steps in Financial Planning Process

1. Set goals or objectives.

For the activity done, the objective was to increase awareness of (chosen issue). For
corporations, long term and short-term objectives are usually identified. These can be
seen in the company’s vision and mission statements. The vision statement states
where the company wants to be while the mission statement states the plans on how
to achieve the vision.

Examples of a company’s Vision-Mission statements are as follows:

• Jollibee Foods Corporation (JFC)
Vision: To excel in providing great tasting food that meets local preferences
better than anyone; To become one of the three largest and most profitable
restaurant companies in the world by 2020.
Mission: To serve great tasting food, bringing the joy of eating to everyone.
• McDonalds Philippines
Vision: First to respond to the fast-changing needs of the Filipino family; First
choice when it comes to food and dining experience; First mention as the ideal
employer and socially responsible company; First to respond to the changing
lifestyle of the Filipino family
Mission: To serve the Filipino community by providing great-tasting food and
the most relevant customer delight experience.

2. Identify Resources.
3. Identify goal-related tasks.
4. Establish responsibility centers for accountability and timeline.
5. Establish the evaluation system for monitoring and controlling. For
corporations, the management must establish a mechanism which will allow plans to
be monitored. This can be done through quantified plans such as budgets and
projected financial statements. The management will then compare the actual results
to the planned budgets and projected financial statements. Any deviations from the
budgets should be investigated.
6. Determine contingency plans. In planning, contingencies must be considered as
well. Budgets and projected financial statements are anchored on assumptions. If
these assumptions do not become realities, management must have alternative plans
to minimize the adverse effects on the company (Borja & Cayanan, 2015).
 What’s More

List down the steps in Financial Planning Process. Write your answer on your answer sheet.

STEP 6

STEP 5

STEP 4

STEP 3

STEP 2

STEP 1

What I Have Learned

Planning is an important aspect of the firm’s operations because it provides road maps for
guiding, coordinating, and controlling the firm’s actions to achieve its objectives (Gitman &
Zutter, 2012).
Management planning is about setting the goals of the organization and identifying ways on
how to achieve them (Borja& Cayanan, 2015).
Phases of Financial Planning
Long-term financial plans - These are a set of goals that lay out the overall direction of the
company.
Short-term financial plans - Specify short-term financial actions and the anticipated impact of
those actions.
Steps in Financial Planning Process
1. Set goals or objectives.
2. Identify resources.
3. Identify goal-related tasks.
4. Establish responsibility centers for accountability and timeline.
5. Establish the evaluation system for monitoring and controlling.
6. Determine contingency plan.

What Can I Do

Direction: Identify what step in financial planning process a given statement belongs. Write
the letter only.

A. Set goals or objectives.

B. Identify Resources
C. Identify goal-related tasks
D. Establish responsibility centers for accountability and timeline.
E. Establish the evaluation system for monitoring and controlling
F. Determine contingency plans

1. Human Resources
2. Preparing a Budgets and Projected financial statements anchored on assumptions
for alternative plans.
3. To raise the level of competitiveness of the economy for sustainable growth.
4. Achieving 15% increase in sales in responsibility of the head of sales.
5. Financial
6. Done through quantified plans such as budget and projected financial statements.
7. To promote and maintain the highest standards of service and corporate governance
among its customer constituencies.
8. To hire more sales agents to increase 15% increase in sales and Providing training
that will improve the skills of sales agents.
9. The production department must ensure that there are enough units to sell and are in
good quality.
10. To provide customers with the best tasting, most nutritious choices in a wide range of
food and beverage categories and eating occasions, from morning to night.
 Assessment

I. The following multiple-choice items are for you to answer. Choose the letter of the
correct answer and write your answers in your answer sheet.

1. Which does financial planning end?

a. preparation of pro-forma financial statements
b. preparation of actual financial statements
c. comparison of actual parameters with projections
d. ensuring compliance of actual parameters with projections

2. What does strategy of a firm involve?

I. Preparation of financial statements
II. Preparation of pro-forma financial statements
III. Matching of strengths and competencies of the firm with market opportunities.
a. I only c. III only
b. II only d. I and II

3. Financial Planning deals with

I. Preparation of Financial Statements
II. Planning for a Capital Issue
III. Preparing Budgets
a. I only c. III only
b. II only d. I, II, III

4. A contingency plan is use except when?

a. Finding alternative actions c. Confirmation of actions
b. Replacement of Plan d. Proceeding to the next option

5. During the Information Gathering & Goal Setting step in the financial planning
process, the Financial Planner.
e. Reviews Assets, Liabilities, Current and Projected Income, Insurance Coverage
and Investments
f. Recommends short- and long-term investment strategies
g. Gathers Quantitative and Qualitative information
h. Defining company’s Vision and Mission Statement

6. Which of the following corporate plans is considered a short-term plan?

a. To be the leading service provider of face masks in the Philippines.
b. Renew permits and licenses to the Securities and Exchange Commission.
c. Increase sales by 20% annually.
d. Procure new property, plant and equipment to increase production

7. Mara, the head of the marketing department, assigned her people to specific
committees needed in the launching of the online selling website of the company.
What planning process did she perform?
a. Setting of goals c. Identifying goal-related tasks
b. Determining contingency plan. d. Identifying resources.
 8. Who is NOT involved in the short-term planning?
a. Board of Directors c. Head of Finance
b. Secretary to the President d. All of the above

9. Which is TRUE about long-term planning?

a. It involves both higher and lower level management.
b. It focuses on the daily function of the company.
c. It is less detailed.
d. It involves mostly from the top management.

10. The following are the first steps in preparing a financial plan is except;
A. Identifying Company’s mission
B. Knowing where the business will be
C. Making objective for day to day operations
D. Seizing actual plans for assumptions made

Additional Activities

Event Planning Activity

You are going to be an Event Organizer and Plan Out an event about the following:

• Proper Waste Segregation

• Anti-Smoking Campaign
• Barangay or Community Cleaning
• Dengue Prevention
• Community Image Improvement
• COVID Awareness
The budgetary requirement: PHP 300,000.00
A. Description of the Activity
This is a simulation of conducting a campaign event beginning from inception (planning
stage).

This will involve the facilitator role playing as provider of the goods and services
needed, and the you as the event coordinator and performers will be hired for the event

B. Objectives/Tasks
• Organize an event given the limited time and resources
• Perform the functions of planning and implementing plans under a controlled set
up.
• Evaluate result of event based on a predetermined criterion (see Annex for Grading
Rubrics)
 C. Materials

Item Quantity Price in PHP

Cartolina (or 1/4 manila paper) 8 (or 4) 50,000/piece
Bond Papers 5 10,000/piece
Colored Papers (or art paper) 10 5,000/piece
Tape 5 8,000/roll
Glue /Paste 5 3,000/bottle
Pencils 15 5,000/piece
Markers 20 10,000/piece
Pens 12 7,000/piece
Crayons 20 5,000/stick

D. Mechanics
You will act the following roles:
-Supplier of materials/paraphernalia to be used in the campaign.
-Proprietor of the venues where the event will be held.
-Talent manager of the special guest

Note: All of the following should be present during the event proper:
• Event title and campaign slogan (Example: Existence: Cut the Greed, Not the Green,
a benefit concert to save endangered forests, featuring a performance from the XX
group of dancers)
• Campaign paraphernalia (posters/brochures) containing the following:
‣ Title of the event
‣ Date and time
‣ Campaign slogan
‣ Vision Statement (Example: To save the endangered Philippine Forest)
‣ Mission Statement (Example: To increase awareness of deforestation by organizing
events that emphasize on tree planting)

E. Assign the following positions to specific persons:

Position Description Short Term Planning

Budgeting Team • Responsible for the • Record of goods
allocation of the and services
given budget to purchase
purchase the • Documentation of
necessary materials timeline of activities
to make the event done during the
possible. They will planning and
also negotiate with execution stage.
the facilitator
regarding prices of
the required
materials.
Production Team • Responsible for • Song/dance
organizing the number
performances to be incorporated in the
presented during campaign. May be
the event. This done in between
includes role song/dance.
 playing as the • Not all need to
celebrities who will present. Some may
perform in the just choreograph.
campaign event.
Marketing Team • Responsible for the • Persuasive
presentation that informative speech
would persuade the incorporated in the
audience to join the campaign. May be
campaign initiative. done in between
• Tip: Emphasize on song/dance
the importance of numbers.
the campaign, how • Not all need to
the audience can present. Some may
be involved and just formulate the
what would they get script.
from supporting the
campaign.
Creatives Team • Responsible for the • Whole cartolina
production of the campaign poster
campaign • Whole bond paper
paraphernalia. The campaign
posters and pamphlet.
brochures should
be able to catch the
attention of the
target audience.

F. The following are available to them:

• Venue
Venue Rental Fee Restrictions
Center of the Community
PHP150,000 Performance must include singing
Plaza
None, any type of performance is
Concert grounds PHP200,000
allowed
School Auditorium PHP100,000 Performance must include dancing
Performance must include a song and
Basketball Court PHP90,000
dance number

• Special Guest
Special Guest Talent Fee Restrictions
Kathryn Bernardo and
PHP200,000 None, may perform anywhere
Daniel Padilla
Nadine Samonte and James Will not perform in a basketball court
PHP100,000
Reid or school auditorium
Maine Mendoza and Alden
PHP150,000 Will not perform in a basketball court
Richards
Jolina Magdangal and
- PHP 90,000 Will not perform in school auditorium
Marvin Agustin
What’s New
1. I want to finish high school, land a job, build my dream house and travel the world.
2. Both short-term and long-term.
3. By setting target and plan ahead.
4. Save.
Answers may vary.
What’s In What I Know
Daily Budget Planner 1) C
2) C
Income
3) D
Details Amount
4) A
Salary PhP 100.00
5) A
Other Income 50,00
6) B
7) A
Total PhP 150.00 8) A
9) C
10) B
Food/Drinks
Details Amount
Foods PhP 90.00
Snacks 30.00
Drinks 10.00
Total PhP 130.00
Answers may vary
Answer Key
Determined contingency plans.
Established evaluation system
Establish responsibility centers
Identify goal related-tasks
Identify Resources
Objectives •
• Mission of the Event
• Vision of the Event
Set goals/objectives
Planning Process
1. Identify the steps in the planning process using the format below:
Required:
Additional Activities
Planning Process
Set goals/objectives ✓ To increase awareness of COVID-19.
Identify Resources ✓ PHP 300,000
✓ Manpower
Identify goal related-tasks ✓ To prepare an event to increase the
awareness of COVID-19
Establish responsibility centers ✓ Event Chairperson
for accountability and timeline. ✓ Budget Team
✓ Production Team
✓ Marketing Team
✓ Creatives Team
✓ Administrative Team
Established evaluation system ✓ Event evaluation sheets for attendees
Determined contingency plans. ✓ Stand-by generators in case of power
interruption.
Answers may vary.
Assessment What I Can Do
1. C
1. B
2. C
2. F
3. D
3. A
4. A
4. D
5. A
5. A
6. B
6. D
7. A
7. A
8. A
8. C
9. C
9. D
10. B
10. A
What’s More
Step 1: Set goals or objectives.
Step 2: Identify resources.
Step 3: Identify goal-related tasks.
Step 4: Establish responsibility centers for accountability and timeline.
Step 5: Establish the evaluation system for monitoring and controlling.
Step 6: Determine contingency plan.
 References

Book References:

• Teaching Guide for Senior High School BUSINESS FINANCE – Published by

Commission on Higher Education, 2016 ©, Chairperson: P.B. Licuanan, Ph. D.

• Business Finance for Senior High School, De Guzman, A.A., (2019), Lorimar
Publishing, Inc.

• Business Finance in the Philippine Setting for Senior High School, Aduana, N.L.,
(2017), C&E Publishing, Inc.
For inquiries or feedback, please write or call:

Department of Education - Bureau of Learning Resources (DepEd-BLR)

Ground Floor, Bonifacio Bldg., DepEd Complex

Meralco Avenue, Pasig City, Philippines 1600

Telefax: (632) 8634-1072; 8634-1054; 8631-4985

Email Address: blr.lrqad@deped.gov.ph * blr.lrpd@deped.gov.ph