Dumaguete City National High School

Dumaguete City Division

BUSINESS FINANCE
Prepared by: Miss Clareen June E. Dagoy

Quarter 1 – Week 1

Content Standard:
The learners demonstrate an understanding of the definition of finance, the activities of the financial manager, and financial
institutions and markets.

Performance Standard:
The learners are able to:

a. define Finance
b. describe who are responsible for financial management within an organization
c. describe the primary activities of the financial manager
d. describe how the financial manager helps in achieving the goal of the organization

Most Essential Learning Competency (MELC):

The learner explains the major role of financial management and the different individuals involved.

Specific Learning Outcomes:

After going through this module, you are expected to:
• Understand the key positions in a corporate organization and identify the roles of each.
• Identify the primary activities of the financial manager

Objectives:
a. explain the role of a finance manager through the cited quotes from the messages of the Chief Financial officers of the
respective corporations
b. make a financial project that has potential to earn profit, and will benefit the community in the long-term and
c. value the significance of saving money through the activity called: Reflective Learning Sheet.

What I Know / Activity #1:

Before during the face to face classes, we are used to with: going to school, study, make friends and after, going back home, these
things were your way of life as a student.
Direction: Below are questions related to our lesson for this week, write down your answers on the space provided.
 1. How much allowance do you receive and how often do you receive it (daily, weekly, etc.)?

2. What are the activities you usually do every day as a student? Narrate these activities.
Example: From getting to school, attending to flag ceremony, having meriendas or going out with friends and play video games,
going back home, going to nearby store to buy autoload because you realized you can’t end the day without texting your crush.

3. List the expenses you have incurred (example: tricycle fare, lunch, merienda, computer games, etc.) with the equivalent cost.

4. After the expenses you have incurred, how much money you have left for that day? What do you think is the importance of
saving?

Lesson 1: Explain the major role of financial management and the different
individuals involved

Relevant Vocabulary
a. Finance - science and art of managing money. (Gitman & Zutter, 2012)
b. Budgeting - the act of estimating revenue (in the form of allowance base on activity #1) and expenses over a period of time
(in this case, on a daily basis base on activity #1).
c. Investments - is an asset or item acquired with the goal of generating income or appreciation.
d. Sources of funds - people or institutions that will give us the money.

ALLOWANCE IF THE ALLOWANCE IS NOT ENOUGH,

(Daily) WHERE TO ASK FOR HELP?
Finance Decision – the
activities involving
decisions on where to
use the allowance
Expenses based on the example from
Activity #1
*transportation fare in going to school
*having meriendas
*play video games
*transportation fare in going back home
* buy autoload.

SOURCES OF FUNDS
NOTE: * It is important to have a good finance decision for us to know what to purchase first, including the concept of need over
want.

*Budgeting is an important skill, this comes with good finance decision that will result to saving (which can be considered as one of
your sources of funds or even one of your investments) for future purposes including emergencies.

What is It?

Major role of financial management and the different individuals involved

From the diagram presented, each line is working for the interest of the person on the line above them. Since the managers of the
company are making decisions for the interest of the board of directors and the board of directors do the same for the interests of the
shareholders, it follows that the goal of each individual in a corporate organization should have an objective of shareholders’ wealth
maximization. (Cayanan, A. 2015)

Key positions in a Corporate Organization

 Shareholders: The shareholders elect the Board of Directors (BOD). Each share held is equal to one voting right. Since the
BOD is elected by the shareholders, their responsibility is to carry out the objectives of the shareholders otherwise; they
would not have been elected in that position.

 Stockholders- it is a group that holds one or more shares.

 Board of Directors- is an elected group of individuals that represent stakeholder or the highest policy- making
body in a corporation.

 President- is a leader of a company’s executive group

 VP – second command in rank

VP for Marketing-performing market and competition analysis VP for Finance- raising or providing funds
VP for Operation- formulating daily policies
VP for administration- responsible for management
VP for internal affairs- to assume the duties and responsibilities of the President in the President’s
absence
VP for external affairs-responsible for programs communications

 Managers- exercises managerial functions or manage the company

 Employee- a person employed

Focus your attention to the role of the VP for finance as this is where the rest of the topics for this course will revolve.
What’s More / Activity #2:

The following are the messages of the Chief Financial Officers of the respective corporations. Directions: Reflect on the quotes cited
and mention how critical and dynamic working in the finance field. Write your answers on the blanks provided after each
quote.

1. - Unilever: “Finance plays a critical role across every aspect of our business. We enable the business to turn our ambition and
strategy into sustainable, consistent and superior performance” - Jean-Marc Huët (Unilever)

2. - Jollibee: “It’s very exciting because you are not just thinking of today but what the company will need in the future” -
Ysmael V. Baysa (Morales, 2013)

3. - Globe Telecom: “Yesterday’s solutions are never adequate for the future” - Albert De Larrazabal (Klobucher, 2015)

4. - SM Corporation: “Now, we don’t go out because we need funds. We go out because it’s an opportunity.” – Jose T. Sio
(Montealegre, 2015)

Functions of a Financial Manager

a. Financing
b. Investing
c. Operating
d. Dividend Policies

Recall from activity #1 that there are situations when we are faced with lack of funds. Financing decisions include making
decisions on how to fund long term investments (such as company expansions) and working capital which deals with the day to
day operations of the company (i.e., purchase of inventory, payment of operating expenses, etc.).

The role of the VP for Finance of the Financial Manager is to determine the appropriate capital structure of the company.
Capital structure refers to how much of your total assets is financed by debt and how much is financed by equity. To illustrate,
show/draw the figure below:

Recall:

Assets = Liabilities + Owner’s Equity.

- To be able to acquire assets, our funds must have

come somewhere. If it was bought using cash from
our pockets, it is financed by equity.
- On the other hand, if we used money from our
borrowings, the asset bought is financed by debt.

- In the figure, the total assets is financed by 60%

debt and 40% equity. Accordingly, the capital
structure is 60% debt and 40% equity.

What I have Learned / Activity #3:

What I Can Do / Activity #4:
Directions: Read the scenario below and answer the questions asked on a short bond paper. This will be your first
performance activity for the first quarter, pass this activity #4 at the end of the week.

Financial institutions are intermediaries that play a vital role in nation building. The source of funds
for business to engage in projects that are profitable maximize shareholder wealth, and build communities. Is
there a project you have in mind that is worthwhile, has potential to earn profits, and will benefit your
community in the long-term? List down those projects and choose one (Financial Project).

Processing Questions:
1. What is the title of your financial project? Why did you choose that title?
2. Who are the persons involved in your financial project and what are their roles?
3. Does it have the potential to earn profit? How?
4. How can it benefit the community in the long-term?
5. What financial institutions can help you achieve your dream of a sustainable business for your
shareholder or community?

Rubrics for Activity #4: Critical Thinking

Indicators Max Scoring Details
Score
1. Completeness: Learners responses directly 5 5 - Excellent;
answer each part of questions(s) 4 - Very Good;
3 - Good;
2. Content: Learners response clearly show and understand the 5 2 - Fair;
lesson content 1- Needs Improvement
Learners response provides analysis to the larger of the c
3. Analysis: Learners response provides 5
analysis to the larger concepts of the

4. Writing skills: Learners write clearly, in 5

complete sentences, with minimal errors in
grammar and spelling
What I have Learned / Activity #5:

True/False
Directions: Determine whether the below statements are true of false. Write your answers on a separate sheet of
paper.

1. The primary role of financial institution is to act as the link between the depositors who have the money
and the borrowers who need the money.
2. Financial instruments are tools help finance manager handle hiss cash, his short-term operating
requirements, and long-term business requirements.
3. Financial markets are the platform where financial instruments are offered, bought, and sold.
4. Stocks are shares issued by government.
5. Commercial banks are mainly deposit-taking financial institutions that extend credit to the retail and
consumer market.
6. Investment banks are known to successfully raise funds for small corporations and governments.
7. A financial institutions can be bank on non-bank,
8. Long-term debts are also available to the borrower for his business needs.
9. An example of long-term debt is a bond.
10. Money market instruments are an inexpensive way for government and financial institutions.
References:

Bernstein, Leopold. Financial Statement Analysis, 4th Ed. Illinois: Irwin, 2014.
Brealey, Richard A., Myers, Stewart.C. and Marcus, Alan .J. Fundamentals of Corporate Finance, 3rd Edition. New York: Mc-Graw
Hill Co., 2014.
Brigham, Eugene F. Fundamentals of Corporate Finance, 8th Ed. Canada: Dryden, 2010
Cabrera, Elenita B. Management Advisory Services. Manila: Conanan, 2015.
Cabrera, Elenita B. Management Consulting. Manila: Conanan, 2015.
Cecchetti, Stephen G. Money, Banking and Financial Markets, 2nd Edition. 2010
Cruise, Tom. The Firm. DVD. Directed by Sydney Pollack. USA: Paramount, 1993.
Eakins, Stanley G. The Study Guide. North Carolina: East Carolina University, 2014.
Gitman, Lawrence J. and Joehnick, Michael D. Fundamentals of Investing, 8 th Edition. Boston: Addison Welsey, 2013.
Gitman, Lawrence J. Principles of Financial Management. New York: Pearson 2014
http://suppscentral.aw.com
Ilano, Alberto R. Investment Management and The Philippine Stock Market. Manila: FINEX, 2014
Melicher, Ronald W. and Norton,Edgar A. Introduction to Finance, Markets, Investments and Financial Management, 14th Edition.
Canada: McGraw-Hill Ryerson Higher
Education, 2014.
Padilla, Nicanor B. Jr. How to Analyze Financial Statements. Manila: Conanan, 2007.
Pringle, John J. and Harris, Robert Samuel. Essentials of Managerial Finance, 2nd E. Canada: Dryden, 2014.
Saldana, Cesar G. Principles of Managerial Finance: Philippine Setting. Quezon City: AFA Publications, 2000.
Weston, Fred and Copland, Thomas E. Managerial Finance, 9th Ed., Canada: Dryden, 2012.
White, Gerald I., Sondhi, Ashwinpaul C., and Fried, Dov. The Analysis and Use of Financial Statements, New Jersey: Wiley, 2012.