Business Finance

Quarter 1 – Module 1: Definition of

Finance, Financial Manager’ Activities
and Financial Institutions and
Markets
Lesson 1 – Major Role of Financial
Management and the Different Individuals
Involved
WEEK 1
 What I Need to Know

This module was designed and written with you in mind. It is here to help you master the
Introduction to Business Finance. 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 1 contains three lessons, namely:
• Lesson 1 – Major Role of Financial Management and the Different Individuals
Involved
• Lesson 2 - Distinguish a Financial Institution from Financial Instrument and
Financial Market
• Lesson 3 – Flow of Funds within an Organization-Through and from the Enterprise
and the Role of Financial Manager
After going through this module, you are expected to:
1. Explain major role of financial management and the different individuals involved
2. Distinguished a financial institution from financial instrument and financial market
3. Explain the flow of funds within an organization – through and from the enterprise
– and the role of the financial manager.
 What I Know

Multiple Choice: Encircle the letter of the correct answer.

1. It is the science and art of managing a large amount of money.
A. Finance
B. Ethics
C. Simulation
D. Management
2. It includes tax systems, government expenditures, budget procedures,
stabilization instruments, debt issues and government concerns.
A. Finance
B. Public finance
C. Corporate finance
D. Personal finance
3. It involves in managing assets and debt for a business
A. Finance C. Corporate finance
B. Public finance D. Personal finance
4. It includes proper management of an individual’s income and expenses so
enough money is left over for savings
A. Finance C. Corporate finance
B. Public finance D. Personal finance
5. It is the act of estimating revenue (in the form of their allowance) and expenses
over a period of time
A. Financing C. Investing
B. Budgeting D. Sourcing
6. ______________ come in many forms that will generate income or appreciate in
the future.
A. Finance C. Banking
B. Investments D. Partnership
7. A business owned by one person and operated for his or her own profit.
A. Sole Proprietorship C. Corporation
B. Partnership D. Cooperative
8. A business owned by two or more people and operated for profit.
A. Sole Proprietorship C. Corporation
B. Partnership D. Cooperative
9. An entity created by law owned by shareholders. Overall objective of a
shareholder should be wealth maximization
A. Sole Proprietorship C. Corporation
B. Partnership D. Cooperative
10. Mr. Gonzales understands and interprets the monthly financial statement of their
company, cash flows, interest rates and the effects of inflation on the business. Based on
his study, the company has the capacity to purchase a new machine needed by the
production and operation department.
A. Possesses sound knowledge of accounting and economic concepts and principles.
B. Has good communication skills.
C. Has impressive relationship with banks and other financial institutions.
D. Has outstanding relationship within the business and among other functional areas.
11. During the meeting, the finance manager discusses about the proposed purchase of
machines to be used by the production and operation department. He takes all the ideas
coming from the different department into consideration as he makes the investment
decision.
A. Possesses sound knowledge of accounting and economic concepts and principles.
B. Has good communication skills.
C. Has impressive relationship with banks and other financial institutions.
D. Has outstanding relationship within the business and among other functional areas.
12. Mr. Gonzales applied for a long term-loan to purchase machines needed by the
production and operation department in a bank. He submitted all the requirements and the
bank found out that the company has no late payments or arrears of its previous loan and
so the bank grants the loan.
A. Possesses sound knowledge of accounting and economic concepts and principles.
B. Has good communication skills.
C. Has impressive relationship with banks and other financial institutions.
D. Has outstanding relationship within the business and among other functional areas.
 Major Role of Financial
Lesson
Management and the Different
1 Individuals Involved
Finance is always of great importance, be it in a business or in one's everyday life. ...
This is relevant in project management and business process and also in managing
risks in everyday life. You can face financial risks at different situations such as
buying a car or investing on gold and so on.

What’s In

Flex Your Financially Inclined Mind

Arrange the jumbled words below to find the terms being described by the clues
provided below. These business terms and concepts will be useful for you as you study
the lessons for this module.
1. ANNCFIE = _______________
2. NAEMMAENGT = _______________
3. ICISDEON = _______________
4. DINGEBUTG = _______________
5. ENIOLVEMTNV = _______________
Here are your clues:
1. It describes activities associated with banking, leverage or debt, credit, capital
markets, money, and investments.
2. It is the interlocking functions of creating corporate policy and organizing,
planning, controlling, and directing an organization's resources in order to
achieve the objectives of that policy.
3. It is a conclusion or resolution reached after consideration.
4. It is the process of creating a plan to spend your money. This spending plan is
called a budget.
5. It is the fact or condition of being involved with or participating in something.

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 module includes concepts and strategies that can help you guide
students through this course.

As the facilitator of this module, you are expected to orient and guide the learners on
understanding of key concepts related to the identification of potential business
opportunities within the community. You are also expected motivate and assist the
learners in accomplishing the different tasks and activities included in this module. Lastly,
you are to monitor the progress of the learners and give feedback to help them improve
further their learning.

What’s New

Let’s raise your level of business finance skills. Answer the following crossword puzzle
using the clues below.
 What is It

Finance can be defined:

o Science and art of managing a large amount of money.
o Giving of monetary support for an enterprise
o Monetary resources and affairs of a government, organization or person
Types of finance:
o Public finance – includes tax systems, government expenditures, budget
procedures, stabilization instruments, debt issues and government concerns
o Corporate finance – involves in managing assets and debt for a business
o Personal finance – includes proper management of an individual’s income and
expenses so enough money is left over for savings
Budgeting is the act of estimating revenue (in the form of their allowance) and
expenses over a period of time
Investments come in many forms that will generate income or appreciate in the
future.
Sources of funds. When faced with financial difficulties (in this case, the lack of funds
to meet the current expenses) we look for people or institutions that will give us the
money we need.
Forms of business organizations:
o Sole Proprietorship - A business owned by one person and operated for his or
her own profit.
o Partnership - A business owned by two or more people and operated for profit.
o Corporation – An entity created by law owned by shareholders. Corporations
may either be privately owned or publicly owned. Overall objective of a
shareholder should be wealth maximization
 What’s More

Forms of Business Organizations. Identify the business organization depicted by the

image.
 What I Have Learned

1. Finance can be defined science and art of managing a large amount of money,
giving of monetary support for an enterprise and monetary resources and
affairs of a government, organization or person
2. The following are types of finance: public finance, corporate finance, and
personal finance.
3. Budgeting is the act of estimating revenue (in the form of their allowance) and
expenses over a period of time
4. Investments come in many forms that will generate income or appreciate in the
future. Between hiding their cash under their bed and depositing it in the bank,
it would be better to keep their money in bank deposits because these earn
interest.
5. Sources of funds. When faced with financial difficulties (in this case, the lack of
funds to meet the current expenses) we look for people or institutions that will
give us the money we need.
6. Forms of business organizations: sole proprietorship, partnership and
corporation

What I Can Do

Types of Finance. Identify the types of finance using the smart chart below.
 Assessment

Multiple Choice: Encircle the letter of the correct answer.

1. It is the science and art of managing a large amount of money.
A. Finance
B. Ethics
C. Simulation
D. Management
2. It includes tax systems, government expenditures, budget procedures,
stabilization instruments, debt issues and government concerns.
A. Finance
B. Public finance
C. Corporate finance
D. Personal finance
3. It involves in managing assets and debt for a business
A. Finance C. Corporate finance
B. Public finance D. Personal finance
4. It includes proper management of an individual’s income and expenses so
enough money is left over for savings
A. Finance C. Corporate finance
B. Public finance D. Personal finance
5. It is the act of estimating revenue (in the form of their allowance) and expenses
over a period of time
A. Financing C. Investing
B. Budgeting D. Sourcing
6. ______________ come in many forms that will generate income or appreciate in
the future.
A. Finance C. Banking
B. Investments D. Partnership
7. A business owned by one person and operated for his or her own profit.
A. Sole Proprietorship C. Corporation
B. Partnership D. Cooperative
8. A business owned by two or more people and operated for profit.
A. Sole Proprietorship C. Corporation
B. Partnership D. Cooperative
9. An entity created by law owned by shareholders. Overall objective of a
shareholder should be wealth maximization
A. Sole Proprietorship C. Corporation
B. Partnership D. Cooperative
10. Mr. Gonzales understands and interprets the monthly financial statement of their
company, cash flows, interest rates and the effects of inflation on the business. Based on
his study, the company has the capacity to purchase a new machine needed by the
production and operation department.
A. Possesses sound knowledge of accounting and economic concepts and principles.
B. Has good communication skills.
C. Has impressive relationship with banks and other financial institutions.
D. Has outstanding relationship within the business and among other functional areas.
11. During the meeting, the finance manager discusses about the proposed purchase of
machines to be used by the production and operation department. He takes all the ideas
coming from the different department into consideration as he makes the investment
decision.
A. Possesses sound knowledge of accounting and economic concepts and principles.
B. Has good communication skills.
C. Has impressive relationship with banks and other financial institutions.
D. Has outstanding relationship within the business and among other functional areas.
12. Mr. Gonzales applied for a long term-loan to purchase machines needed by the
production and operation department in a bank. He submitted all the requirements and the
bank found out that the company has no late payments or arrears of its previous loan and
so the bank grants the loan.
A. Possesses sound knowledge of accounting and economic concepts and principles.
B. Has good communication skills.
C. Has impressive relationship with banks and other financial institutions.
D. Has outstanding relationship within the business and among other functional areas.
 Additional Activities
Fast Learning Exercise:
Research on the internet, name any 5 each of the business organization in the
country preferably in the province.
Sole Proprietorship Partnership Corporation

12