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NAME:__________________________________________
Kim Yessamin Madarcos
GRADE/SECTION:______________________________
12 Copernicus

BUSINESS FINANCE
Quarter I – Week 3
Financial Planning

CONTEXTUALIZED LEARNING ACTIVITY SHEETS

SCHOOLS DIVISION OF PUERTO PRINCESA CITY
Business Finance – Grade 12
Contextualized Learning Activity Sheets (CLAS)
Quarter I - Module 3: Financial Planning
First Edition, 2021

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 Lesson 1
Financial Planning

MELCS: Identify the steps in the financial planning process. (ABM_BF12-IIIc-d-10)

Objectives:
1. Define and list down the objectives of financial planning.
2. Group the different types of financial planning.
3. Identify steps in the financial planning process.

Let’s Try
Directions: Carefully read each question. And write the letter of your answer on the
space provided before the number.

______
C 1. What determines how a business will finance its strategic goals and objectives?
A. Accounting C. Financial Planning
B. Goal Setting D. Investment Analysis

______
B 2. F & G Inc. is looking to open another manufacturing plant in another continent,
what type of financial planning should F & G Inc. perform?
A. Market Planning C. Operation Planning
B. Long-term planning D. Short-term planning

_____
B 3. Which of the following would not describe financial plan?
A. Activities C. Materials
B. Expected returns D. Resources

_____
C 4. Which of the following financial planning steps that involves identifying alternative
courses of action?
A. Identify Resources
B. Identify goal-related tasks
C. Determine contingency plans
D. Establish the evaluation system for monitoring and controlling

_____
C 5. Which type of financial planning that aims to achieve sales targets and ensure
inventory is manufactured and available to meet projected customer demand?
A. Market Planning C. Operation Planning
B. Long-term planning D. Short-term planning

_____
B 6. Fab Manufacturing is planning to purchase P5M worth of manufacturing
equipment. What type of financial planning should Fab perform for this?
A. Market Planning C. Operation Planning
B. Long-term planning D. Short-term planning

1
_____
D 7. Short term financial planning is done to address which of the following concerns?
A. Products are sold
B. Long Term financial planning
C. A purchase of fixed asset is financed
D. Funds are available to purchase supplies

_____
A 8. Ben Seedy is currently developing vision for their business unit department, what
step of the financial process is Ben Seedy in right now?
A. Set goals or objectives.
B. Identify goal-related tasks
C. Determine contingency plans
D. Establish the evaluation system for monitoring and controlling

_____
D 9. Which of the following statements does not describe the importance of financial
planning?
A. Ensures adequacy of funds
B. Helps to avoid hindrances to growth of the company
C. Ensures the support of investors in the provision of funds
D. Maximizes uncertainties brought by the changing market trends

_____
A 10. What does an acronym SMART stand for?
A. Specific, measurable, assignable, realistic and time-related.
B. Suitable, measurable, actionable, rewarded and time-related.
C. Specific, measurable, actionable, resourced and time-related.
D. Standardized, measurable, achievable, rewarded and time-related.

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 Let’s Explore and Discover
Unlocking of Difficulties

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).

Financial planning is the process of

estimating the capital requirements and
determining their sources including their
efficient utilization. It is also the process of
outlining the financial process of an
enterprise in terms of procurement,
investment, and administration of funds.

Objectives of Financial Planning

Financial planning is geared towards the following objectives:

1. To determine the capital requirements of the firm – This involves identification of the
firm’s capital requirements like the cost of current and fixed assets, promotional
expenses and other future plans that are capital intensive. The needed capital has
to be considered for both short-term and long-term requirements.
2. To determine the appropriate capital structure – The capital structure of the firms
refers to the composition of capital (from equity or liability) or the appropriate
proportion of capital requirements to support the operation of the business. This
includes consideration of both short-term and long-term plans and decisions of the
applicable debt-equity ratio.
3. To outline financial policies – The outlining of financial policies regarding cash
control, lending and borrowing.
4. To ensure maximum utilization of scarce financial resources at least cost to yield
expected returns on investment.

Importance of Financial Planning

The effectiveness of the financial plan is dependent on the adequacy of financial and
investment policies. The following state why financial planning is important.
1. Ensures adequacy of funds.
2. Helps in maintaining stability through a reasonable balance between outflow and
inflow of funds.
3. Ensures the support of investors in the provision of funds due to the presence of
sound financial and investment policies.
4. Helps in prioritizing expansion programs needed for long-run survival of the
company.
5. Reduces uncertainties brought by the changing market trends which can be faced
easily through the establishment of enough cash.

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 6. Helps to avoid hindrances to growth of the company by considering the capital
requirements both for short and future plans.

(Source: Angeles A. De Guzman. Business Finance for senior high school. Quezon City:
LORIMAR Publishing Inc., 2019, 50-51.)

Types of Financial Planning

Long-term financial plans (Strategic Plan)

✓ These are a set of goals that lay out the overall direction of the company.
✓ A long-term financial plan 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).

Short-term financial plans (Tactical Plan)

✓ 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).

Long-Term Planning Short-Term Planning

Persons Involved More participation from Top management is still involved but
top management there is more participation from lower-
level managers (production, marketing,
personnel, finance and plant facilities)
because their inputs are crucial at this
stage since they are the ones who
implement these plans.
Time Period 2 to 10 years 1 year or less
Level of Detail Less More
Focus Direction of the company Everyday functioning of the company
Comparison of Short-Term and Long-Term Planning (Gitman & Zutter, 2012)

Steps in Financial Planning Process

1) Set goals or objectives.

o 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.
2) Identify Resources
o Resources include production capacity, human resources who will man the
operations and financial resources (Borja & Cayanan, 2015).
3) Identify goal-related tasks
o Each goal should have tasks or projects associated with its achievement.

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 4) Establish responsibility centers for accountability and timeline
o Establishing timelines for completing associated tasks and assign individuals
to complete them.
5) Establish the evaluation system for monitoring and controlling
o Establish a mechanism which will allow plans to be
o 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
o In planning, contingencies must be considered as well and identify alternative
courses of action.
o 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).

Characteristics of an Effective Plan

In planning, the goal of maximizing shareholders’ wealth must always be put in mind.
The following criteria may be used for effective planning:
▪ Specific – target a specific area for improvement.
▪ Measurable – quantify or at least suggest an indicator of progress.
▪ Assignable – specify who will do it.
▪ Realistic – state what results can realistically be achieved, given
available resources.
▪ Time-related – specify when the result(s) can be achieved. (Doran, G.
T. (1981). "There's a S.M.A.R.T. way to write management's goals and
objectives". Management Review (AMA FORUM) 70 (11): 35–36.)

(Source: Jerelleen A. Rodriguez, et at., Business Finance-Teacher’s Guide Quezon City:

Commission on Higher Education, 2016, 119,128.)

Let’s Practice

Directions: Read each statement below carefully. Place a T on the space provided before
each number if the statement describes financial planning and its objectives. Place an F
if the statements do not describe financial planning and its objectives.

____
T 1. Financial planning sets programs and budgets relative to financial transactions of a
firm.
____
F 2. Financial planning defined a path to go to obtain new customers and strengthen
relationship with clients.
____
T 3. Financial planning aims to determine the appropriate capital structure of the firm.
____
T 4. Financial planning aims to ensure maximum utilization of scarce financial
resources of the firm.
____
F 5. Financial planning aims to provide organization personnel with a clear picture of
their tasks and responsibilities.

5
Directions: Listed below is the list of descriptions of financial planning. Grouped them
according to type of financial planning and write only letter under the category they
belong.

A. The persons involved are from top E. Focuses on the direction of the
management. company
B. The time period is one (1) year or less. F. More level of details
C. Less level of details G. The time period is two (2) to ten (10)
D. Focuses on everyday functioning of the years.
company H. The persons involved are more of from
the lower level managers

Long-term planning Short-term planning

A B
C D
E F
G H

Long-term planning is concrete, a plan that do not change, however, the short-term
plans made to bring life to the long-term goal can change. (_____) Fact or (_____) bluff?
Place check on the blank.

Let’s Do More

Directions: Identify the steps of financial planning by choosing its description among the given
below.
Determine contingency plans
Establish responsibility centers for accountability and timeline
Establish the evaluation system for monitoring and controlling
Identify goal-related tasks
Identify Resources
Set goals or objectives

Steps in financial Description

planning
1 Step 1 Set goals or objectives
2 Step 2 Identify Resources
3 Step 3 Identify goal-related tasks
4 Step 4 Establish responsibility centers for accountability and timeline
5 Step 5 Establish the evaluation system for monitoring and controlling
6 Step 6 Determine contingency plans

6
Directions: State two (2) long term goals and with that long term goal write two short-term
goals in each to achieve the long-term goal. Consider SMART.

Long-term goals Short-term goals

Ex. In 10 years, I will be
receiving P100,000.00 worth of
monthly dividends from stocks I
cumulatively bought for 15
years.
Graduate as a Dean's Lister
in BS MPM
1. Open an account for stock investing, fund it,
and buy stocks from stable and high paying
dividend companies.
2. Stick on my monthly budget allocating funds
for regular investment to buy more stocks in
Philippine Stock Exchange.
1. Study Hard and do every requirements to
able to fulfill being a dean's lister.

2. Make sure to review every requirements and

clas given to graduate.

Build a business that I love 1. Invest and buy stocks to be able to start a business
shop.

2. Use 20,30,50 strategy in building business.

Why is it important that short-term and long-term are related?

____________________________________________________________________________________________
Short-term goals serve as checkpoints on your way to achieving your life's long-term objectives.
____________________________________________________________________________________________
They assist you in determining how far you have traveled and how much further you have to
____________________________________________________________________________________________
travel to reach your final destination. You must also break down long-term goals into short-term
goals in order to attain them.
____________________________________________________________________________________________

Let’s Sum It Up
Directions: Complete the sentences by filling the blanks with the correct answer.

______________
PLANNING provides road maps for guiding, coordinating, and controlling the firm’s
actions to achieve its objectives. FINANCIAL
________________ is the process of outlining the financial
PLANNING
process of an enterprise in terms of procurement, investment, and administration of
funds. The steps in financial process are ______________________________________,
SET GOALS OR OBJECTIVES
____________________________________, _________________________________________________,
IDENTIFY RESOURCES IDENTIFY GOAL-RELATED TASK
________________________________________,
Establish ______________________________________,
responsibility centers for accountability and timeline and
_________________________________________________________.
Establish the evaluation system for monitoring and controlling
DETERMINE CONTINGENCY PLANS.

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 Let’s Assess

Directions: Read carefully each question. And write the letter of your answer on the
space provided before the number.

______
C 1. What determines how a business will finance its strategic goals and objectives?
A. Accounting C. Financial Planning
B. Goal Setting D. Investment Analysis

_____
C 2. Which of the following financial planning steps that involves identifying alternative
courses of action?
A. Identify Resources
B. Identify goal-related tasks
C. Determine contingency plans
D. Establish the evaluation system for monitoring and controlling

_____
A 3. Ben Seedy is currently developing vision for their business unit department, what
step of the financial process is Ben Seedy in right now?
A. Set goals or objectives.
B. Identify goal-related tasks
C. Determine contingency plans
D. Establish the evaluation system for monitoring and controlling

______
B 4. F & G Inc. is looking to open another manufacturing plant in another continent,
what type of financial planning should F & G Inc. perform?
A. Market Planning C. Operation Planning
B. Long-term planning D. Short-term planning

_____
B 5. Fab Manufacturing is planning to purchase P5M worth of manufacturing
equipment. What type of financial planning should Fab perform for this?
A. Market Planning C. Operation Planning
B. Long-term planning D. Short-term planning

_____
C 6. Which type of financial planning that aims to achieve sales targets and ensure
inventory is manufactured and available to meet projected customer demand?
A. Market Planning C. Operation Planning
B. Long-term planning D. Short-term planning

_____
D 7. Which of the following statements does not describe the importance of financial
planning?
A. Ensures adequacy of funds
B. Helps to avoid hindrances to growth of the company
C. Ensures the support of investors in the provision of funds
D. Maximizes uncertainties brought by the changing market trends

_____
B 8. Which of the following would not describe financial plan?
A. Activities C. Materials
B. Expected returns D. Resources

8
_____
D 9. Short term financial planning is done to address which of the following concerns?
A. Products are sold
B. Long Term financial planning
C. A purchase of fixed asset is financed
D. Funds are available to purchase supplies

_____
A 10. What does an acronym SMART stand for?
A. Specific, measurable, assignable, realistic and time-related.
B. Suitable, measurable, actionable, rewarded and time-related.
C. Specific, measurable, actionable, resourced and time-related.
D. Standardized, measurable, achievable, rewarded and time-related.

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 Answer Key

Let’s Try
1. C 2. B 3. B 4. C 5. C 6. B 7. D 8. A 9. D 10. A

Let’s Practice
Activity 1: Activity 2:
1. T Long-term planning Short-term planning
2. F A B
C D
3. T
E F
4. T G H
5. F

Let’s Do More
Activity 1 Activity 2

Steps in Description ANSWER VARIES

financial
planning
1 Step 1
2 Step 2
3 Step 3
4 Step 4
5 Step 5
6 Step 6
Set goals or objectives
Identify Resources
Identify goal-related tasks
Establish responsibility centers for accountability and
timeline
Establish the evaluation system for monitoring and
controlling
Determine contingency plans

Let’s Sum It Up

______________
Planning provides road maps for guiding, coordinating, and controlling the firm’s actions
to achieve its objectives. Financial ________________
planning is the process of outlining the financial process of an
enterprise in terms of procurement, investment, and administration of funds. The steps in
financial process are ______________________________________,
Set goals or objectives
Identify resources
____________________________________, Identify goal-related task
_________________________________________________,
________________________________________,
Establish responsibility centers for accountability and timeline ______________________________________,
Establish the evaluation system monitoring and controlling and
Determine contingency plans
_________________________________________________________.

References
Teacher’s Guide

Jerelleen A. Rodriguez, et at., Business Finance-Teacher’s Guide Quezon City: Commission

on Higher Education, 2016.

Book

De Guzman, Angeles A. Business Finance for senior high school. Quezon City: LORIMAR
Publishing Inc., 2019

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