Sdo Batangas: Department of Education

Republic of the Philippines
Department of Education
REGION IV-A CALABARZON
SCHOOLS DIVISION OF BATANGAS
LEARNING ACTIVITY SHEET

BUSINESS FINANCE
Explain Tools in Managing Cash, Receivables and inventory
Name of Learner: ____________________________________
Grade Level: 12__________________________________
Strand/Track: ABM / Academic______________________
Section: ____________________________________
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Date: November 2, 2020 (Week 3) Introduction - Development
November 3, 2020 (Week 3) Engagement - Assimilation
A. Background Information for Learners
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This lesson will help you learn and understand that the firm needs cash to pay for
expenditures that arise from time to time. Even if the anticipated cash receipts is equal to
the anticipated cash expenditures, it is still necessary to maintain a sufficient cash fund
for the firm to meet its cash commitments.
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Since liquidity is a primary concern of sound business finance, firms prefer cash sales
over credit sales. Many companies, however, cannot avoid the extension of credit to
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customers for various reasons and it is represented by Accounts Receivable in the firm’s
record. Through this lesson, you will also learn the different Working Capital Assets and
their importance in the operations of the company. Working Capital is the company’s
investment in current assets such as cash, accounts receivable, and inventories while
Net Working Capital is the difference between current asset and current liabilities.
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B. Learning Competency with code

The learners shall be able to explain tools in managing cash, receivables, and inventory.
(ABM_BF12-IIIc-d-12)
C. Directions/ Instructions
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Before starting with this learning activity, I want you to stay focus answering the tasks for
you to easily understand the questions and instructions given on each activity. Read the
simple Instructions below and Happy Working!
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1. Use the Learning Activity diligently.

2. Use your notebook or journal and copy the useful topic as your future reference.
3. Read the simple instructions carefully before doing each task.
4. Perform all the provided activities.
5. Analyze and evaluate your answer for you to get a high or perfect score.
6. Return the activity sheets on the day of retrieval.
7. Use a separate sheet for your answers to the activity.
8. If you have queries, you may send a message thru FB and messenger account -
Ruperta Gonzales. Contact number 09302162162
D. Exercises / Activities
Address: Provincial Sports Complex, Bolbok, 4200 Batangas City

(043)722-1840 / 722-1796 / 722-1437 / 722-2675 / 722-1662
deped.batangas@deped.gov.ph
www.depedbatangas.org
CRN 44 100 18 93 0045

Day 1
A. INTRODUCTION
a. What I Need to Know?
Activity No. 1
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IDENTIFICATION
Directions: Choose the correct answer from the box that correspond to the statement
below. Write the answer in your journal.
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Cash Liquidity Working Account Inventory
Management Management AN Capital Receivables Management
________________________1. It refers to the capital which is continuously circulating

in the company.
________________________2. The unpaid portion of the firm’s credit sales is
represented by what account?
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________________________3. This money mobilization is considered techniques to
reduce the use of what types of management?
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________________________4. It is the ability of the firm to pay its bills on time or

otherwise meet its current obligations.
________________________5. The activity that keeps track of how many of the
produce items is needed to create a product or service on hand.
b. What’s New?
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Activity No.2
Directions: Calculate each Financial ratio using the information given on the table
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below. Provide a separate sheet for your solutions.

1. Current ratio. This is current assets divided by current liabilities.
2. Quick ratio. This is current assets minus inventory, divided by current liabilities.
3. Cash ratio. This is cash and cash equivalents, divided by current liabilities.
4. Inventory Turnover ratio. This is Net Sales, divided by Average Inventory
5. Accounts Receivable Turnover Ratio. This is Total credit sales divided by Accounts
Receivable

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CRN 44 100 18 93 0045

Cash Php 288,000.00
Accounts Receivable Php 81,000.00

Inventories Php 14,000.00
Current Liabilities Php 280,000.00

Net Sales Php 300,000.00
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B. DEVELOPMENT
a. What I Know?
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Activity No. 1
Dealing with Letters

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Directions: Let us check your knowledge to our topic. Kindly arrange the letter to form a
word or group of words. These are the terms you commonly encounter on this lesson.
1. BSHCAUDTGTE __________________________ financial planning

2. IONCLTLECS __________________________ payment already due
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3. SWARTILAMERA ___________________________ production cost
4. ACLTOEALRL ___________________________ pledge
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5. PTSCIRHAEES ___________________________ sales in cash basis
b. What’s In?
Activity No. 2
TRUE OR FALSE
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Directions: Write TRUE if the statement is correct and FALSE if the statement is
incorrect. Write the answer in your journal.
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___________1.Being the most liquid asset, Cash is the most important account in the
balance sheet.
----------------- 2.The unpaid portion of credit sales is represented by accounts receivable
in the firm’s record.
___________3.The firm needs credit sales to pay for expenditures that arise from time
to time.
___________4. Working Capital is not used to cover fund requirements of the company
as they are needed.
___________5. Inventory management consist of two aspects namely, liquidity and
profitability.
c. What Is It?

(043)722-1840 / 722-1796 / 722-1437 / 722-2675 / 722-1662
CRN 44 100 18 93 0045

Activity No. 3
MULTIPLE CHOICE
Directions: Read each item carefully. Choose the correct answer from the choices
given.
1. If a company has a current assets of Php 850,000 and current liabilities of Php
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500,000, the amount of its working capital is_________.
A. Php150,000 B. Php300,000 C. Php350,000 D. Php250,000
2. Ropert’s canteen total sales is 525,000 and 60% of it is on credit sales. If the year-end
receivables turnover is 5, the average collection period (based on a 365-day/year)
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is_______.
A. 63 days B. 53 days AN C. 83 days D. 73 days
3. Using the data provided on No. 2, its year-end receivable is ______.
4. Regina owns and operates a garment store. Examine her current assets and liabilities
below and compute her net working capital._____.
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Cash Php 10,000 Accounts Payable Php 7,500
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Accounts Receivable Php 5,000 Accrued Expense Php 2,500

Inventory Php 15,000 Other Trade Debt Php 5,000

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5. The day’s sale in inventory is 73. The cost of goods sold is Php720,000. The net sales
is Php1,020,000. The beginning inventory was Php82,000. What is the ending
inventory? ____
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(043)722-1840 / 722-1796 / 722-1437 / 722-2675 / 722-1662
CRN 44 100 18 93 0045

Day 2
C. ENGAGEMENT
a. What’s more?
Activity No.1
Problem Solving
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Directions: Read and analyze the problem carefully.
B. Bugay Industries, a defense contractor, is developing a cash budget for October,
November, and December. Jungaya’s sales in August and September were Php
100,000 and Php 200,000 respectively. Sales of Php 400,000, Php 300,000 and Php
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200,000 have been forecast for October, November, and December respectively.
Historically, 20% of the firm’s sales have been for cash, 50% have generated accounts
receivable collected after 1 month, and the remaining 30% have generated accounts
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receivable collected after 2 months. In December, the firm will receive a Php 30,000
dividend from stock in a subsidiary.
Required: Prepare the cash receipts section of the cash budget using your journal.
b. What I can do?
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Activity No. 2
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Problem Solving
Directions: Analyze the problem and do the computation as required in your journal.
Gerry Jacobs, a financial analyst for Best Valu Supermarkets, has prepared the following
sales and cash disbursement estimates for the period of August through December of
the current year
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Month Sales Cash Disbursements
August 400 300

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September 500 500

October 500 700
November 600 400
December 700 500
90% of sales are for cash, the remaining 10% are collected one month later. All
disbursements are on a cash basis. The firm wishes to maintain a minimum cash
balance of 50(pesos). The beginning cash balance in September is 25(pesos).

(043)722-1840 / 722-1796 / 722-1437 / 722-2675 / 722-1662
CRN 44 100 18 93 0045

Required: In your journal, prepare a cash budget for the months of October, November,
and December, noting any needed financing or excess cash available.
D. ASSIMILATION
a. What I have learned?
Activity No. 1
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Matching Type (Column A to Column B)
Directions: Write the letter on the space provided before each number
A B
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1. Days of Inventory A Financial resources
2. Cash Conversion Cycle AN B Most liquid assets

3. Cash disbursements C Materials not yet put into production
4.Capital D Goods and labor put into production but not

yet finished
5. Cash E Net operating cycle
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6. Cash receipts F Defines the quality of accounts receivable
collection
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7.Credit Management G Known as the cash outlays for a given period

8. Raw materials H Cash receipts less cash disbursements
9.Work in process I Average number of days to sell its inventory
10. net cash flow J Inflows of cash in a given financial period.

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(043)722-1840 / 722-1796 / 722-1437 / 722-2675 / 722-1662
CRN 44 100 18 93 0045

b. What I can Do? (Assessment)
Activity No. 2
TRUE OR FALSE
Directions: Write TRUE if the statement is CORRECT and if FALSE, explain why the
statement is INCORRECT. Write your answer in the journal.
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__________1. Working capital is the company’s investment in current assets such as
account receivables and inventories so as the net working capital.
__________2. To be able to compute for the company’s working capital, the financial
manager must consider the Statement of Comprehensive Income or
Income Statement.
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__________3. When we say, the sum of days of inventory and days of receivables, we
only mean it as the operating cycle of the business.
__________4. Account Receivable is one of the real accounts in the current assets that
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we consider to determine the working capital of the company.
__________5. It is necessary and useful to identify future funding requirements or
excess cash within a given period and it is determined in Cash
Budgeting.
__________6. It is always true that the current assets should be financed by the current
liabilities.
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__________7. When the Account Receivable is already in line of item for current assets,
the Notes Receivable account is in no use since they are the same in
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nature.
__________8. All of the firm’s inflows of cash are considered as cash disbursements
and it’s outflows of cash is a cash receipts.
__________9. The Inventory management involves the formulation and administration of
Plan’s and Policies to efficiently and satisfactorily meet production and
Merchandising requirements and minimize costs relative to inventories.
__________10.The inventory in a manufacturing Company has three types; the Raw
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Materials, Work In Process and Finished Goods.
E. Guide Questions
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1. What is the importance and purpose of planning and cash budgeting in the company?
2. What are the effective tools and measures use to manage your cash budget?

(043)722-1840 / 722-1796 / 722-1437 / 722-2675 / 722-1662
CRN 44 100 18 93 0045

F. Rubric for scoring

The rubric below will be used to assess your answers on the following: A. Introduction-
Activity No.1-2, B. Development-Activity No.1-3, C. Engagement-Activity No. 1-2, D.
Assimilation- Activity No.1-2 .
Criteria Criterion 4 Criterion 3 Criterion 2 Criterion 1

100% 20% 30% 20% 30%
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5 Descriptors Descriptors Descriptors Descriptors
.20x5=1 pt. .30x5=1.5 pt. .20x5=1 pt. .30x5=1.5 pt.

.20x5=1 pt. .30x5=1.5 pt. .20x5=1 pt. .30x5=1.5 pt.
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.20x5=1 pt. .30x5=1.5 pt.
AN .20x5=1 pt. .30x5=1.5 pt.
.20x5=1 pt. .30x5=1.5 pt. .20x5=1 pt. .30x5=1.5 pt.
.20x5=1 pt. .30x5=1.5 pt. .20x5=1 pt. .30x5=1.5 pt.
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.20x16=3.2 pt. .30x16=4.8 pt. .20x16=3.2 pt. .30x16=4.8 pt.
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.20x36=7.2 pt. .30x36=10.8 pt. .20x36=7.2 pt. .30x36=10.8 pt.

.20x10=2 pt. .30x10=3 pt. .20x10=2 pt. .30x10=3 pt.

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.20x10=2 pt. .30x10=3 pt. .20x10=2 pt. .30x10=3 pt.
97 Maximum Total Points Possible

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G. Reflection
The learners will write on their notebooks or journals their insights about the lesson.
I learned that _____________________________________

I realized that _____________________________________
I understand that __________________________________

(043)722-1840 / 722-1796 / 722-1437 / 722-2675 / 722-1662
CRN 44 100 18 93 0045

H. References for learners
Books
(Burrow, 2008, pp. 117-141)
(Medina, 2007, pp. 74-90)
(Beticon, 2016, pp. 103-129)
(Lianne Martha Maiquez Laroya, 2014-2016)
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Electronics Sources
https://www.civilserviceindia.com/subject/Management/notes/management-of-
cash.htmlahttps://www.dof.gov.ph/download/financial-statement-as-of-february-29-
2020/?wpdmdl=26493&refresh=5f3b411d405811597718813
https://financialadviser.ph/5-money-tips-from-chinkee-tan/
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Other Sources AN
Gitman, L.J. & Zutter C.J. (2012), Principles of Managerial Finance(13th Ed),
USA:Prentice-Hall
Teaching Guide for Senior High School, Business Finance, Published by the
Commission on Higher Education, 2016
Division of City Schools-Manila, Deped NCR, Modules in Business Finance-Tools in
Managing Cash, Receivables and Inventory pp. 18
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(043)722-1840 / 722-1796 / 722-1437 / 722-2675 / 722-1662
CRN 44 100 18 93 0045

I. Answer Key
1. INTRODUCTION Activity 2 2. DEVELOPMENT; Activity 2 Activity 3

Activity 1 Activity 1
1. Working Capital 1. 1.368 1. TRUE 1. C (350,000)
1. CASH BUDGET
2. Accounts Receivables 2. 1.318 2. TRUE 2. D (73 DAYS) (365
. COLLECTIONS DAYS/5)
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3. Cash Management 3. 1.029 3 FALSE 3. A (63,000) (PHP
3 3. RAW MATERIALS 525,000X
60%=315,000/5=63,000)
4. Liquidity Management 4.21.43 4. FALSE 4. B (15,000 )(PHP

4. COLLATERAL 30,000-15,000)
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5. Inventory Management 3.70 5. TRUE 5.B ( PHP 144,000)
5. CASH RECEIPTS
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ENGAGEMENT
Activity 1
FORECASTED SALES 100,000 200,000 400,000 300,000 200,000
AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER

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CASH SALES (20%) 20,000 40,000 80,000 60,000 40,000
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COLLECTION OF AR
1ST MONTH (50%) 50,000 100,000 200,000 150,000
2ND MONTH (30%) 30,000 60,000 120,000
OTHER CASH RECEIPTS 30,000
TOTAL CASH RECEIPTS 210,000 320,000 340,000

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Activity 2
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A Cash Budget for Best Valu Supermarkets

September October November December
Cash Receipts
Sales (cash 90%) 450 450 450 630

Sales Collected (1 mo.lag 10%) 40 50 50 60
Total Cash Receipts 490 500 500 690
Total Cash Disbursements 500 700 400 500

Net Cash Flow (10) (200) 100 190

(043)722-1840 / 722-1796 / 722-1437 / 722-2675 / 722-1662
CRN 44 100 18 93 0045

Beg. Cash Balance 25 15 (185) (85)
Ending Cash Balance 15 (185) (85) 105

Minimum Balance 50 50 50 50
Required financing 35 235 135

Excess Cash 55
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Best Valu Supermarkets should arrange for a line of credit at least 235 pesos during the
four-month period.
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4. ASSIMILATION AN
A1 A2
1. I 1.FALSE
2. E 2.FALSE
3. G 3.TRUE
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4. A 4.TRUE
5. B 5.TRUE
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6. J 6.FALSE
7. F 7.FALSE
8. C 8.FALSE
9. D 9.TRUE
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10. H 10.TRUE
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(043)722-1840 / 722-1796 / 722-1437 / 722-2675 / 722-1662
CRN 44 100 18 93 0045

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LEARNING ACTIVITY SHEET

A. Background Information for Learners

B. Learning Competency with code

1. Use the Learning Activity diligently.

Address: Provincial Sports Complex, Bolbok, 4200 Batangas City

CRN 44 100 18 93 0045

a. What I Need to Know?

________________________1. It refers to the capital which is continuously circulating

________________________4. It is the ability of the firm to pay its bills on time or

below. Provide a separate sheet for your solutions.

Address: Provincial Sports Complex, Bolbok, 4200 Batangas City

CRN 44 100 18 93 0045

Cash Php 288,000.00

Accounts Receivable Php 81,000.00

Current Liabilities Php 280,000.00

Dealing with Letters

1. BSHCAUDTGTE __________________________ financial planning

5. PTSCIRHAEES ___________________________ sales in cash basis

Address: Provincial Sports Complex, Bolbok, 4200 Batangas City

CRN 44 100 18 93 0045

Accounts Receivable Php 5,000 Accrued Expense Php 2,500

A. Php25,000 B. Php5,000 C. Php10,000 D. Php25,000

A. Php154,000 B. Php144,000 C. Php174,000 D. Php154,000

Address: Provincial Sports Complex, Bolbok, 4200 Batangas City

CRN 44 100 18 93 0045

Month Sales Cash Disbursements

August 400 300

September 500 500

November 600 400

December 700 500

Address: Provincial Sports Complex, Bolbok, 4200 Batangas City

CRN 44 100 18 93 0045

2. Cash Conversion Cycle AN B Most liquid assets

4.Capital D Goods and labor put into production but not

7.Credit Management G Known as the cash outlays for a given period

9.Work in process I Average number of days to sell its inventory

10. net cash flow J Inflows of cash in a given financial period.

Address: Provincial Sports Complex, Bolbok, 4200 Batangas City

CRN 44 100 18 93 0045

b. What I can Do? (Assessment)

Materials, Work In Process and Finished Goods.

Address: Provincial Sports Complex, Bolbok, 4200 Batangas City

CRN 44 100 18 93 0045

F. Rubric for scoring

Criteria Criterion 4 Criterion 3 Criterion 2 Criterion 1

5 Descriptors Descriptors Descriptors Descriptors

36 Descriptors Descriptors Descriptors Descriptors

10 Descriptors Descriptors Descriptors Descriptors

10 Descriptors Descriptors Descriptors Descriptors

.20x10=2 pt. .30x10=3 pt. .20x10=2 pt. .30x10=3 pt.

97 Maximum Total Points Possible

I learned that _____________________________________

Address: Provincial Sports Complex, Bolbok, 4200 Batangas City

CRN 44 100 18 93 0045

H. References for learners

Address: Provincial Sports Complex, Bolbok, 4200 Batangas City

CRN 44 100 18 93 0045

1. INTRODUCTION Activity 2 2. DEVELOPMENT; Activity 2 Activity 3

4. Liquidity Management 4.21.43 4. FALSE 4. B (15,000 )(PHP

AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER

1ST MONTH (50%) 50,000 100,000 200,000 150,000

2ND MONTH (30%) 30,000 60,000 120,000