Republic of the Philippines

Department of Education
REGION IV-A CALABARZON
SCHOOLS DIVISION OF BATANGAS

LEARNING ACTIVITY SHEET IN BUSINESS FINANCE

Explain the flow of funds within an organization – through and from the
enterprise—and the role of the financial manager
Name of Learner: ______________________________________
Grade Level: 12___________________________________
Strand/Track: ABM-ACADEMIC_______________________
Section: ______________________________________

AS
Date: (Introduction to Development)
(Engagement to Assimilation)

A. Background Information for Learners

G
This lesson introduces the circular flow model to students by creating a model of flow
of funds within an organization. Any company, whether it’s a small-town bakery or
corporations, needs money to operate. Revenues from sales of the firm’s products

N
should be the chief source of funding. But money from sales doesn’t always come in
when it’s needed to pay the bills. Financial managers must track how money is
flowing into and out of the firm. The key activities of the financial manager are:
TA
financial planning, investment (spending money) financing (raising money). Thus,
finance is critical to the success of all companies if the financial managers failed to
their role.
B. Learning Competency with code
Explain the flow of funds within an organization – through and from the enterprise—
BA

and the role of the financial manager. (ABM_BF12-IIIa-2)

C. Directions/ Instructions
After going through with this unit, you are expected to:
1. Use the Learning Activity Sheet with care.
O

2. Read the instruction carefully before doing each task.

3. Observe honesty and integrity in doing the tasks.
4. Record your points for each activity
SD

5. Always aim to get at least 80% of the total number of given items.
6. Return this Learning Activity Sheet a day before Saturday or on the
schedule retrieval of module in your Barangay.
7. If you have any questions or concern, you can message your teacher. Let
us start your business finance activity!
.
D. Exercises / Activities
DAY 1
D.1 INTRODUCTION
a. What I need to Know
After going through with this unit, you are expected to
• Explain the flow of funds within an organization – through and from the
Enterprise.

1
 Republic of the Philippines
Department of Education
REGION IV-A CALABARZON
SCHOOLS DIVISION OF BATANGAS

• Explain the role of financial managers

b. What’s New?
Directions: Read the scenario and answer the following question. You may ask the
help of your family members to act out the situations. Write your answer on your
answer sheet.
Hmmm, where I will
get cash for my Hmm…where I

AS
business expansion? will place my
excess cash?

Sam knew that Connie had excess

G
money. Sam approached Connie to
lend him the capital he needs to
expand his business for a 20%
AN
interest. Since Connie observed that
Sam’s business has been profitable,
Connie is willing to lend Sam the
money since she is confident that
Sam can repay his loan can now
T
expand his operations to gain more
profit from his business.
BA

Guided Questions:
1. Who is the “Savers” or people who spend less that result in excess cash?
_______________________________________________________________
2. Who is the “User of Funds” or people who need money?
________________________________________________________________
O

3. How the transfer of funds takes place?

________________________________________________________________
4. What is the use of funds in a firm?
SD

________________________________________________________________
5. How the transfer of funds takes place when Sam and Connie did not meet?
_______________________________________________________________

MY SCORE:

/5

D.2 DEVELOPMENT
a. What I Know?
Activity No. 2: “Cash Flow of the Firm”

2
 Republic of the Philippines
Department of Education
REGION IV-A CALABARZON
SCHOOLS DIVISION OF BATANGAS

Directions: Study the diagram with your understanding, look at the words or
group of words below inside the box and put them in the appropriate label. Write your
answer in your answer sheet.

A. Cash returned to investors.

B. Cash reinvested.
C. Cash generated by operations.

AS
D. Cash invested in real assets
E. Cash raised from investors by selling financial assets.

(2.) (1.)

G
Investors:
Firms’ Financial
Individuals/
Operations AN Manager (4.) Institutions
(3.)
(5.)
MY SCORE:

/5
T
c. What’s In
BA

Activity No. 3 “Uses of Funds”.

Directions: Use the spider map to brainstorm the uses of funds within the
organization. Write your answer in your answer sheet.

1._______________ 5._______________
O

Uses of
Funds
SD

2._______________
4._______________

3._______________
Guided Question:
1. In one sentence: What happens when money is less available within the
organization?
_________________________________________________________
MY SCORE:

/5

3
 Republic of the Philippines
Department of Education
REGION IV-A CALABARZON
SCHOOLS DIVISION OF BATANGAS

d. What is It

Remember:
Financial managers evaluating decision alternatives or potential actions must
consider risk, return, and the impact on share price. The primary goal of the financial
manager is maximizing the wealth. Financial managers focus on cash flows, the
inflows and outflows of cash. The main type of cash inflow and outflow in a typical

AS
business is as follows:

INFLOWS OUTFLOWS
Cash sales to customers Purchasing finished goods for re-sale

Receipts from customers who were
allowed to buy on credit (trade debtors)
Interest on bank and other balances
AN
Proceeds from sale of fixed assets
Investment by shareholders
T
They plan and monitor the firm’s cash flows to ensure that cash is available when
BA
G
Purchasing raw materials and other
components needed for the
manufacturing of the final product
Paying salaries and wages and other
operating expenses
Purchasing fixed assets
Paying the interest on, or repayment of
loans
Paying taxes

needed. The key activities of the financial manager are:

• Financial planning: Preparing the financial plan, which projects revenues,

expenditures, and financing needs over a given period?
• Investment (spending money): Investing the firm’s funds in projects and
securities that provide high returns in relation to their risks.
O

• Financing (raising money): Obtaining funding for the firm’s operations and
investments and seeking the best balance between debt (borrowed funds)
and equity (funds raised through the sale of ownership in the business).
SD

Cash Flow of Firms

 (2.) (1.)
Investors:
Firms’ Financial Individuals/
Operations (3.) Manager (4.) Institutions

(5.)

(1) Cash rose from investors by selling financial assets.

(2) Cash invested in real assets (tangible and intangible).

4
 Republic of the Philippines
Department of Education
REGION IV-A CALABARZON
SCHOOLS DIVISION OF BATANGAS

(3) Cash generated by operations.

(4) Cash reinvested.
(5) Cash returned to investors.–mandatory (e.g. loan payments)–discretionary (e.g.
dividends)
Three ways of flow of funds
In a well-functioning economy, capital flows efficiently from those with sur-plus

AS
capital to those who need it. This transfer can take place in the three ways
described in Figure 1.

1. Direct Transfer
Sell-Securities (Stocks or Bonds)
BUSINESS INVESTORS

G
Individual/Institution
Cash
2. Indirect transfer through Investment Bankers
Sell-Securities
AN Sell-Securities
(Stocks or Bonds) (Stocks or Bonds)

BUSINESS INVESTMENT INVESTORS

BANKS Individual/Institution
T
Cash Cash
BA

3. Indirect Transfer through Financial Institution/ Market

Sell-Securities Sell-Securities
(Stocks or Bonds) (Stocks or Bonds)

BUSINESS INVESTMENT INVESTORS

BANKS Individual/Institution

Cash Cash
O

Figure 1: Diagram of Capital flow process

Role of Financial Role of Financial Markets Role of Investors

SD

Managers
Financial managers The financial markets provide Investors provide the
make financing a forum in which firms can funds that are
decisions that require issue securities to obtain the to be used by
funding from funds that they need and in financial managers
investors in the financial which investors can purchase to
markets. securities to invest their fund finance corporate
growth.

5
 Republic of the Philippines
Department of Education
REGION IV-A CALABARZON
SCHOOLS DIVISION OF BATANGAS

DAY 2
D.3 ENGAGEMENT
a. What is more?
Activity No. 4: “Task of Financial Manager”
Directions: Study the diagram. Look at the words or group of words below
inside the box and put them in the appropriate label. Write your answer in your

AS
answer sheet

A. Manage Cash Flow

B. Investment (spending money)
C. Financing (raising money)

G
T AN
MY SCORE:
BA

/5

b. What I can Do?

Activity No 6 : “Money go Round and Round”
Direction: Draw a diagram that describes your experiences as a user’s of funds
using indirect transfer through financial institution in a firm. What financial
decision did you made? Write your answer in your answer sheet.
O
SD

MY SCORE:

/5

6
 Republic of the Philippines
Department of Education
REGION IV-A CALABARZON
SCHOOLS DIVISION OF BATANGAS

D.4 ASSIMILATION
a. What I have Learned?
Activity 8: “I found out”
Direction: Enumeration. Give what is asked in the items below. Write your answer
in your answer sheet
Items Answer
1.
1. Give the (3) ways of flow of 2.

AS
funds
3.
4
2. Give the (2) role of financial 5
Manager 6
7.

G
MY SCORE:

/7
AN
b. Assessment
Activity 9: “Movement of Funds”
Directions: Read the mini case study and answer the guided questions. Write your
T
answer in your answer sheet.
BA

Anne Cruz owns Anne Bakeshop Corporation, a home-grown Filipino bakeshop

company and current equity of Php 100,000.00. With the increasing demand, she is
planning to expand her bakeshop space. After much analysis she determined that
an initial investment of Php 90,000.00 in fixed assets is necessary. These funds can
be obtained in either of two ways. The first is the no-debt plan, under which she
would ask a relative to become an investor (owner) by investing the full Php
O

90,000.00 (selling of shares of stocks). The other alternative, the debt plan, involves
borrowing Php 90,000.00 from the nearby rural bank at 10% annual interest. What
must she do?
SD

Guided Questions:
1. Explain the flow of funds that are present in the case study? How the transfer of
fund takes place?
________________________________________________________________
________________________________________________________________
________________________________________________________________

2. If you were the financial manager, what financial decisions would you
recommend to Anne? Why?
________________________________________________________________
________________________________________________________________
MY SCORE:

7 /10
 Republic of the Philippines
Department of Education
REGION IV-A CALABARZON
SCHOOLS DIVISION OF BATANGAS

E. Guide Questions ( OPTIONAL )

1. Why do we need to study the flow of funds within the organization?
______________________________________________________________
2. Why financial manager is important to the success of the business?
______________________________________________________________
F. Rubrics

AS
Category Points
The student follows directions. (plus2)
The worksheet was completed as instructed. (plus 10)
The worksheet was partially completed. (plus 2)

G
The activity was not completed. (no points)
G. Reflection
Learners will write on their notebooks or journals their insights about the lesson.
AN
Write your answer in your answer sheet
I understand that_____________________.
I realized that _______________________
T
H. References
BA

Books
Arthur S. Cayanan, ,.et.al. Business Finance . Rex Book Store.
Department of Education. Teaching Guide in Senior High School Published by the
Commission on Higher Education, 2016.
Eugene F Brigham and oel F. Houston, Fundamental of Financial Management. 15th
edition, 2018
O

Electronic Sources
https://opentextbc.ca/businessopenstax/chapter/the-role-of-finance-and-the-financial-
SD

manager/.Retrieved October 7, 2020

https://www.newyorkfed.org/medialibrary/media/outreach-and-education/ny-fed-
content-for-educators/COVID-Monetary-Policy_High-School-Lesson-Plan.pdf
Retrieved October 7, 2020
https://www.academia.edu/36193156/FINANCIAL_MANAGEMENT_LECTURE_NOT
E_docx Retrieved October 7, 2020
http://www.its.caltech.edu/~rosentha/courses/BEM103/Readings/JWCh01.pdf
Retrieved October 7, 2020

8
 Republic of the Philippines
Department of Education
REGION IV-A CALABARZON
SCHOOLS DIVISION OF BATANGAS

I. Answer Key

What in What is more

1. Purchase of inventory 1. Manage cash flow (1), (2), (4), (5)

2. Payment of dividends 2. Investment (2)

AS
3. Purchase of Fixed assets 3. Financing (1), (4), (5)
4. Paying Salaries What I can do
5. Paying taxes 1. A. The business uses cash to acquire
6. payment of all business resources (assets such as stocks) (CASH)
expenses 2. C. The resources are put to work and goods

G
and services produced. These are then sold
What I know to customers (INVENTORY)
1. E. Cash raised from 3. D. Some company purchase inventory on
investors by selling financial
assets.
AN account. (PAYABLES)
4. B. Some customers pay in cash (great), but
2. D. Cash invested in real
others ask for time to pay. Eventually they
assets
pay and these funds are used to settle any
3. C. Cash generated by
liabilities of the business (e.g. pay suppliers)
T
operations
4. B. Cash reinvested (RECIEVABLE)
5. A. Cash returned to
BA

investors
O
SD