Universidad de Sta.

Isabel | Basic Education Department

MODULE 2: Introduction to Financial Management

I. OVERVIEW
Financial Management starts with a plan. This applies to both individuals and
companies. It is not enough to have cash and other resources today. Such resources, if
not managed properly, can be wiped out. Hence, financial management is a must.
From the perspective of a corporation, financial management deals with decisions
that are supposed to maximize the value of shareholders’ wealth. This means
maximizing the market value of the share of stocks. Shares of stocks represent the form
of ownership in a corporation.

II. TIME FRAME

You are given 4 days ( January 26-29, 2022) to complete this module. Every Friday is a
PRIME day. If you encounter difficulty along the way, do not hesitate to message me
through my email mpabico@usi.edu.ph or message me via my messenger Marga Garcia
Pabico every Tuesday and Thursday (―). This module should be returned on ―
January 31, 2022

III. STANDARDS
A. CONTENT STANDARD
The learner demonstrates an understanding of the definition of finance, the activities
of the financial manager, and financial institutions and markets.
B. PERFORMANCE STANDARD
The learner can define finance, describe are who responsible for financial
management within an organization, describe how the financial manager helps in
achieving the goal of the organization, and the role of financial institutions and
markets.
C. VALUE STANDARD
The learner can process from knowledge, analysis, evaluation, and application to
preparathe tion and development of financial plans and programs suited for a small
business to come up wh a sound jujudgmentnd decisions with integrity and honesty.

IV. LEARNING TARGETS

At the end of this module, you should be able to say, “I can…”

1. Explain the major role of financial management and the different individuals involve

2. Distinguish a financial institution from financial instrument and financial market

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 Universidad de Sta. Isabel | Basic Education Department

3. enumerate the varied financial institutions and their corresponding services

4. compare and contrast the varied financial instrument

V. INSTRUCTIONAL DESIGN
Day 1-2
1. Accomplish Worksheet 1: Answer the “ Self –Test Questions page 3 nos. 1-3
2. Refer to your Business Finance Book Read Chapter 1, Introduction to Financial
Management on pages 1-12 and answer the following questions provided on page 4
of this module.
3. List the important concepts you have learned from your readings.

Day 3-4

1. Accomplish Worksheet 3 found on page 4 of this module.

REFERENCES
1. Arthur S. Cayanan , Business Finance ,First Ed., Quezon City : Rex Publishing, Inc., 2017
2. Tugas , Florence. Business Finance, First ED, Quezon City, Vibal Group Inc, 2017

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 Universidad de Sta. Isabel | Basic Education Department

Name: Juliana Marie B. Juanillas Section: 12-ABM A

GRADED

Worksheet 1. : Answer the “ Self –Test “ Questions page 3/ or see last ppt

( Financial System ) nos. 1-5.

1. Why is it that the same company can be a saver and a user of funds?
2. What is the role of financial intermediaries in the financial system?
3. What is the role or function of the Philippine Stock Exchange in the financial system?
4. What are the differences between the Philippine Stock Exchange and the stock
brokerage firms?
5. How can you describe the role of tanks in the financial system?

Answer:

1. Because the purpose of financial intermediaries is to bring together those economic

actors who have surpluses. Finances willing to lend (invest) to those with a scarcity of
funds willing to borrow
2. It serves as a go-between for two parties in a financial transaction, such as a
commercial bank, investment bank, mutual fund, or pension fund. As we have seen,
financial intermediaries play an important role in the global economy today. They are
the "lubricants" that power the economy. Because of the rising complexity of financial
transactions, financial intermediaries must constantly reinvent themselves to meet the
different portfolios and demands of investors. Financial intermediaries are held
accountable to both borrowers and lenders. The word intermediate implies that these
institutions are critical to the functioning of the economy, and they, together with
monetary authorities, must guarantee that credit reaches the needy without risking
the interests of investors. This is one of the most significant issues they face.
3. The PSE brings together businesses that want to generate funds by issuing new
securities. Companies might have easier access to money by listing their shares on
the stock exchange. When a firm is already listed on the exchange, raising fresh
money through an additional public offering is easier and less expensive. As a result,
the PSE plays an important role in the financing of productive firms, which use the
money to expand and create new employment. As a result, it is critical to the
Philippine economy's growth. Furthermore, the PSE makes it easier to sell and
purchase issued stocks and warrants. It provides an appropriate market for the
trading of securities by people and organizations looking to invest their savings or
excess assets through the acquisition of securities. Aside from these tasks, the PSE
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has committed to (a) defending the investing public's interests and (b) establishing
and maintaining an efficient, fair, orderly, and transparent market.
4. PSE is a private, non-profit, non-stock corporation established to offer and maintain a
fair, efficient, transparent, and orderly market for the buying and selling of securities
such as stocks, warrants, bonds, options, and other derivatives. A stock brokerage
business is a financial institution that helps buyers and sellers purchase and sell
financial securities. Brokerage businesses also service a clientele of investors who
trade public stocks and other assets, typically through the firm's agent stockbrokers.
5. Banks play a crucial function in the financial system as an intermediate, or go-
between. They serve three primary purposes:
A. Banks are venues where people may deposit their savings and earn interest on
them. People would have to store and preserve their funds individually if there were
no banks, which would pose significant dangers.
B. Banks are generally in charge of the payment system. People are using less cash,
so electronic payments are becoming more important. This implies that banks are
processing more card payments, transfers, direct debits, and other transactions daily.
C. Banks make loans to both individuals and businesses. Without banks, it would be
extremely difficult for individuals to purchase a home, establish a business, or for
corporations to make investments, to name a few examples. Banks also assist firms
with their (sometimes more sophisticated) financial requirements. This might include
the many methods for gaining access to a cap.

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 Universidad de Sta. Isabel | Basic Education Department

Name: Juliana Marie B. Juanillas Section: 12-ABM A

Worksheet 2.

Instruction: Refer to your Business Finance textbook. Read Chapter 1, Introduction to Financial
Management on pages 1-12 and answer the following questions.

1. Give at least three important reasons why the board of directors is the highest policy-making
body in the corporation?
 The first is that they ensure the proper functioning of the company by collectively
detecting the company's affairs while meeting the appropriate interests of its
shareholders and relevant stakeholders.
 They defined their strategic direction, mission, vision, and values.
 They are also responsible for their investment, structure, and dividend policies.

2. How is a director elected in the board of directors?

-The persons who originally incorporate the business—typically the founders—appoint the
board of directors. Once shareholders vote, those members are either re-elected or
removed.
3. Identify the four important roles of a finance manager and explain each function briefly
 The Four important roles of finance manager are:
 Fund raising-Cash and liquidity are critical components of successful
company financing. The organization can raise funding using either stock
shares or debentures.
 Allocation of the funds in the right place-The next big step is to properly
allocate the monies after they have been raised. Allocating monies is
once again the responsibility of a financial manager. When allocating
cash, the management should examine the company's size and growth
potential.
 Profit and its planning-Aside from client happiness, the primary goal of
every firm is to make a profit. Profit provides a motive for the company to
stay in business and thrive.

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 Universidad de Sta. Isabel | Basic Education Department
 Considering the capital market- The stock exchange market is constantly
trading shares, which entails significant risks. A financial manager must
be well-versed in the capital market in order to protect the organization
against such hazards.

Name: Juliana Marie B. Juanillas Section: 12-ABM A

Formative Assessment: Write your answer in your NoteBook

Worksheet 3. List the important concepts you have learned from your readings.

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