Daraga National High School

Daraga, Albay
Senior High School
12 – ABM C

Compilation of Different Technical Terms

in Business Finance

Submitted by Group #
1. Francis Nathan Briones
2. Cyra Benasa
3. Jonalyn Antiquiera
4. Pauline Constantino
5. Forthly Ian Llaguno

Submitted to:
Mrs. Luhen Nuncia Magsayo
Business Finance Teacher
BUSINESS FINANCE TERMINOLOGIES

FINANCIAL MANAGEMENT
- Refers to the efficient and effective management of money to
achieve the objectives of organization.
- Takes care of the funds of a company.
- Financial management is also a method of planning decision in
order to optimize capital.

The knowledge and understanding of finance and accounting

that can help for effective financial decision.

FINANCE
- Finance as the science and art of managing money. (Gitman &
Zutter, 2012).
- Finance are funds or capital in the form of credits , loans or
invested capital.

BUSINESS FINANCE
- includes activities concerning the acquisition and conservation of
capital funds for meeting an organization’s financial needs and
objectives.
- The foundation in a business, requires purchases of assets, goods,
and raw materials.
BUSINESS
- Business is an organization or economic system where goods or
services are exchanged for another or for money.
- Considered as an economic activity.

FLOW OF FUNDS
- Flow of funds is the sum of all cash, inflows and outflows from
and into different financial assets.
- Reveals the reasons for these changes or anomalies in the financial
position of a company between two balance sheets.

FINANCIAL INSTITUTION, FINANCIAL INSTRUMENT AND

FINANCIAL MARKETS
o Financial Institution the economic entities that help individuals
and businesses with several financial services, enabling them to
deposit, save, invest, and manage their monetary resources.

o Financial Instrument is a real or virtual document representing a

legal agreement involving any kind of monetary value. 

Financial instruments may be divided into two types: cash

instruments and derivative instruments.

Financial instruments may also be divided according to an asset

class, which depends on whether they are debt-based or equity-
based.

o Financial Markets refer broadly to any marketplace where the

trading of securities occurs.
 Financial markets trade in all types of securities and are critical to
the smooth operation of a capitalist society.

FINANCIAL MANAGER
- Is a qualified person who does have lots of experience in handling
all the important financial functions of an organization.

EQUITY
- Is used to refer as personal finances.

DEBT
- Money borrowed by one party from another.

CAPITAL MARKETS
- Financial markets that bring buyers and sellers together to trade.

ROLE
- A part played by someone.

FUNCTION
- Duty or responsibility of someone or natural purpose of
something.
CAPITAL GAINS
- Refers to profits gain from sale of capital asset.

LEVERAGE
- Financial leverage results from using borrowed capital as a
funding source when investing to expand the firm’s asset base and
generate returns on risk capital.
- Also refers to the amount of debt a firm uses to finance assets.

DIVERSIFICATION
- Is a strategy that mixes a wide variety of investments within a
portfolio in an attempt to reduce portfolio risk.
- Diversification is most often done by investing in different asset
classes such as stock, bond, real estate or cryptocurrency.