BUSINESS FINANCE WEEK 2

ACTIVITY 1: HOW ARE YOU FINANCE?

1. Shareholders

2. Board of directors

3. Financing decision

4. VP of finance

5. Capital structures

6. Assets

7. Investing

8. Short term investment

9. Long term investment

10. Operating decision

11. Short term source

12. Long term source

ACTIVITY 2: FUNCTIONAL OR NOT?

COOPERATE ORGANIZATION STRUCTURE

OWNERS

Shareholders – their responsibility is to carry out the objectives of the shareholders, Elect the

board of directors. Otherwise; they would not have been elected in that position.

Board of Directors – the highest policy making body in a corporation: The board’s primary

responsibility is to ensure that the cooperation is operating to serve the best interest of the stock

holders; setting policies on investments, capital structure and dividend policies , approving
company’s strategies goals and budgets, appointing and removing members of the top

management including president.

President or CEO – overseeing the operation of a company and ensuring that the strategies of

approved by the board are implemented as planned, performing all areas of management,

planning, organizing, staffing, directing and controlling, carries out the decision making and

representing the company.

MANAGERS

VP for Marketing – formulating marketing strategies and plans, directing and coordinating

company sales, performing market and competitors analysis, analyzing and evaluating the

effectiveness and cost of marketing method, applied, conducting research and promoting good

relationship with customer and distribution

VP for Finance – financing, investing, operating and dividend policies.

VP for production – ensuring production meets costumers demands, identifying production

technology/ process that minimizes production cost and make the company cost competitive,

coming up with a production plan that maximizes the utilization of the company’s production

facilities and identifying adequate and cheap raw materials supplies.

VP for Administration – coordinating the function of administrations, finance and marketing

departments, assisting other departments in hiring employees, providing assistance in pay

preparation, payment of vendors, and collection of receivables, determining the location and the

maximum amount of office space needed by the company and identifying means or systems that

will minimize the operating cost of the company.

ACTIVITY 3: BE RESPONSIBLE

1. Acquisition of funds with the least cost from the right sources at the right time;

- Acquisition finance refers to the different sources of capital that are used to fund a

merger of acquisition.

2. Effective cash management;

- Effective cash management allows the company to control its cash and manage its

business economically, efficiently, and effectively

3. Effective working capital management;

- Reduce inventory and increase inventory turnover

- Pay vendors on time and manage debtors effectively.

- Receive adequate financing

4. Effective inventory management ;

- Effective inventory will prioritize inventory, track all products information, audit

inventory, analyze supplier performance, it is the crucial piece of a business

profatibility.

5. Effective investment decision;

- Making effective investment decision is not the decision to spend money it is a

decision to say where am I going to get the best return.

6. Proper assets selection

- Asset allocation determines the mix of assets held in a portfolio, while security

selection is the process of identifying individual securities.

7. Proper risk management

- Analyze the risk once a risk has been identified, it needs to be analyzed