UPN, PASIÓN POR TRANSFORMAR VIDAS

PRINCIPLES OF FINANCE

English for business

Videoconference # 13

cesar.mejia@upn.pe UPN.EDU.PE
Session outline

What did you check and learn this week?

Areas of finances

Categories of finances

Principles of finances

Conclusions
Objective
You will be able to understand the principles of finance to apply them in
your company and in your life.

¿Cuál es la importancia
del tema de hoy o cómo
puede aportar en su
carrera?

Idalberto
Chiavenato
What did you check and learn this week?
-Qué revisaron y aprendieron de la plataforma?
Finance
Definition: Practice of acquiring and managing money. It’s the supervision and
study of money.

Importance: It’s an essential requirement in business. It allows to solve

unexpected problems, sales promotion, take business opportunities, among
others.
Areas of finance
Financial statement management (decision making
regarding the acquisition and use of funds)

Credit and money markets (financial institutions and

securities markets such as stocks and mutual funds)

Money investments (made by institutions and private

companies)
Categories of finance
-Personal finance (it depends on the person). Eg.: salary, taxes, banking, credits,
loans, insurances, etc.
-Corporate finance (for commercial purposes). Usually companies have an
exclusive department for supervising financial activities.
-Public finances: Management of funds for public use (government).
It’s your turn!
Complete the categories of finance:

It represents monetary decisions that are linked with the lives of the individuals
and their families.

When the funds are used for the benefit of a company.

It’s the government’s role in accelerating its country’s economy.

Principles of finance
1- Risk and return (higher risk – higher return).

2- Time value (the value of money decreases over time. Consider inflation. When investing the
rate of return must be bigger than the rate of inflation).

3- Cash flow (the earlier there’s an inflow of cash, the better for investors).

4- Profitability and liquidity (profitability is the money a company makes above expenses.
Liquidity is the possibility of a company to pay its obligations in the short-term).

5- Diversity (different investments are necessary, low risk and some high risk investments. This
diversity itself minimizes the risk).

6- The hedging principle of finance (take loans from appropriate sources, depending on the type
of funds you need, short-term or long-term sources).
It’s your turn!
Now explain the principles of finance in your words.
What did you learn today?
Use jamboard and type:
-What you learned today (mention the topics or vocabulary, you can do it
in Spanish)
 Conclusions
-Areas of finance: Financial statement management, credit and money markets, money
investments.
-Finance is ....
-Mention 3 principles of finance: …

Reflexión: Conociendo los

principios de finanzas
podrás tomar mejores
decisiones sobre el manejo
de dinero en tu empresa y
tu vida.
Do you have any questions?
 Mission accomplished!
✓ Now you understand the principles of finance to apply them in your
company and in your life.
 Next class:
We’ll do a review of the main topics that you need to know for the final evaluation.
 Go beyond! Additional resources:
✓ https://www.youtube.com/watch?v=JEVirFX6goE
✓ https://ordnur.com/academic-study/finance/principles-of-
finance/#:~:text=Principles%20act%20as%20a%20guideline,term%20and%20some%20long%20term.
✓ https://fintechweekly.com/magazine/articles/6-reasons-why-finance-is-important-in-today-s-
business#:~:text=term%20actually%20means%3F-
,Financial%20Management,it%20comes%20to%20making%20decisions.