Learning Module in

Business Finance 12
Quarter 1, Week 1
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Topic:
Task Analysis:
A. Code:
B. Learning Outcomes: At the end of the lesson, students will be able to:
a. Define finance;
b. Explain the major role of financial management and the different
individuals involved

Hello everyone! I am Teacher Fina! I will be your

facilitator for your Business Finance class.

This course deals with the fundamental principles, tools

and techniques of the financial operation involved in
the management of business enterprise.

In this module, you will learn what is finance and

explain the major role of financial management and
the different individuals involved.

Let us start!

Recently, the world has been affected with the pandemic, COVID-19. During
this time most of the households are quarantined and are not allowed to get out. How
were your family able to manage the needs of the family? Below is an inventory form
of the need and wants of your family during this time. List down all your needs and
wants and the amount in a monthly basis.

Needs Amount in
Pesos
1
2
3
TOTAL
Wants Amount in Peso
1
2
3
TOTAL
Net Amount
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Guide Questions:
1. What are the needs of your family during the pandemic? How about the
wants?
2. What are the sources of income of your parents?
3. Did your parents manage the resources they have? How can you say so?

Your parents are always having a hard time managing the

resources they have. And what they are doing involves
decisions on where to use the family’s resources and look
for other funds to suffice the need of the family. So as into
business. This is what FINANCE is all about.

Let us start with our journey with Business Finance.

Are you ready? Let us start with the next Activity.

Do I Have Enough?

Most of the families during the pandemic received SAP from DSWD as a help to
affected areas. Assuming your family received an amount of PhP 8,000. Based on
the first activity we had, using the same needs and wants and listed amounts. Answer
the following questions:

1. How much is the total peso amount for needs? How about for wants?
2. Is it enough or it is not?
3. If it is enough, how much is the excess?
4. If it is not? How much is the deficit?
5. If you are to cross-out an item to cover the given amount, what will you
cross-out?
6. If you are to purchase all the items on the list including the ones you
crossed-out, how much cash would you need to support all the expenses?
7. What other sources of cash you know?
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Now, how many of you have excess and those who have
deficits after summing up the needs and wants and
subtract it against your families SAP?

Very well said!

In our case Miss Fina,

our needs and wants
had exceed to the
Well, Miss Fina it is always a
I had an excess Miss money we had. But if
practice in our family to
Fina! Since we had a we will minimize our
purchase only the needs
small family so it is just wants. Probably, it is
rather than the wants. We
enough. enough.
buy things that we like if we
have excess, but in this
pandemic it just enough to
suffice our needs.

If you are to cross-out an item to cover the amount,

what will you cross-out?

Great job! Through that you were able to decide

base on the amount provided for you to use.

Cellphone
More on
load and
the wants,
flowering
Miss!
plants. Soft drinks
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What other sources of Our activity talks all about

cash you know? FINANCE DECISION which is
also mostly practiced in
business enterprises I
Very good! All your acquiring more cash funds
answers are good to support the business
sources of income! operation.

Save money
Borrow money from Buy and sell
in the piggy
neighbors, Miss Fina! products for
bank or
some banks. profit.

FINANCE is defined as the science and art of managing money. (Gitman & Zutter, 2012).
It is also defined as the management of money and includes activities such as investing,
borrowing, lending, budgeting, saving, and forecasting. (https://corporatefinanceinstitute.com)

FINANCE DECSION – deals with racing or acquiring of funds from outside sources and
not from the ordinary results of business operation. In other words, financing decisions
are made when the business needs to borrow money.

In a planned transportation business, Jen intends to buy a utility vehicle

to transport passengers from La Castellana to Bacolod City. She has to decide
whether to buy a 15-seater, a 30-seater, or a 50-seater transport vehicle.
Further, Jen has to decide what financing structure to use in buying the vehicle.

a. What asset should Jen acquire?

b. What scheme should she use to acquire the asset?
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What asset should Jen acquire?

Very good Mike! How will likely she

can acquire the utility vehicle?

That is correct Lou and Mara, your

answers are some schemes that Jen
should consider to acquire the asset.
And that decision that she will do is a
port of what we call as FINANCIAL
MANAGEMENT.

She should consider borrowing

money from a lending
She can as well borrow money
institution.
from the bank and use it to buy
the vehicle.

She will buy utility vehicle for her

planned business Miss Fina.

FINANCE MANAGEMENT – is focused on capital budgeting decision or investment

decision on acquisition of assets and its corresponding financing scheme.

THE ROLE OF FINANCIAL MANAGEMENT

• To ensure regular and adequate supply funds.
• To ensure returns to shareholders through capital gains which is which are
dependent upon the earning capacity and the market price of the share.
• To ensure optimum funds utilization at least cost.
• To ensure investment of funds in safe venture so that adequate rate of return can
be achieved.
• To design a sound capital structure by maintaining a fair composition of capital
through a balance between debt and equity capital.
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Jen has this Organizational Structure for her planned transportation business. Can you
help her placing the different positions in the structure?

Shareholders Board of Directors

Chief Executive Officer VP for Marketing

VP for Production VP for Administration

VP for Finance

Who will be placed on the top, second and the third

box?

Well said Mike! And the remaining four boxes are for
the four VPs or Vice Presidents. Do you agree?

Yes, Miss Fina! Exactly Miss!

Ok!

On the topmost
position are the
shareholders, followed
by the Board of
Directors and the Chief
Executive Officer.
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Take note class that the Shareholders and the Board of

Directors belongs to the owners while the Chief
Executive Officer and the Vice Presidents are the
under the management positions.

And all of them are the individuals involved in the

Financial Management.

Do you understand?

Yes Miss! Yes Miss! Yes Miss! Yes Miss!

INDIVIDUALS INVOLVED IN FINANCIAL MANAGEMENT

1. The senior leaders of an organization are responsible for all aspects of its financial
health. They are the ones understands the unit’s financial situation and do not allow
unintended deficits to occur. They are accountable for the resources entrusted to them
that includes the funds, facilities and recruitment of employees, even if the control and
tasks have been delegated to their staff, under command of responsibilities.
Example: Shareholders, and Board of Directors.

2. Unit heads are responsible for their internal financial management and to develop
budgeting, financial reporting and management practices. Units are encouraged to
develop an oversight process that builds on best practices. (De Guzman, 2019)
Example: Chief Executive Officer, VP for Production, Marketing, Finance,
Administration and the likes.
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Multiple Choice. Select the best answer. Letters only.

_____ 1. The main aim of financial management is to increase ___________.

a. sales revenue c. shareholders’ wealth
b. market share d. profit

_____ 2. Who is the one responsible in making investment, financial and dividend
policy-making decisions of the firm?
a. Creditors c. Employees
b. Finance manager d. Supplier

_____ 3. One right goal for managers is to ___________.

a. maximize their own remuneration and perks
b. improve working condition of employees
c. maximize shareholders’ wealth
d. increase the market share

_____ 4. Which is concerned with allocating, raising and controlling of the funds of the
firm?
a. Finance c. Financial Management
b. Budgeting d. Accounting

_____ 5. Which is one of the ultimate goals of the finance manager?

a. Maximize market price of shares of stocks
b. Maximize liabilities
c. Maximize profit
d. Maximize asset

Look for a business enterprise in your neighborhood and ask the following question:

1. Who is involved in the financial management of the business?

2. What are the other source of funds of the business?
3. Why financial management is essential in their business operation?
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Online References:
• https://corporatefinanceinstitute.com. Retrieved on July 7, 2020
• https://www.vectorstock.com/. Retrieved on July 6, 2020
• https://www.needpix.com/photo/. Retrieved on July 6, 2020
• https://www.kissclipart.com/. Retrieved on July 6, 2020
• https://www.inspizone.com/. Retrieved on July 6, 2020
• https://www.onlinewebfonts.com/. Retrieved on July 7, 2020

Book References:
• Teaching Guide for Senior High School BUSINESS FINANCE – Published by
Commission on Higher Education, 2016 ©, Chairperson: P.B. Licuanan, Ph. D.
• Business Finance for Senior High School, De Guzman, A.A., (2019), Lorimar
Publishing, Inc.
• Business Finance in the Philippine Setting for Senior High School, Aduana, N.L.,
(2017), C&E Publishing, Inc.

Assessment:

1. C
2. B
3. C
4. C
5. A

Enrichment:

1. Owner and other managerial positions

2. Borrow money from lending institutions, carry-out loans from the bank and
generate more profit through selling, investing and saving.
3. To maximize business capitalization/ market price of stocks.