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

Guide Card
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!

Motivation
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
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?
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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.

Activity 1
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?

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!


I had an excess Miss Fina!
Since we had a small
family so it is just enough.
What other sources of cash
you know?
Very good! All your answers
are good sources of income!
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In our case Miss Fina, our
needs and wants had
exceed to the money we
had. But if we will Well, Miss Fina it is always a
minimize our wants. practice in our family to
Probably, it is enough. purchase only the needs rather
than the wants. We 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
load and
More on the
flowering
wants, Miss!
plants.
Soft drinks
Our activity talks all about
FINANCE DECISION which is
also mostly practiced in
business enterprises I acquiring
more cash funds to support the
business operation.
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Borrow money from Save money in Buy and sell
neighbors, Miss Fina! the piggy bank products for
or some banks. profit.

Key Concepts

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.

Activity 2
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?

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 Page |5
she will do is a port of what we call as
FINANCIAL MANAGEMENT.

She should consider borrowing money

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

She will buy utility vehicle for her

planned business Miss Fina.

Key Concepts

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.

Activity 3
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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.

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?
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Yes Miss! Yes Miss! Yes Miss! Yes Miss!

Key Concepts

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.

Assessment
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?
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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

Enrichment

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?

Reference
s

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:
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 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.

Answer Key
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.