Fundamental of Financial

Management
MOTIVATION

Finance in Everyday Life

 At the end of this lesson, the students can:

►Define finance and financial management

►Describe the different branches of finance
►Discuss finance management vis-à-vis the over all business
environment
►Have an appreciation of what the overall objective of financial
management should be
 What is Finance?

Finance can be defined as the science and art of managing money.

(Gitman & Zutter, 2012)

►To provide fund

►A field in business and economics, finance is the allocation of scarce

resources which includes money.
 What is financial Management?

►It covers the planning, organizing, leading, and controlling all

financial activities of an organization.
►It puts emphasis on managing the funds or an organization which
includes day-to-day operations, investment decision, and
financing those investments.
 Branches of Finance

Public Finance – deals with the collection of taxes and

budget of a local municipality for programs designed to
benefit the general public and the production and
distribution of public goods.
 Branches of Finance

Personal Finance – It compasses everything that pertains to

personal financial planning, including coming up with a budget
that matches one’s short and long-term needs, creating a savings
plan for contingencies, investing in financial products which are
often intended for retirement, and investing for the purpose of
maximizing wealth.
 Branches of Finance

Corporate Finance – is primarily concerned with the

management of all the financial activities of an enterprise or a
business organization. The ultimate goal of corporate finance is
to maximize shareholder value through sound financial
planning.
Interrelated areas of Corporate Finance

1. Financial Markets and Institutions

2. Investments
3. Financial Services
4. Managerial (Business) Finance
 Relationship between Accounting and
Finance

Managerial Accounting Financial Accounting

- Provides financial data which are
intended to help internal users in
making decisions about the future of
the organization.
- Keeps track of all the historical
transactions of a business which will
then be used in the preparation of
reports intended for the use of
external parties such as government
agencies, invertors, and creditors.
Questions and Clarifications
Asynchronous time
THINGS TO DO
Part 1

►Answer the reflection activity posted in

your google classroom.
►You can only take the quiz up to 11:59
pm of today’s date.
PART 2