Busfi

• Financial Management is defined as "the science and art of managing money" and involves functions like planning, organizing, leading, and controlling financial assets to achieve organizational goals
• The financial system facilitates the flow of funds or financial capital between savers and borrowers or investors, and includes components like financial institutions, markets, and instruments
• Financial institutions act as intermediaries, managing the efficient flow of funds between savers and borrowers, with examples like banks, insurance, and investment companies
• Financial markets provide a platform for financial managers to acquire funds from various sources, including capital markets for long-term securities and money markets for short-term securities
• The Philippine Stock Exchange (PSE) is an example of a capital market where the buying and selling of corporate stocks occurs
• Financial instruments are contracts that produce a financial asset for one party while creating a financial liability or equity instrument for another, with examples like corporate bonds, checks, futures, and shares of stock
• Wealth maximization aims to increase a business's value, which in turn increases the value of shares held by stockholders, considering risks, returns, growth, and survival
• Profit maximization focuses on short-term profits, which may increase at the expense of long-term profitability, potentially requiring borrowing to increase sales or expand production capacity
• The corporate organizational structure includes roles like the Board of Directors, President and CEO, VPs for Sales and Marketing, Production, Administration, and Finance or Chief Financial Officer (CFO)
• The Finance Department includes the Treasurer, responsible for external financing matters, and the Controller, in charge of internal accounting and financial records
• Financial managers make decisions on financing, investing, operations, and dividend policies, aiming to earn profit and have a positive return
• Financial statements like the income statement reflect data from operating, financing, and investing activities of a business
• Ratio analysis is a management tool that helps understand a firm's strengths and weaknesses, with liquidity ratios measuring the company's capability to convert assets into cash and pay debts
• Liquidity ratios include the current ratio, quick ratio, and cash ratio, each measuring the company's ability to pay off current or short-term liabilities with varying levels of asset liquidity
• Efficiency Ratios - measure how systematically a company utilizes its assets to generate profit
• Investing Activities - acquiring long-term investments such as capital expenditures, and sales of equipment or real estate
• Operating Activities - from business operations involved in producing and selling products and services

  reflect changes in the balance sheet
•  

  VP for Sales and Marketing - responsible for leading revenue and client portfolio activities of the company
• VP for Production -  leads the creation of goods and service
• 1.Financing Decisions - when, where, and how to acquire funds for the company
• • Dividend Policies how much should be distributed among the shareholders
• Investing Decisions - what investments would be profitable to the company
• Solvency Ratios - measure the company’s capability to
• Liquidity - the ease of converting an asset into cash

  • higher liquidity means lower risk of default in paying debts and obligations
• Current Ratio

  also known as the working capital ratio

  • measures the potential of the firm to pay off its current or short-term liabilities on time
• Profitability Ratios - measure a company’s potential to generate revenue from its operations

   

   
• current ration fourmula C+MS+AR+I divide CL
• • Dividend Policies how much should be distributed among the shareholders
• Quick ratio formula C+MS+AR divide CL
• Board of Directors - elected by shareholders

  • represents the shareholders in overseeing the business
•  Who facilitates and expedites the flow of funds or financial capital between savers and borrowers or investors from savings to investments?

      A. Financial Institutions . B. Financial Instruments

      C. Financial Management D. Financial Market

  C
• What is an organization that directs the transfer of financial resources from its source to potential users?

      A. Financial Institutions B. Financial Instruments

      C. Financial Management D. Financial Market

  A
• What is an organization that directs the transfer of financial resources from its source to potential users?

      A. Financial Institutions B. Financial Instruments

      C. Financial Management D. Financial Market

  A
• What contract produces a financial asset of one party while creating a financial liability or equity

                 instrument of another?

      A. Financial Institutions B. Financial Instruments

  b
• What contract produces a financial asset of one party while creating a financial liability or equity

                 instrument of another?

      A. Financial Institutions B. Financial Instruments

      C. Financial Management D. Financial Market

  B
• Operation Decisions - how to finance working capital accounts such as accounts receivables and inventories
• Financing Decisions - when, where, and how to acquire funds for the company
• VP for Finance or Chief Financial Officer (CFO) - manages acquisition of funds, investments, operating activities, and dividend policies
• Treasurer - handles external financing matters

  - responsible for managing the cash, investments, and other financial resources
• Efficiency Ratios - measure how systematically a company utilizes its assets to generate profit