BUSFIN 1-3

• Finance- Management of money
• Areas of Finance: Private finance and Public finance
• Private finance- Private Individuals, Non-governmental organizations, and Private organizations
• Personal Finance- Management of personal resources of an individual.
• Business finance - Management of financial resources of a business organizations.
• Public finance - allocation of government income and government expenditure.
• Functions of a finance officer: Operating decision, Investment decision, financing decision
• Operating decision - Providing immediate solution
• Investment decisions - choosing small and large projects with several investment opportunities.
• Financing decisions - Raising or acquiring of funds from outside sources.
• Financial Management - Focuses on capital budgeting decision.
• Capital Market - Provide assistance to both private and public borrowers of funds.
• Financial Investment - business decisions about the value and price of stocks.
• Financial system - Flow of money.
• Financial Institutions - Organizations that provide financial services.
• 3 Types of financial institution: Depository Institution, Financial Intermediaries, and Investment Institutions
• Depository Institutions - accept deposits.
• Banks - They accept deposits and bills payment, provide loans, and facilitate the transfer funds domestically or abroad.
• Universal Bank - Biggest Bank
• Commercial bank - provides commercial loans and offer investment.
• Thrift Bank - savings and mortgage
• Rural Bank and Cooperative Bank - providing the people with basic financial services.
• Islamic bank - Muslim bank.
• Saving and Loan Association - accumulating the savings of its members.
• Trust Companies - acts as fiduciary agent
• Credit Union - mainly controlled and operated by its member.
• Financial Intermediaries - Act as the middle person.
• Mutual funds - accumulate money by selling shares and stocks or bonds.
• Pension funds - paying the pension requirements of all private sector employees who retire.
• Insurance Companies - Pooling together the proceeds of insurance policies.
• Investment Institutions - Companies engage in buying securities.
• Financial Market - selling-buying activity occurs.
• Trading Activity - selling-buying transaction happens.
• Capital Market - Stocks and bonds are issued for medium-term and long-term periods.
• PSE - Philippine Stock Exchange
• Money Market - short-term security.
• Commercial papers - Large companies
• Treasury bills - Government
• Primary Market - Corporations can issue new share of stocks.
• Secondary Market - Financial securities are traded among investors.