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The finance function
The finance function
The finance function
The finance function
The finance function
The finance function
The finance function
The finance function
The finance function
The finance function
The finance function
The finance function
The finance function
The finance function
The finance function
The finance function
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The finance function

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The presentation focuses on "Finance Function" specifically the following topics: a. the primary goals of business b. the functions of Business Finance and Investment Portfolio c. and the primary …

The presentation focuses on "Finance Function" specifically the following topics: a. the primary goals of business b. the functions of Business Finance and Investment Portfolio c. and the primary activities of Financial Manager.

Published in: Business, Economy & Finance
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  • 1. The Finance Function Juan Raul Relloso MBA Ateneo de Naga University January 27, 2014
  • 2. Objectives: •Identify the primary goals of business •Discuss the functions of Finance and investment portfolio • Describe the primary activities of Financial Manager
  • 3. Primary Goals • To earn profit Funds are invested in a business to earn sufficient return on investment. ROI=Net Income (Profit-Depreciation)/Average Capital (Equity Capital)
  • 4. Primary Goals • To increase its own value as an economic entity Growth Increase in Assets, improved production capacity, increase in sales volume and increase in owners’ equity Stability Ability to continue operations despite anticipated risks in a business
  • 5. Primary Goals • To improve the quality of life in the community  Increase in Business creates chain of effects of business activities (multiplier effect) >business activities > sales > productions > employment> money to spend
  • 6. Social Responsibility of Businessmen • Improvement of the quality of life in the community Improve the economy and its environment  Refrain from increasing the price of the product in order to contribute to the social objective of preventing inflation  Spend to reduce pollution caused by the business to protect and improve the environment  Provide opportunities for employment to financially challenge individuals to reduce poverty in the community
  • 7. What is Business Finance? •Business Finance “art and science of managing the financial resources of a business”
  • 8. Functions of Business Finance •Allocation of Financial Resources Funds are channelled to activities that are considered profitable.
  • 9. Functions of Business Finance •Procurement of Funds Capital – at the least cost when it is needed Awareness of the different sources of funds
  • 10. Functions of Business Finance •Efficient utilization of financial resources Economical use Financial resources are used for what they have been intended.
  • 11. Functions of Business Finance •Effective utilization of financial resources Refers to their use towards  The attainment of predetermined objectives  Requires periodic review of operation
  • 12. Investment Portfolio •Aggregate of assets held as investments by an organization or individual o stocks o bonds o money market placements o real estate o precious stones and metals
  • 13. The Financial Manager - Primary Activities • Financial planning and analysis o takes part in corporate, strategic and operational planning o makes projections based from accumulated data and different options open to management  revenue  cost & expenses  capital outlays  changes in company assets, liabilities and owners equity
  • 14. The Financial Manager - Primary Activities •Managing the firm’s assets o How much must be in the form of cash, receivables, inventories, and other current assets? o How much must be in plant, property and equipment? o What are the fixed assets to be acquired? o Which of the fixed assets already owned must be modified or replaced? o Are assets duly safeguarded? Who are accountable for them? o How effective is the internal control system in the company?
  • 15. The Financial Manager - Primary Activities •Financial planning and analysis •Managing the firm’s assets • Managing the firm’s liabilities and owners’ equity
  • 16. End of Presentation

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