The document outlines the key components of business finance, defining finance as the management of money both in business and personal contexts. It describes the roles and responsibilities of financial managers and other organizational leaders, emphasizing the goal of maximizing shareholder wealth through informed decision-making. Additionally, it explains financial institutions, instruments, and the importance of effective financial management in achieving overall corporate objectives.

1. BUSINESS FINANCE

2. OBJECTIVES: Ath the end of the lesson; you
should able to:
Define Finance
Describe who are responsible for financial management within an
organization
Describe the primary activities of the financial manager
Describe how the financial manager helps in achieving the goal
of the organization
Describe the role of financial intitutions and markets

3. IMPORTANCE TO YOU
Do you believe that finance is everyday?
Do you experience short of cash?
How much is your extra money?

4. You will become financial literate in all
aspect of life. This subject will answers all
the previous question I have given to you

5. What is finance and financial management?
FINANCE- is always of great importance, be it in a
business or in one’s everyday life.
FINANCE as the science and art of managing money.
It is important to manage risks in business, it is equally
important to manage risk in life as well.

6. FINANCIAL MANAGEMENT- deals with that decisions that are
supposed to maximize the value of shareholder’s wealth. These
decisions will ultimately affect the market’s perception of the
company and influence the share price.
GOAL- maximize the value of shares of stocks.
MANAGERS- are responsible for making the decisions for the
company that would lead towards shareholdre’s wealth
maximization.

7. ROLES OF EACH POSITION
SHAREHOLDERS- Elect the Board of Directors (BOD).
Each share held is equal to one voting right.
BOARD OF DIRECTORS- is the highest policy making
body in a corporation. The board’s primary
responsibility is to ensure that the corporation is
operating to serve the best interest of the
stockholders.

8. RESPONSIBILITIES OF BOARD OF
DIRECTORS
 Setting policies on investments, capital structure and dividend policies.
 Approving company’s strategies, goals and budgets.
 Appointing and removing members of the top management including
the president.
 Determining top management’s compensation.
 Approving the information and other disclosures reported in the
financial statements.

9. PRESIDENT RESPONSIBILITIES
 Approving the information and other disclosures reported in the
financial statements. Performing all areas of management: planning,
organizing, staffing, directing and controlling.
VP FOR MARKETING-
a. Formulating marketing strategies and plans. Directing and coordinating
company sales.
b. Performing market and competitor analysis.
c. Analyzing and evaluating the effectiveness and cost of marketing
methods applied.
d. Conducting or directing research that will allow the company identity
new marketing opportunities which are already offered in the market.
e. Promoting good relationships with costumers and distributors.

10. VP for PRODUCTION RESPONSIBILITIES
a.Ensuring production meets customer demands.
b.Identifying production technology/ process that
minimizes production cost and make the company
cost competitive.
c. Coming up with a production plan that maximizes
the utilization of the company’s production facilities.
d.Identifying adequate and cheap raw material
suppliers.

11. VP FOR ADMINISTRATION
RESPONSIBILITIES
a. Coordinating the functions of administration, finance, marketing
departments.
b. Assisting other departments in hiring employees.
c. Providing assistance in payroll preparation, payment of vendors, and
collection of receivables.
d. Determining the location and the maximum amount of office space
needed by the company. Identifying means, processes, or systems that
will minimize the operating costs of the company.
The role of the VP for Finance/ Financial Manager is the determine the
appropriate capital structure of the company.

12. Capital Structure- refers to how much
of your total assets financed by debt
and how much is financed by equity.

13. FUNCTIONS OF FINANCIAL
MANAGERS
1. Financing Decisions- include making decisions as to how to finance long-
term investments and working capital- which deals with the day to day
operations of the company.
2. Investing Decisions- To minimize the probability of failure, long-term
investments have supported by a capital budgeting analysis.
3. Operating Decisions- deal with the daily operations of the company
especially on how to finance working capital accounts such as accounts
receivable and inventories.
4. Dividend Policies- Dividend is a part of profits that are available for
distribution, to equity shareholders. The finance manager must decide
whether the firm should distribute all the profits or retain them or
distribute a portion and retain the balance.

14. Difference between financial instruments,
financial institutions and financial markets
1. Financial Institutions are companies in the financial sector that
provide a broad range of business and services including
banking insurance and investment management.
Examples of financial institutions
1. Commercial Banks
2. Insurance Companies
3. Mutual Funds
4. Pension Funds

15. Financial Instruments is areal or virtual document representing a legal
agreement involving some sort of monetary value. These can be debt
securities like corporate bonds or equity like shares of stock. When a
financial instrument issued, it gives rise to a financial asset on one hand
and a financial liabilityor equity instrument on the other.
a. Financial Asset is any asset that is:
 Cash
 An equity instrument of another entity
 A contract right to receive cash or another financial asset from another
entity.
 A contractual right to exchange instruments with another entity under
conditions that are potentially unfavorable.