The banking and finance sector performs a critical function in the Philippine economy as it is primarily responsible for the mobilization of domestic savings and the conversion of these funds into directly productive investments.

The following are examples of Informal lenders except:

The following are examples of Formal lenders except:

The following are components of Financial Institutions except:

Reduces risk is one of the roles of financial system.

Assist in capital formation is one of the roles of financial system.

Improves standard of living is one of the roles of financial system.

capital formation is one of the functions of financial system.

Mobilization of funds is one of the functions of financial system.

Provides liquidity is one of the functions of financial system.

Managers are responsible for the financial health of an organization.

.They produce financial reports, direct investments activities and develop strategies and plans for the long term financial goals of their organization.

Financial Manager is not critical to a business’s success. They help organizations make informed and data-driven financial decision. They often work closely with other within the company such as branch managers, chief officers, supervisors, and other company stakeholders to help plan the company long term goals and projects

Function of Financial manager.

Function of Financial manager.

The following are Methods of Financial Analysis except:

It is the process of Planning and Management of long term and short term investments of an organization.

An important decision which finance manager has to take in deciding source of finance.

A company can raise finance from various sources such as by issue of shares.

This is Concerned with contributions of surplus funds. The profit of the firm is distributed among various parties such as debenture holders, and etc.

Forecasting Future Profit,

Allocation of Funds and Resources, and

Take care of the Shareholders are other roles of financial managers.

The CEO of a toothpaste company wants to introduce a new product: toothbrushes. She'll call on her team to estimate the cost

of producing the toothbrushes and the financial manager to determine where those funds should come from—for example, a bank loan. This is an example of financial management

The goal of the firm is to maximize the profit.

This involves the evaluation of risk, measurement of cost of capital and estimation of expected benefits

from a project. Capital budgeting and liquidity are the two major components of investment decision. Capital budgeting is concerned with the allocation of capital and commitment of funds in permanent assets which would yield earnings in future.

It is related to the investment in current assets and current liabilities. Current assets include cash, receivables, inventory, short-term securities, etc. Current liabilities consist of creditors, bills payable, outstanding expenses, bank overdraft, etc. Current assets are those assets which are convertible into a cash within a year. Similarly, current liabilities are those liabilities, which are likely to mature for payment within an accounting year.

In order to achieve the wealth maximisation objective, an appropriate dividend policy must be developed. One aspect of

dividend policy is to decide whether to distribute all the profits in the form of dividends or to distribute a part of the profits and retain the balance. While deciding the optimum dividend payout ratio.

While the investment decision involves decision with respect to composition or mix of assets, financing decision is concerned with

the financing mix or financial structure of the firm. The raising of funds requires decisions regarding the methods and sources of finance, relative proportion and choice between alternative sources, time of floatation of securities, etc. In order to meet its investment needs, a firm can raise funds from various sources.

TAXES MATTER

YOU CAN'T JUST EVALUATE AN INVESTMENT PURELY IN TERMS OF EXPECTED RETURN; YOU HAVE TO KEEP TAXES IN MIND.

PEOPLE ARE CREATURES OF DEFAULTS. WE TEND TO TAKE THE EASY PATH UNTIL WE ARE MOTIVATED ENOUGH, EITHER BY FEAR OR DESIRE, TO CHANGE. FOR MANY OF US, OUR DEFAULT LIFESTYLE WOULD BE QUITE PASSIVE, LACKING THE DISCIPLINE TO EXERCISE AND EAT HEALTHILY. IT IS ONLY WHEN WE HAVE CRINGED ENOUGH LOOKING IN THE MIRROR, BEEN MOTIVATED BY SOMEONE ELSE, OR SEEN THE POOR EFFECTS OF AN UNHEALTHY LIFESTYLE ON OURSELVES OR SOMEONE WE KNOW, THAT WE ARE MOTIVATED TO CHANGE.

_____is calculated by subtracting current liabilities from current assets, as listed on the company’s balance sheet.

______means the company can pay its bills and invest to spur business growth.

______focuses on ensuring the company can meet day-to-day operating expenses while using its financial resources in the most productive and efficient way.

______period measures how efficiently a company manages accounts receivable, which directly affects its working capital.

______is an indicator of how efficiently a company manages inventory to meet demand.

______include cash, accounts receivable and inventory.

______include accounts payable, taxes, wages and interest owed.

_____snapshot of the company’s assets, liabilities and shareholders’ equity at a moment in time, such as the end of a quarter or fiscal year.

A company with ______may have trouble paying suppliers and creditors and difficulty raising funds to drive business growth.

_____including money in bank accounts and undeposited checks from customers.

______such as short-term loans to customers or suppliers — maturing within one year.

______including raw materials, work in process and finished goods.

_____the amount of cash and cash equivalents that moves in and out of the business during an accounting period.

A company’s cash flow affects its amount of working capital. If revenue declines and the company experiences negative cash flow as a result, it will draw down its working capital.

The terms “working capital” and “net working capital” are synonymous: Both refer to the difference between all current assets and all current liabilities.

However, some analysts define net working capital more narrowly than working capital.

current assets (less cash) - current liabilities (less debt) = _______

For most companies, working capital constantly fluctuates; the balance sheet captures a snapshot of its value on a specific date.

Positive working capital means you have enough liquid assets to invest in growth while meeting short-term obligations, like paying suppliers and making interest payments on loans.

Analysts and lenders use the current ratio (working capital ratio) as well as a related metric, the quick ratio, to measure a company’s liquidity and ability to meet its short-term obligations.

A business may wish to increase its working capital if it, for example, needs to cover project-related expenses or experiences a temporary drop in sales. Tactics to bridge that gap involve either adding to current assets or reducing current liabilities.

-Are those which have direct relationship with a unit of operation like manufacturing a Product, organizing a process or an activity.

Are those which cannot be easily and definitely identifiable in relation to a plant, a product, A process or a department.

Are the costs that do not vary with the change in output. In other words, fixed costs are those Which are fixed in volume though there are variations in the output level.

Are those that are directly dependent on the output i.e.., they vary with the variation in the volume/level of output.

-These costs are which vary with the variation in the output with size of the firm as same.

These cost are which incurred on the fixed assets like land and building, plant and machinery etc.

THE PAYBACK PERIOD IS CALCULATED BY DIVIDING THE AMOUNT OF THE INVESTMENT BY THE ANNUAL CASH FLOW.

ACCOUNT AND FUND MANAGERS USE THE PAYBACK PERIOD TO DETERMINE WHETHER TO GO THROUGH WITH AN INVESTMENT.

ONE OF THE DOWNSIDES OF THE PAYBACK PERIOD IS THAT IT DISREGARDS THE TIME VALUE OF MONEY.

ALTHOUGH CALCULATING THE PAYBACK PERIOD IS USEFUL IN FINANCIAL AND CAPITAL BUDGETING, THIS

METRIC HAS APPLICATIONS IN OTHER INDUSTRIES. IT CAN BE USED BY HOMEOWNERS AND BUSINESSES TO CALCULATE THE RETURN ON ENERGY-EFFICIENT TECHNOLOGIES SUCH AS SOLAR PANELS AND INSULATION, INCLUDING MAINTENANCE AND UPGRADES.

CAPITAL BUDGETING IS A KEY ACTIVITY IN CORPORATE FINANCE. ONE OF THE MOST IMPORTANT

CONCEPTS EVERY CORPORATE FINANCIAL ANALYST MUST LEARN IS HOW TO VALUE DIFFERENT INVESTMENTS OR OPERATIONAL PROJECTS TO DETERMINE THE MOST PROFITABLE PROJECT OR INVESTMENT TO UNDERTAKE. ONE WAY CORPORATE FINANCIAL ANALYSTS DO THIS IS WITH THE PAYBACK PERIOD.

HERE’S A HYPOTHETICAL EXAMPLE TO SHOW HOW THE PAYBACK PERIOD WORKS. ASSUME COMPANY A INVESTS $1 MILLION IN A PROJECT THAT IS EXPECTED TO SAVE THE COMPANY $250,000 EACH YEAR. IF WE DIVIDE $1 MILLION BY $250,000, WE ARRIVE AT THE PAYBACK PERIOD OF FOUR YEARS FOR THIS INVESTMENT.