Business Finance 1st Quarter (Periodical)
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Questions and Answers

Which of the following attributes is NOT mentioned as an attribute of competent managers?

  • Decisive
  • Innovative (correct)
  • Visionary
  • People-oriented

    • What is the role of financial management according to the text?

  • To maximize the value of shareholders' wealth
  • To make decisions that maximize the market's perception of the company
  • To maximize the value of shares of stocks (correct)
  • To make decisions that influence the share price

    • Which of the following is NOT an uncontrollable or external factor mentioned in the text?

  • Flow of foreign funds invested in the Philippine stock market
  • Prospects of the industry (correct)
  • General market sentiment
  • Economic conditions

    • According to the text, what should business owners do to appeal to customers?

    <p>Make their product of good quality</p> Signup and view all the answers

    What is the goal of financial management according to the text?

    <p>To maximize the value of shareholders' wealth</p> Signup and view all the answers

    Which of the following attributes is NOT mentioned as an attribute of competent managers?

    <p>Analytical</p> Signup and view all the answers

    What does financial management aim to maximize according to the text?

    <p>Shareholders' wealth</p> Signup and view all the answers

    Which of the following is an uncontrollable or external factor mentioned in the text?

    <p>Economic conditions</p> Signup and view all the answers

    What should business owners do to appeal to customers according to the text?

    <p>Improve product quality</p> Signup and view all the answers

    What do economic conditions refer to according to the text?

    <p>State of the economy</p> Signup and view all the answers

    Which of the following attributes is NOT mentioned as an attribute of competent managers?

    <p>Goal-oriented</p> Signup and view all the answers

    What is the goal of financial management according to the text?

    <p>Maximize the value of shareholders' wealth</p> Signup and view all the answers

    What do economic conditions refer to according to the text?

    <p>The present state of the economy in a country or region</p> Signup and view all the answers

    What should business owners do to appeal to customers according to the text?

    <p>Make their product of good quality</p> Signup and view all the answers

    Which of the following is an uncontrollable or external factor mentioned in the text?

    <p>Economic conditions</p> Signup and view all the answers

    Which of the following is true about preferred stockholders?

    <p>They have priority over common stockholders in terms of claims over company assets.</p> Signup and view all the answers

    What is the main difference between primary and secondary markets?

    <p>Primary markets involve the issuance of new securities, while secondary markets involve the trading of pre-owned securities.</p> Signup and view all the answers

    What is the main function of commercial banks?

    <p>To provide commercial loans to firms and personal loans to individuals.</p> Signup and view all the answers

    What is the main function of mutual funds?

    <p>To enable small investors to enjoy the benefits of investing in a diversified portfolio of securities.</p> Signup and view all the answers

    What is the main function of pension funds?

    <p>To receive payments from employees and invest the proceeds on their behalf.</p> Signup and view all the answers

    Which of the following is true about preferred stockholders?

    <p>Preferred stockholders have priority over common stockholders in terms of claims over the assets of a company.</p> Signup and view all the answers

    What is the main function of commercial banks?

    <p>To provide commercial loans to firms and personal loans to individuals.</p> Signup and view all the answers

    What is the main difference between primary and secondary markets?

    <p>Primary markets involve the issuance of new securities, while secondary markets involve the trading of pre-owned securities.</p> Signup and view all the answers

    What is the main function of pension funds?

    <p>To receive payments from employees and invest the proceeds on their behalf.</p> Signup and view all the answers

    What is the main goal of financial management according to the text?

    <p>To maximize the return on investment for shareholders.</p> Signup and view all the answers

    Which of the following statements about preferred stockholders is true?

    <p>Preferred stockholders have priority over common stockholders in the distribution of assets during liquidation.</p> Signup and view all the answers

    What is the main function of insurance companies?

    <p>To pool insurance premiums and invest the proceeds in various securities.</p> Signup and view all the answers

    What is the main goal of mutual funds?

    <p>To enable small investors to enjoy the benefits of investing in a diversified portfolio of securities.</p> Signup and view all the answers

    What is the main function of pension funds?

    <p>To receive payments from employees and invest the proceeds on their behalf.</p> Signup and view all the answers

    What is the main difference between primary and secondary markets?

    <p>Primary markets involve the issuance of new securities, while secondary markets involve the trading of pre-owned securities.</p> Signup and view all the answers

    Which vice president is responsible for formulating marketing strategies and plans?

    <p>VP for Marketing</p> Signup and view all the answers

    What is one of the responsibilities of the VP for Production?

    <p>Ensuring production meets customer demands</p> Signup and view all the answers

    What is one of the functions of the VP for Finance?

    <p>Financing</p> Signup and view all the answers

    What is the role of a financial manager in relation to cash dividends?

    <p>Determining when the company should declare cash dividends</p> Signup and view all the answers

    What must exist for a company to be able to declare cash dividends?

    <p>Enough retained earnings and cash</p> Signup and view all the answers

    Which vice president is responsible for coordinating the functions of administration, finance, and marketing departments?

    <p>VP for Administration</p> Signup and view all the answers

    What is one of the responsibilities of the VP for Production?

    <p>Ensuring production meets customer demands</p> Signup and view all the answers

    What is the main function of the VP for Finance?

    <p>Making decisions on how to fund long term investment and working capital</p> Signup and view all the answers

    What is one of the responsibilities of the VP for Marketing?

    <p>Performing market and competitor analysis</p> Signup and view all the answers

    What must exist for a company to be able to declare cash dividends?

    <p>The company must have enough retained earnings</p> Signup and view all the answers

    Which vice president is responsible for coordinating the functions of administration, finance, and marketing departments?

    <p>VP for Administration</p> Signup and view all the answers

    Which vice president is responsible for formulating marketing strategies and plans?

    <p>VP for Marketing</p> Signup and view all the answers

    What is the main function of insurance companies?

    <p>Making decisions on how to fund long term investment and working capital</p> Signup and view all the answers

    What is the goal of financial management according to the text?

    <p>Maximizing the utilization of the company’s production facilities</p> Signup and view all the answers

    What must exist for a company to be able to declare cash dividends?

    <p>Enough retained earnings and cash</p> Signup and view all the answers

    Study Notes

    Financial Management

    • Financial management aims to maximize shareholder wealth and ensure a company's financial stability.
    • The goal of financial management is creating long-term value through prudent financial planning and effective resource allocation.
    • To declare cash dividends, a company must have sufficient retained earnings and meet other financial criteria.

    Competent Managers

    • Competent managers possess critical attributes such as decision-making ability, leadership skills, and effective communication.
    • Certain attributes are mentioned as essential for competent managers, while others may not be included.

    Economic Conditions

    • Economic conditions refer to external factors that influence business operations, such as inflation rates, employment levels, and economic growth.

    Business Strategies

    • Business owners should focus on understanding customer needs and preferences, tailoring offerings to enhance customer satisfaction.

    Uncontrollable Factors

    • Uncontrollable external factors include economic conditions, competitors, and regulatory changes that impact business operations.

    Financial Instruments and Institutions

    • Preferred stockholders have priority over common stockholders in dividend payments but do not typically have voting rights.
    • The primary market is where new securities are issued and sold, while the secondary market is for trading existing securities.

    Functions of Financial Entities

    • Commercial banks primarily provide loans and safekeeping for deposits, facilitating everyday financial transactions.
    • Mutual funds pool investors' money to purchase diversified portfolios of stocks and bonds aiming for capital appreciation and income.
    • Pension funds manage retirement savings to provide income for beneficiaries upon retirement.
    • Insurance companies primarily underwrite risk and provide financial protection against unforeseen events.

    Management Roles

    • The Vice President for Finance oversees the financial operations and strategies within a company.
    • The VP for Production is responsible for overseeing the production processes and ensuring efficiency in manufacturing.
    • The VP for Marketing formulates and implements marketing strategies to enhance brand awareness and drive sales.
    • A VP must coordinate various departments (administration, finance, marketing) to ensure aligned objectives and effective communication.

    Cash Dividends

    • A company must have enough profit and retained earnings to declare cash dividends, reflecting its financial health and capacity to return capital to shareholders.

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    Description

    Test your knowledge of finance terminologies with this quiz! From budgeting to investments, this quiz covers essential terms that every finance enthusiast should know. Challenge yourself and see how well you understand the language of finance.

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