Business Finance Quarter 3 Module 2 PDF

Business Finance Quarter 3 – Module 2: The Financial Planning Tools and Concepts Business Finance – Grade 12 Alternative Delivery Mode Quarter 3 – Module 2: The Financial Planning Tools and Concepts First Edition, 2020 Republic Act 8293, section 176 states that: No copyright shall subsis...

Business Finance Quarter 3 – Module 2: The Financial Planning Tools and Concepts Business Finance – Grade 12 Alternative Delivery Mode Quarter 3 – Module 2: The Financial Planning Tools and Concepts First Edition, 2020 Republic Act 8293, section 176 states that: No copyright shall subsist in any work of the Government of the Philippines. However, prior approval of the government agency or office wherein the work is created shall be necessary for exploitation of such work for profit. Such agency or office may, among other things, impose as a condition the payment of royalties. Borrowed materials (i.e., songs, stories, poems, pictures, photos, brand names, trademarks, etc.) included in this module are owned by their respective copyright holders. Every effort has been exerted to locate and seek permission to use these materials from their respective copyright owners. The publisher and authors do not represent nor claim ownership over them. Published by the Department of Education Secretary: Leonor Magtolis Briones Undersecretary: Diosdado M. San Antonio SENIOR HS MODULE DEVELOPMENT TEAM Author : Esmeralda P. Zulueta Co-Author – Language Editor : Lovella C. Atienza Co-Author – Content Evaluator : Arjay O. Serrano Co-Author – Illustrator : Ferdianne Antonie B. Bermudo Esmeralda P. Zulueta Co-Author – Layout Artist : Esmeralda P. Zulueta Team Leaders: School Head : Reynaldo B. Visda LRMDS Coordinator : Melbourne L. Salonga SDO-BATAAN MANAGEMENT TEAM: Schools Division Superintendent : Romeo M. Alip, PhD, CESO V OIC- Asst. Schools Division Superintendent : William Roderick R. Fallorin, CESE Chief Education Supervisor, CID : Milagros M. Peñaflor, PhD Education Program Supervisor, LRMDS : Edgar E. Garcia, MITE Education Program Supervisor, AP/ADM : Romeo M. Layug Education Program Supervisor, Senior HS : Danilo S. Caysido Project Development Officer II, LRMDS : Joan T. Briz Division Librarian II, LRMDS : Rosita P. Serrano REGIONAL OFFICE 3 MANAGEMENT TEAM: Regional Director : May B. Eclar, PhD, CESO III Chief Education Supervisor, CLMD : Librada M. Rubio, PhD Education Program Supervisor, LRMS : Ma. Editha R. Caparas, EdD Education Program Supervisor, ADM : Nestor P. Nuesca, EdD Printed in the Philippines by the Department of Education – Schools Division Office of Bataan Office Address: Provincial Capitol Compound, Balanga City, Bataan Telefax: (047) 237-2102 E-mail Address: [email protected]  Business Finance Quarter 3 – Module 2: The Financial Planning Tools and Concepts Introductory Message This Self-Learning Module (SLM) is prepared so that you, our dear learners, can continue your studies and learn while at home. Activities, questions, directions, exercises, and discussions are carefully stated for you to understand each lesson. Each SLM is composed of different parts. Each part shall guide you step-by- step as you discover and understand the lesson prepared for you. Pre-tests are provided to measure your prior knowledge on lessons in each SLM. This will tell you if you need to proceed on completing this module or if you need to ask your facilitator or your teacher’s assistance for better understanding of the lesson. At the end of each module, you need to answer the post-test to self-check your learning. Answer keys are provided for each activity and test. We trust that you will be honest in using these. In addition to the material in the main text, Notes to the Teacher are also provided to our facilitators and parents for strategies and reminders on how they can best help you on your home-based learning. Please use this module with care. Do not put unnecessary marks on any part of this SLM. Use a separate sheet of paper in answering the exercises and tests. And read the instructions carefully before performing each task. If you have any questions in using this SLM or any difficulty in answering the tasks in this module, do not hesitate to consult your teacher or facilitator. Thank you.  What I Need to Know This module is designed and written to help you to understand the planning process. After this module, you are expected to: Identify the steps in the financial planning process (ABM_BF12-IIIc-d-10) a. define financial planning; b. explain the importance of financial planning; and c. illustrate the financial planning process. 1  What I Know A. Directions: Write the letter of the correct answer on a separate sheet of paper. _______1. It includes the vision, mission, and goals set by the top level of management. A. tactical planning C. operational planning B. strategic planning D. financial planning _______2. It helps the company by translating the strategic plans into specific plans or actions carried out by the middle level of management. A. tactical planning C. operational planning B. strategic planning D. financial planning _______3. It involves day-to-day operations carried out by the lower-level management. A. tactical planning C. operational planning B. strategic planning D. financial planning _______4. It sets the company’s direction. A. short-term goal C. mid-term goal B. long-term goal D. none of the above _______5. It describes what a company wants to become. A. vision C. goal B. mission D. objective B. Directions: Arrange the financial planning process in order using Roman Numerals (I, II, III, IV, V, VI). Write your answers on a separate sheet of paper. _______6. Assign the task to accountable and responsible individual or team and have a timeline. _______7. Identify the resources needed. _______8. Identify goals that are related to the tasks. _______9. Establish an evaluation system for monitoring and controlling. _______10. Determine contingency plans. _______11. Set goals or objectives. 2  Lesson 1 Financial Planning Planning is very important because it provides directions to achieve the organization’s objectives. Planning is useless without a strategy. Strategic planning helps in achieving the company’s objectives. It is designed to guide the company in operational and financial decisions. A strategic plan includes the vision, mission, and goals set by the top level of management. This plan will be the basis of long-term decisions. Tactical planning helps the company by translating the strategic plans into specific plans or actions carried out by the middle level of management. Operational planning involves day-to-day operations carried by the lower-level management. This plan transforms the tactical plan into specific and detailed objectives. What’s In Directions: Unscramble the following words to form the functions of a finance manager. Write your answers on a separate sheet of paper. 1. ISTINVENG ________________________ 2. ERANGOTIP ________________________ 3. FINGNANCI ________________________ 4. ENDIVIDD LIPIEOCS ________________________ To perform these functions, a finance manager should make a plan. Planning is very important in every aspect of the business. It is related in every function of management. The next lesson will be financial planning. Notes to the Teacher / Facilitator This module will help the students be familiar with the steps in the financial planning process. It also aims to increase their awareness about their goals or their future. 3  What’s New Figure 1. Steps on Achieving Goals To help you understand the steps in achieving goals, answer the following questions in two (2) to three (3) sentences. 1. What are your goals in life? _______________________________________________________________________ _______________________________________________________________________ 2. How do you start setting goals? _______________________________________________________________________ _______________________________________________________________________ 3. Based on the goal ladder, how does setting goals lead to success? _______________________________________________________________________ _______________________________________________________________________ Scoring Rubrics: 5 points The answer is well-written, organized and the idea is very relevant to the question and has no grammatical or spelling errors. 4 points The answer is fairly written, and the idea is almost relevant to the question and has one grammatical or spelling error. 3 points The answer is somewhat relevant to the questions and has two to three grammatical or spelling errors. 2 points The answer is unclear and has four grammatical or spelling errors. 1 point The answer does not address the question and has more than five grammatical or spelling errors. 4  As you can see in the illustration, before you can reach your goals, there are steps to do. These steps are the same as the process of financial planning. You must identify the first step before you can go to the next level. Let’s begin! What Is It Financial planning is the process of deciding how an organization can accomplish its financial goals and objectives. It is divided into: 1. the long-term financial plan, also known as strategic financial plan and 2. the short-term financial plan, also known as the operating financial plan. Table 1. Comparison of Short-term Planning & Long-term Planning Importance of Financial Planning 1. Financial planning helps managers assess the impact of the strategy or actions on their company’s financial position, cash flows, and earnings and if there is a need for additional financing. 2. It helps the company in the survival when uncertainties come along. Risks are calculated and alternatives can be done. Through financial plans, the firm can adapt to the changes happening in their environment. 3. It gives directions to the organization. Since plans are made, the firm can make necessary actions. 5 Steps in Financial Planning Process Figure 2. The Financial Planning Process 1. Set goals or objectives. The goals of a company can be divided into: short-term goals (1 year) mid-term goals (3-5 years) long-term goals (5-10 years or even longer) Long-term goals set the company's direction. Short-term goals are the specific steps or actions that will ultimately achieve the company's long-term goals. Vision describes what a company wants to become and mission is how the company will achieve its vision. 2. Identify the resources needed. Resources comprise production capacity, human resources, and financial resources. 3. Identify a goal that is related to the tasks. The management must find out how to achieve the goal. For example, if they want to increase sales, they can train their sales agent to become more skilled in dealing with clients. They can also make sales promotions as a marketing strategy. 4. Assign the task to an accountable and responsible individual or team and have a timeline. After identifying the task to achieve the goal, the company must identify who will be accountable for the activity. There should be a specific timeline for it. 5. Establish an evaluation system for monitoring and controlling. The management must establish a process that allows them to supervise the plan. This can be done by comparing the budgets and projecting financial statements with the actual results. 6. Determine contingency plans. The management has alternative plans to minimize the risk or bad effect to the company. 6  A contingency plan is an alternative plan of an organization to respond efficiently to a future event or situation that may or may not happen. Budgets and projected financial statements are also considered in contingency planning. What’s More Directions: Accomplish the following tasks. Write your answers on a separate sheet of paper. 1. Define financial planning using your own words. (1 to 2 sentences) _______________________________________________________________________ _______________________________________________________________________ 2. Enumerate the different steps in planning. 1. ___________________________________________________________________ 2. ___________________________________________________________________ 3. ___________________________________________________________________ 4. ___________________________________________________________________ 5. ___________________________________________________________________ 6. ___________________________________________________________________ 3. Explain the importance of financial planning. (1 to 2 sentences) _______________________________________________________________________ _______________________________________________________________________ Scoring Rubrics: 5 points The answer is well-written, organized and the idea is very relevant to the question and has no grammatical or spelling errors. 4 points The answer is fairly written, and the idea is almost relevant to the question and has one grammatical or spelling error. 3 points The answer is somewhat relevant to the questions and has two to three grammatical or spelling errors. 2 points The answer is unclear and has four grammatical or spelling errors. 1 point The answer does not address the question and has more than five grammatical or spelling errors. 7  What I Have Learned Directions: Answer the following questions in one (1) to two (2) sentences. Write your answers on a separate sheet of paper. In this lesson, I learned that: ____________________________________________________________________________ ____________________________________________________________________________ I did that: ____________________________________________________________________________ ____________________________________________________________________________ I realized that: ____________________________________________________________________________ ____________________________________________________________________________ Scoring Rubrics: 5 points The answer is well-written, organized and the idea is very relevant to the question and has no grammatical or spelling errors. 4 points The answer is fairly written, and the idea is almost relevant to the question and has one grammatical or spelling error. 3 points The answer is somewhat relevant to the questions and has two to three grammatical or spelling errors. 2 points The answer is unclear and has four grammatical or spelling errors. 1 point The answer does not address the question and has more than five grammatical or spelling errors. 8  What I Can Do Directions: Write an eight-line poem about financial planning and its importance in your life as a student. Write your answers on a separate sheet of paper. Rubrics CATEGORY 5 4 3 2 1 ORGANIZATION The poem is The poem is The poem is The poem is The poem is AND CONTENT easy to read, somewhat somewhat hard to read hard to read organized easy to read, easy to read and few and most and the organized and the elements are elements are content is and the content is clearly nor clearly relevant to content is somehow written and written and the topic. almost relevant to drawn. drawn. relevant to the topic Lack of the topic. understandin g of concept SPELLING AND The poem has One spelling Two or three Four or five More than 5 GRAMMAR no spelling or or spelling or grammatical grammatical grammatical grammatical grammatical mistakes in mistakes in mistake. mistake in mistakes in the poem. the poem the poem. the poem. CREATIVITY The poem is The poem is The poem is The poem is The poem is AND very creative, creative, somewhat less attractive not attractive UNIQUENESS attractive and attractive and creative and at all. unique unique. unique. 9  Assessment A. Directions. Answer the following questions on a separate sheet of paper. Choose the correct order of the financial planning process from the options below. (6 points) A. Assign the task to accountable and responsible individual or team and have a timeline. B. Establish an evaluation system for monitoring and controlling. C. Determine contingency plans. D. Set goals or objectives E. Identify the resources needed. F. Identify goals that are related to the tasks. D, E, A, F, B, C D, E, C, F, A, B, D, E, F, A, B, C D, E, B, C, A, F B. Directions: Match column A with column B. Write your answers on a separate sheet of paper. COLUMN A COLUMN B ____1. It is about setting the goals of the A. short-term goals organization and identifying ways on B. vision how to achieve them. C. management ____2. It is the process of deciding how an planning organization can accomplish its D. midterm goals financial goals and objectives. E. mission ____3. It describes what a company wants F. planning to become. G. long-term goals ____4. It describes how the company will H. financial planning achieve its goal. I. contingency plan ____5. It is a plan designed to take a possible J. strategic plan future event or circumstance into account. ____6. These goals can be achieved in a year. ____7. These goals can be achieved between 1-3 years. ____8. These goals can be achieved in 5-10 years or even longer. 10  ____9. It provides road maps for guiding, coordinating, and controlling the firm’s actions to achieve its objectives. Additional Activities Directions: List at least 10 things you want to achieve in your life or any plans that come into your mind. Identify whether each is a short-term goal or a long-term goal. Write your answers on a separate sheet of paper. 11  12 What I Know What’s In What’s More A. 1. Investing The answer will depend on the 1. B 2. Operating student. 2. A 3. Financing 3. C 4. Dividend policies 4. B 5. A B. 1. IV 2. II 3. III 4. V 5. VI 6. I What I Can Do What I Have Learned Assessment The answer will depend on the The answer will depend on the A. student. student. D, E, F, A, B, C B. 7. C 8. H 9. B 10. E 11. I 12. A 13. D 14. G 15. F Additional Activities: The answer will depend on the student. Answer Key References "What Is A Financial Plan?". 2020. Investopedia. Accessed July 6. https://www.investopedia.com/terms/f/financial_plan.asp. Cabrera, Ma. Elenita, and Gilbert Anthony Cabrera. 2017. Business Finance Principles And Applications. Sampaloc, Manila: GIC Enterprises & Co., Inc. Cayanan, Arthur, and Daniel Vincent Borja. 2017. Business Finance. 1st ed. Manila: Rex Book Store. Gitman, Lawrence, and Chad Zutter. 2012. Principles Of Managerial Finance. 13th ed. Prentice Hall. Teaching Guide For Senior High School Business Finance. 2016. Quezon City: Commission on Higher Education. 13 For inquiries or feedback, please write or call: Department of Education – Region III, Schools Division of Bataan - Curriculum Implementation Division Learning Resources Management and Development Section (LRMDS) Provincial Capitol Compound, Balanga City, Bataan Telefax: (047) 237-2102 Email Address: [email protected]