Financial Management PDF

FINANCIAL MANAGEMENT Different Kinds of Money weight the revenue vs the expenditure is really deficit, Real Money and Plastic Money Currency hindi balance. There are many expenditure because...

FINANCIAL MANAGEMENT Different Kinds of Money weight the revenue vs the expenditure is really deficit, Real Money and Plastic Money Currency hindi balance. There are many expenditure because Paper Money there are so much population, budget for food, Different financial intermediaries as to subsidies in the ph na parang di kakayanin ng classification bank and non-bank kaperahan yung sagutin ung pangangailangan ng mga Corporate Finance tao pero kapag sa income from taxes and income from Finance when it comes involving international other revenues ng public corporations ka magbe-base trade deficit pa din sya kaya naman mataas yung Ownership like sole proprietorship, borrowings/utang from a world bank. OFW Remittance partnership, and corporation. - pinanggagalingan din ng pera ng bansa. Different types of corporation. Financial Market 2. Private Finance - finance other than public finance. Difference between stock, bonds and forex. a. Personal finance - conducted by consumers/individuals. FINANCE: DEFINITION’ b. Finance of non-profit organizations - -derived from the latin word finer meaning conducted by non-profit organizations. “To end” or “to pay”. When a person pays his bill, the c. Business finance - conducted by businesses or financial matter is ended. enterprises for profit. -the operational or practical side of economics, the practical science of the production, and distribution of Note: wealth. Private Finance - Personal/Consumers/Individual -the efficient acquisition, distribution / allocations, and Public Finance - “saan nanggagaling yung utilization of scarce money / fund resources. kaperahan” mga budget ng government and then saan naman nilalaan. Revenue and Expenditure of The finance task allocating every available fund, Government–tax, utang, investment, corporation own acquiring middle funds and utilizing acquire funds. by government Finance goes into how it is being acquire and then how it will be use para sa isang private or public TYPES OF BUSINESS ORGANIZATIONS corporation kung saan nanggaling ang kaperahan ng A. As to Nature or Purpose isang company (private or public) and kung saan sya 1. Service - rendering service (e.g., barber shops, nilalaan–dito nakapaloob yung financial market, dental/medical clinics, laundry shops) investment, funds and stock etc.. 2. Trading / merchandising - buying and selling (e.g., sari-sari stores, hardware stores, Classification of Finance department stores) A. As to Form of Negotiation 3. Manufacturing - buying raw material and 1. Direct Finance - involved in direct borrowing with converting them into finished products (e.g., direct relationship between borrower and lender. procter and gamble, san miguel brewery, goodrich, sterling) 2. Indirect Finance - involves the use of financial 4. Banking and finance - using money as the intermediaries. –acts as middlemen. Example of main object (product) of the business (e.g., intermediaries either the buyer or the seller, the BDO, PNB, credit card companies, credit borrower or the lender and then yung namamagitan sa unions, savings and loan associations, kanila is the financial intermediaries insurance companies) 5. Mining / extractive industries B. As to User 6. Constructions 1. Public Finance - revenue and expenditure patterns 7. Genetic industry (agricultural, forestry, and of the government. fishing / fish culture) Saan nanggagaling yung kaperahan yung mga budget ng government and then saan naman nailalaan. The AYALA CORPORATION government itself has revenue generating activities like Service - Honda taxes, utang, licenses/fees/multa. Expenditure Trading / merchandising - ayala malls / supermarkets (pinaglalaanan) like education. If you are going to Manufacturing 1  FINANCIAL MANAGEMENT Banking and finance - BPI 2. Two or more persons who have the legal capacity to Mining / extractive industries enter into the contract of partnership. Constructions - Ayala land / development 3. Valuable contribution to a common fund which may Genetic industry (agricultural, forestry, and fishing / consist of money, property, or industry. fish culture) 4. An intention to divide the profits between or among the partners. HENRY SY. SM PRIME HOLDINGS 5. Lawful purpose(s) Service - National University Trading / merchandising - SM Supermarket, SM Malls, Advantages of a Partnership Watsons Ease to formation Manufacturing - Bonus Allows pooling of financial resources Banking and finance - BDO, China Bank Allows pooling of skills, expertise, and Mining / extractive industries - SM Equity Investment experience (copper) Less government control, supervision, and Constructions - SMDC intervention than corporations Genetic industry (agricultural, forestry, and fishing / fish culture) Disadvantages of a Partnership Limited life J.J. SMITH / ROBINSON Unlimited liability Service - Cebu Pacific, Philippines Airlines Mutual agency Trading / merchandising - Robinson Supermarket, Robinson Mall Types of Partnerships as to Liability of Partners Manufacturing - Universal Robina, Jack n Jill 1. General Partnership (as to liability) - all of the Banking and finance - Robinsons Bank partners are general partners, that is, no partners are Mining / extractive industries limited partners. Constructions - Robinson Land Corporation, 2. Limited Partnership - at least one/but not all is a Condominium, houses and hotels. limited partner. There should be at least one general Genetic industry (agricultural, forestry, and fishing / partner to assume unlimited liability. fish culture) Parties to a Corporations B. As to Ownership 1. Corporators - include the incorporators, the other 1. Sole proprietorship - stockholders, or members (for non-stock corporations). 2. Partnerships - an association of two or more 2. Incorporation - founders (five, but not more than persons who have agreed to contribute money, fifteen) property, or industry to a common funds with the 3. Stockholders / shareholders - those who own intention of dividing the profits among themselves. shares of stocks -Two or more persons may form a partnership for the 4. Members - corporators of a non-stock corporation exercise of a profession. Such partnership are called 5. Promoters - find potential incorporators or general partnerships. stockholders for the corporation being formed, prepare -the owners of a partnership are called partners. the prospectus to invite investors and sometimes work -the aggregate concept views the partnership as a to obtain the charter or approval of the Articles of collection of rights and responsibilities of the Incorporation. individual partners. -each partner is an agent of the partnership. This means Incorporation and Organization of a Corporation that any act of the partner within the scope of the 1. Promotion - bringing together of the incorporators business of the partnership binds the partnership and and persons interested in forming the corporation and the other partners. procuring subscriptions or capital for the corporation. 2. Incorporation - process of formally organizing the Essential Requisites of a Partnership corporation, which includes: 1. A contract of partnership which may be oral or a. Registration of businesses name with the SEC written, expressed or implied, subject to the rules b. Drafting and execution of the Articles of contained in Art. 1771 to 1773 of the New Civil Code. Incorporation 2  FINANCIAL MANAGEMENT c. Execution of sworn affidavits and bank deposit Direct Finance - it involves direct borrowing and certificates direct relationship between the borrower and the lender d. Filing of the Articles of Incorporation with the Indirect Finance - when there is a financial SEC intermediary or kapag merong middleman. e. Issuance by the SEC of the Certificate of Incorporation. Different types of financial intermediaries Insurance Company Classification of Corporations Pension Funds The corporation code of the philippines classifies Banks corporations according to nature; Investment banking / company 1. Public Corporation (also called municipal Depository institutions and Non Depository. corporations or local government) - government of a portion of the state. CHAPTER VII - THE FINANCIAL 2. Private corporations - all other corporations other ENVIRONMENT than public corporations. THE FINANCIAL MARKETS B. Preferred / Preference Shares - corporations may - institutions and systems that facilitate transactions in issue more than one class of stocks, one with all types of financial claims preferential rights over another class. - the bridge between those with excess funds and those I. as to assets (upon liquidation) - given preference who need funds over common shares in the distribution of the assets of - are at the heart of the financial system, determining the corporation in case of liquidation. the volume of credit available, attracting savings, and Ii. as to dividends - shares with preferential setting interest rates and security prices rights;owners of which are entitled to receive dividends before payment of any dividend is made to CLASSIFICATION OF FINANCIAL MARKETS the common stock. A. As to Term or Maturity Cumulative 1. Money market - market for short-term funds. Non-cumulative 2. Capital market – market for long term funds. Participating Non-participating B. As to Type of Issue 1. Primary market – market where original issues of Organization Expertise securities are sold. - These are expenditures incurred in organizing a 2. Secondary market - market where currently corporation such as SEC fees, legal fees, taxes and fees outstanding securities are sold. paid to the city or municipal government, attorney’s fees for drafting the Articles of Incorporation and STOCK MARKET By-laws, and other related services. And promotional A stock index is a measure of the price level of the costs. shares listed in the exchange by the indicated category. - These are no longer charged to an intangible assets It is useful as a track record of changes in stock prices account and amortized yearly, theoretically over a over time. period of 5o years or in practice, over a period of 5 years as allowed before. Prices reported at the end of a trading day: - under the PAS 38, pre-operating -Open the stock price for the first transaction at the expenses/organization expenses/costs do not fall under start of trading day. the definition of an intangible asset and should no Low - lowest stock price for transactions during the longer be reported as a deferred asset subject to day. amortization. Theoretically, they are now immediately High- highest stock price for transactions during the expensed as period costs. However, the BIR still day. continues to regard them as amortizable for tax Close - the stock price for the last transaction of the purposes. day. Form of negotiation Measures Calculated for Stocks 3  FINANCIAL MANAGEMENT Capital gain - difference between purchase price of Difference between the lease and the rent: Lease–its stocks and the market value/price of stock; represented like a rent of a property or equipment who pays for a by an increase in the stock price. rental fee to the owner normally in contract. The Yield or cash yield of the stock price - ratio of cash lease-to-buy –this normally happen when you buy a dividends to stock car or a house for financing or installments, ito yung Price-earnings ratio – ratio of stock price to earnings contract na hindi pa binibigay sayo yung title for the per share. car or house until you fully paid. It will be transferred Value - relationship between the benefits and the cost to your name once the property or the car hanggang of the stock. The benefits are in terms of cash or stock matapos yung time. dividends, and the relationship of these benefits to the price is the value of the stock. The value of the stock is 3. Mortgages - property or equipment can be used as a not the stock price. collateral for a loan. The property/equipment is then said to be mortgaged. FINANCIAL INSTRUMENTS - instruments or Nagkakaroon ng “collateral” for a loan, mas securities which are paper or electronic evidences of sine-secure yung loan by giving the lender ng right to either debt/bonds or equity/stocks covering financial take the asset if hindi kaya makapagbayad. transactions in the different markets 4. Letters of Credit (domestic and international Classification of Financial Instruments L/Cs) - letter from a bank guaranteeing a buyer's Money Market Instruments – securities dealt with in payment to a seller on the agreed date and for the the money market (short-term). correct amount. Domestic L/Cs are for local or Capital market instruments - securities dealt with in the domestic transactions while international L/Cs are for capital market (long-term). foreign transactions. Negotiable - can be sold or transferred. For example: May ihuhulog ka na sa international Non-negotiable capital - cannot be sold. then yung seller na pagbibilhan mo may doubt sayo kung may kakayahan kang magbayad. So kukuha ka ng MONEY MARKET INSTRUMENTS letters of credit sa bank kung saan meron kang bank 1. Cash Management Bills - government-issued account then yun ang ibibigay mo sa seller para securities with maturities of less than 91 days (35 days ma-proof na may kakayahan kang magbagay and if or 42 days). ever na wala kang pang-bayad yung bank mismo yung 2. Treasury Bills (T-bills) - government-issued magbabayad sa seller. securities maturing in 91, 182, and 364 days, which are It is a transaction that involves trading, buying and sold at a discount (non-coupon bearing, that is, does selling from other countries kasi hindi naman ito one not earn interest). on one buying. Merong time bago ma-receive ang 3. Commercial Papers (CPs) - issued by highly isang item because transporting it or logistics involves financially-secured firms maturing in 30 to 270 days. long distance. So how can you do a transaction when 4. Banker's Acceptances - bank drafts issued by there is “trust”. banks to help traders and other customers to raise Mine-make sure mo din na you will be able to receive funds to pay for current expenditures. money the moment you release the item. NON-NEGOTIABLE CAPITAL MARKET NEGOTIABLE CAPITAL MARKET INSTRUMENTS INSTRUMENTS 1. Loans and syndicated loans - one-on-one 1. Corporate Stocks - evidence of ownership in a transactions between a borrower and a lender. corporation; earned through dividends. Syndicated loans are loans granted by several banks to 2. Corporate Bonds - certificates of indebtedness of a single borrower. issuing corporations to holders of said certificates; earn through interests. 2. Leases- arrangements where an owner of a property 3. Treasury Notes and Bonds - long-term instruments or equipment rents (leases) the property/equipment to a issued by the government that pays interest. user who pays a lease or rental fee to the owner. 4. Municipal Bonds - long-term instruments issued by Lease-to-buy are leases where the lessee has the option municipalities to finance projects like roads and to buy the property being leased after a given period. bridges, sewage plants, and other municipal projects. 4  FINANCIAL MANAGEMENT 5. Mortgage-backed Bonds - bonds that are secured 15. Indexed or purchasing power bond – interest or collateralized by a mortgage. rates paid are based on an inflation index such as the consumer price index. DIVIDENDS Dividends out of earnings - share of stockholders in Notes: the profits of the business. Money Market - for short term Cash dividends - certain amount per share. Capital market - for long terms Stock dividends - certain number of shares As to the type of issue primary market when you buy will be given per certain number of shares the securities or the securities are being sold directly held. from the company. Secondary market, yung securities Property dividends - non-cash assets are binili mo naman there is already a intermediaries. distributed as dividends. Quiz about fs and types of industries Liquidating dividends industries - return of capital; also used for extractive CHAPTER 1 Stock options - pre-emptive rights or options given to THE CONCEPT AND DEVELOPMENT OF outstanding stockholders to purchase additional shares MONEY of stocks to maintain their proportionate share of ownership of the corporation. BARTER - the exchange of things for other things CORPORATE BONDS - used in olden times, such that what one produces, he Types of Bonds exchanges it with the things he needs (e.g., a farmer 1. Secured bonds - collateralized by mortgages or producing vegetables exchanges it with fish caught by other assets. fishermen; a person who takes care of pigs can 2. Debenture bonds - unsecured bonds backed only by slaughter the pig and get the meat to be exchanged for the reputation and financial stability of the issuer. whatever he needs, say sugar for one who has sugar or 3. Variable rate bonds - interest rate on the bonds for rice that a farmer has) fluctuates and changes with the changes in market - applied in today's world through the barter rates. exchanges; barter exchange members exchange 4. Convertible bonds - convertible into common whatever commodities they have with whatever stocks. commodities are being sold by other members. Even 5. Bonds with warrants - warrants are options to buy gift certificates are traded in the barter exchanges common stock at a stated price. - paved the way for the olden forms of money called 6. Mortgage bonds - secured by the real property of commodity money which include: the issuer. 7. Floating-rate bonds - bonds in which the interest 1. cattle - probably the oldest of all forms of money; rate changes depending on market conditions. described as mankind's first working capital asset. 8. Junk bonds - offers high yield of return, but are 2. cowrie shell - shell of a mollusk; first used in China; considered as low quality and high risk. the most widely and longest used currency in history. 9. Serial bonds - bonds with serial payment provisions 3. Wampum - an oblong-shaped clamshell sawed into and are paid off in installments over the life of the beads, polished, and strung together and used as issue. ornament. 10. Straight bonds- matures at a single time. 4. metals - silver, gold, etc. 11. Redeemable bonds - bonds which the issuer can retire or redeem prior to maturity. COINAGE 12. Income bonds - earn interest only when the issuer Coinage is the conversion of metals into coins. mint - earns or makes a profit that can pay the interest. place where metals are made into. 13. Eurobonds - bonds denominated in the issuer's Coin - an ingot of metal; the weight and fineness of currency, but sold outside of the issuer's country. which are certified by the integrity of the design on its 14. Putable bonds - can be turned in and exchanged surface and the power of the issuing authority. for cash at the holder's option. Basic Purposes of Coinage 5  FINANCIAL MANAGEMENT 1. prevent confusion 1988 - Australia was the first to develop and use 2. ensure uniformity and fineness (ratio of weight of polymer notes in general circulation. pure metal to total weight, expressed in decimal or 1996 - Australia became the first country to have a full carat) of coins set of circulating polymer banknotes of all 3. facilitate exchange denominations. 4. ensure confidence on the part of the citizenry with 2005 - Bulgaria issued the world’s first hybrid respect to the government's monetary system paper-polymer banknote. Present - 23 countries use polymer banknotes (BBC KINDS OF COINAGE News Magazine, November 18, 2011). 1. Free Coinage or Gratuitous Coinage - a system whereby metals are brought to the government mint Example of plastic polymer money used by different and converted into standard money without any countries charge. 2. Brassage - the fee charged by the government to mint metals into coins is just sufficient to cover the cost of minting with no profit for the government. 3. Seigniorage/Seigniorage – people bring precious metals like gold to be minted and the government charges seigniorage with a profit for the government. 4. Limited Coinage - government, at its option, buys precious metals in the open market and mints them as coin money. PAPER MONEY 618-906 AD - the Chinese invented printing and the use of paper money during the Tang Dynasty. 11th Century - Mongolia was the second country to begin using paper money. 12th Century - Moors established the first paper mill in Europe (now Spain). 17th Century - The Bank of Sweden issued the first paper money in Europe; the Bank of England was founded and began issuing promissory notes, originally handwritten but later printed. Philippine P100 bill, a fiat paper money PLASTIC MONEY - hard plastic cards used in everyday exchange transactions in place of actual bank notes - more portable than money and less risky; allows one to lengthen or stretch his budget. CLASSIFICATION OF PLASTIC MONEY Credit card - allows owners to buy products and services on credit from different establishments; PLASTIC (POLYMER) MONEY widely used, as it allows individuals and businesses to Plastic (Polymer) Money is made of super resistant "stretch" their budget, enabling them to buy what they polymer film. need without the use of money. However, there are interest and finance charges that accompany its use. 1983 - Costa Rica and Haiti issued the first Tywek, and Debit card - payments are immediately charged to the the Isle of Man issued the first Bradvek polymer cardholder's bank account. banknotes printed by the American Banknote Co. and developed by DuPont. 6  FINANCIAL MANAGEMENT Cash card - only allows withdrawal of money through 5. Conveyance - means of transferring ownership. an Automated Teller Machine (ATM). Prepaid cash card - purchased (immediately paid for; FORMS OF MONEY hence, prepaid) from certain establishments. Examples 1. Commodity Money - cattle, cowrie shells, are gift card/certificate, store card, and multi-currency wampum, hemp. prepaid card. 2. Currency (Bills and Coins) - money currently used by different countries. Notes: 3. Check- issued by those with current account with Current Accounts - may kasamang check accounts the bank to pay for things they want to buy or for their Debit - ATM’s debts. 4. Bank Draft - issued by a bank and like a check can BARTER EXCHANGE AND BARTER CARD be used like money. Barter Business Exchange 5. Money Order - purchased from the post office or ☐ a network of business owners who want to trade other outlets and used to pay for goods, services, or goods and services to increase sales and profit with a debts. reduction of cash outlay. 6. Warehouse Receipt (WR) - evidence of goods ☐improves operational efficiency and adds value to stored in a warehouse and can be used as a collateral the firm and the stakeholders. for a loan. ☐ members receive a plastic card (barter card) and an interest-free line of credit. TYPES OF CHECKS ☐trade points or barter money (in peso) are credited to Personal check - issued by persons to be drawn a person's or a business' account in the exchange if the against their own current/checking account with a person or the business has certain goods or services bank. sold in the exchange. Business check - issued by companies (businesses) ☐ examples are BarterPX, B2B Exchange Network, drawn on their current/checking account with a bank. BizXchange, and BEX Barter EXchange Philippines. Cashier's/Manager's check — issued by a bank and signed by its cashier or manager against the bank's ADVANTAGES OF TRADING THROUGH THE own account ensuring availability of funds. BARTER EXCHANGES Certified check a personal check - certified by the 1. Turn unproductive assets into a medium of exchange bank as to the availability of funds in the account of 2. Better cash flow the person issuing the check. 3. Increased sales Traveler's check - preprinted, fixed amount check 4. Greater profitability sold by financial institutions which make an 5. Faster turnover of inventories unconditional payment to whoever has the traveler's 6. Sell slow-moving or dead inventories at regular check in his possession and as such can be spent like price an international currency; an internationally 7. Idle time is made productive redeemable draft in various denominations that can be 8. Online bookkeeping purchased from a bank or traveler's aid company. 9. Eliminate billing hassle 10. Increased credit line PARTS OF CHECK 11. Provide employee bonuses and benefits without the PERSONAL CHECK use of cash FUNCTIONS OF MONEY 1. Medium of Exchange - used for exchange of goods and services. 2. Standard of value - measure the value or worth of something. 3. Store of value - savings, in the form of money or investment, is stored for future use. 1. Complete name and address - must be 4. Means of deferred payment - as legal tender, personalized; pre-printed by the bank (no PO box) money is acceptable in payment of debts or liabilities. 7  FINANCIAL MANAGEMENT Be careful of using and/or when you are having a joint 6. more enabling policy and regulatory framework for account. trade in agricultural commodities. And - kapag withdrawal kailangan magkasama pa kayo etc. OTHER CLASSIFICATIONS OF MONEY Or - kahit isa lang sa inyo 1. Fiat/Fiduciary Money - money given value by the 2. Date - can be current or at a future date government through a fiat or decree, which means that 3. Bank ID number money became legal tender. Fiat money has no 4. Payee - for whom the check is issued sino ang corresponding reserve. Fiduciary makakatanggap ng checks connotes trust. 5. Amount - in both figures and words 2. Representative Money - backed by a government's 6. Bank name and address- must be printed on check or bank ́s promise to exchange it for a certain amount 7. Routing number (first figures) and account of silver or gold. number of drawer–may-ari ng check account (second figures) CHARACTERISTICS OF A GOOD MEDIUM OF 8. Signature of drawer (payer or issuer) EXCHANGE 1. Scarcity - rare or hard to find Parties to a Check 2. Divisibility - quality of being broken down into Maker - the drawer (depositor) who writes the check. smaller units. Drawee– the bank with which the current account is 3. Portability - ease in handling or carrying maintained. 4. Durability - lasts for a long period of time Payee - the one to whom the check is to be paid. CROSSED CHEQUE Parties to a Traveler's Check Issuer or obligor - the company issuing or producing the traveler's check. Agent - the financial institution who sells the traveler's check. Purchaser - the person buying the traveler's check. Payee- the seller of goods or services to be paid with the traveler's check. Hindi pwede i-cash, for deposit only. Types of Banks Drafts Demand Draft - payable upon demand or on sight POST-DATED CHEQUE (upon presentation of the draft for payment). Time Draft - payable sometime in the future. Local Draft - issued by a bank in a single country and applies to local transactions. International Draft - globally or internationally used for any business transaction. Automatic Bank Draft (ABD) – takes out money from the payer's account electronically at regular This was prepared on february 15, 2016, pina-prepare intervals; automatic "bill pay." ito for example february 10, 2016. Yung cheque na ilalagay mo jan should be for the future. That is for Benefits of the Warehouse Receipt System (WRS) security purposes, for example nag-issue ka ng cheque 1. easy access to finance and lower financing costs at hindi mo muna gusto mai-deposit sa account ko. So 2. reduced transaction costs pagdating ng feb 15 that is only the time na pwede 3. shorter marketing chain potentially increasing i-withdraw/deposit sa account. Normally ginagamit producer profit or margin sya sa payment of cars, car loans, rents. 4. better storage of commodities 5. proactive cooperation among producers and other COMPANY CHEQUE players 8  FINANCIAL MANAGEMENT Lack of divisibility - some of their goods are not easily divisible in small portions which can be complicated as transactions nila and mas mahirap mag-trade ng product. (elikah) Inefficient in transaction - yung barter can be time consuming becauuse of negotiating and computing rates requires ng direct exchange which can be less efficient compared to using money. (elikah) Storage issues - bulky or perishable items can be Name ng organization difficult to store and manage making it less practical to PERSONAL CHEQUE hold ng mga goods nila for future trading. (elikah) Normally, each country kapag international trading na each country sometimes have the product that they are good doing it or they are good in producing in particular product, mga product na namumunga lang in a particular climate or kind of land so medyo nandon siya sa hirap ng pagta-transport jan sa mga yan. There are many disadvantages of that meron din namang pros but the majority is cons, that’s the reason why sa Name ng owner. revolution people are trying to innovate that’s why they have to develop the different something that Current - for checking account, normally mataas ang contains intrinsic value that they have to use as a maintaining balance nya. businesses. medium of exchange. Savings - personal, limited transactions After the barter, ano yung mga bagay-bagay na ginamit Quiz about different currencies, origins of money and as per based on history. discussion about fs. Cattle–oldest, Cowrie Shell, Wampum–clam shell, beads, Metals–silver and golds (roselle). ------------------------------------------------------------------ ------------------------------------------------------------------ It refers to money which is exchanged only Exam Coverage - Money, Financial Intermediaries, electronically. What kind of money is that? at FS There is what we call plastic money, meron tayong e-banking. Reviewer Under Barter Economy, what is one of the It is a medium of exchange, what are the different disadvantage/cons barter type of economy in the way functions of a (hulaan mo nalang next kasi di na nya of trading. sinabi madali daw yan whsahsahsh) Barter as a Standard - wala kasing way para ma-measure yung value ng mga goods and services. The different types of plastic money. Kaya mahirap magkaroon ng fair trade. (tobias) Credit Card, Cash Card, Debit Card, Prepaid Cash Offering - ang hirap kasi time consuming din sya Card (issay) unlike sa money transactions. (Tobias) Storage - regarding sa mga supplies na hindi What are the two types of debit cards? nagla-last ng matagal, doon nagkakaroon ng hassle or Current Account– mqy checking account and Saving problem (capistrano) Account. (sam) Difficulty ng storing value -dahil matagal yung All of the bank's current accounts have a higher page-exchange galing iba’t-ibang bansa nagkakaroon maintaining balance compared to saving accounts. ng spoil or degrade yung value nya over time. (d) Advantage of Barter - No need na ng money kapag In the Philippines it is the mother bank of all banks. nage-exchange tapos yung pagbabarter in exchange of BSP located in Manila(office), East Avenue goods and services. (d) Quezon(factory) 9  FINANCIAL MANAGEMENT The different types of business organizations as to How about, kapag na-add and na-deduct mo na yung purpose. Service, Trading/Merchandising, mga dividends you come up with your retained earning Manufacturing, Banking and Finance, ending balance for that year which will be dated as Mining/Extractive Industry, Construction, and Genetic december 31 end of the year. And then when you are Industry going to prepare another retained earnings next year, hugutin mo yung ending balance last year. Same What kind of Industry is Ayala Land, Villars, SMDC, procedures, hugutin ung net income then i-add sa Robinsons Land. Real Estate Industry beginning balance tsaka ka magbigay ng dividends. The industry which particularly develops new varieties What are the accounts that are less than 1 year sa of plants and animals, developing new breeds and food balance sheet? Cash, inventory, accounts receivable for animals. Genetic Industry. For example ROBINA (mary) that is in current assets, In current liabilities accounts payable, accrued expenses, unearned revenue One particular financial statement that shows the (bansale) income of the company and their expenditures. Anong financial Statement mo makikita yung mga pumapasok From the Statement of Cash Flow what are the at lumalabas na pera sa company. Statement of Cash examples of outflows under operating activities. Flow. Increase in any Asset and decrease in any liabilities not loss dividends pay in the new purchase of Which FS contains the equity and the dividends and retirement of stock (tobias) mali sya. the money being retained in the company to use for further development of the company. Statement of Yes there are, kasi when you purchase one thing, the Retained Earnings. equipment for example. When you purchase an equipment so that is the outflows and then sa When I prepare the Statement of Retained Earnings, adjustment mo ng accounts, that is an increase in assets my ending balance this year will be my beginning and decrease in another form of assets. Naglabas ka ng balance next year, so if I am going to prepare a new another kind of assets which is cash, nag-increase ng retained earnings statement next year. What are the another form of assets which is equipment but that is accounts next to the beginning balance of that on financing or investing activities. particular year? Ano yung next sa beginning balance. Ano yung ina-add mo. (walang sumagot + nag-ibang Ano yung mga daily na pinaggagastusan ng company question agad si maam) under operating activities pa din. Mga operating expenses, yung rent, utilities (ruena). On your own understanding, what is all about or the Kapag ikaw kunware yung financial manager ng isang content of retained earnings. company, naglalabas ka ng pera in a daily operation of Separate amount ng income statement (roselle) it is an business. In the statement of cash flow, there are account after mo gumawa ng income statement. inflows and there are outflows, sa isang company When we say retained earnings it represent yung meron siyang income and expenditure. Ano yung mga cumulative net income ng isang company na hindi pa expenditures or outflows under operating activities. nadi-distribute sa mga shareholder as dividends. Maintenance for machineries, tools on equipment Instead, nire-retained yung earning na yon within the (maeri) company for values purposes, typically makikita sa Mga payments sa supplier and employees, mga retaining earnings is yung beginning retained dividend expenses, tsaka ibang taxes. (andrea) earnings, net income or loss then yung dividends and Yung mga daily na binabayaran for the daily lastly yung adjustment (kat) operations of business that includes the payables–for That composes of the retained earnings/remaining salaries and wages, suppliers, yung mga pagbili mo ng money last year beginning balance mo this year and raw material or the COGS, and in the same time the then ia-add yung net income this year saka ka other expenses–yung mga expenses na dine-deduct sa magbigay ng dividends–mga babayaran sa mga income statement like rent, salaries and wages, mga may-ari ng company kasi namuhunan. ginastos sa production of the products, promotion, Stockholders Compose Two types. Preferred Stock and selling and administrative, mga ginastos mo sa daily Common Stock 10  FINANCIAL MANAGEMENT operation ng business–operating expenses. Kapag mag-produce ng maraming tansan. Although hindi sila merong expenditure meron ding income. yung manufacturer ng tanduay kasi separate na company yon. They are just trying to supply yung Any other kinds of income kahit operating income, finished product nila which is the tansan is the raw financing income and investment income. Ano ano materials ng isang paggawa naman ng tanduay drinks. yung mga bumabalik/pumapasok na pera sa company? It’s a big decision for a company to buy a new Account Receivable (jovy) Yes, Account Receivable or machine, it is a big step you try to set aside the income yung mga binabayaran na sayo kung meron kang mga or the budget para bumili ng machineries. When you payables, meron ka ding receivables. try to look at the investing, investing decision when it comes to their finances and purchases, titignan mo Kapag nagkaroon ka ng inflows na it is a borrowing yung return, may balik ba ito which is eventually there from the bank, you tried to borrow money from the is an increase in assets. All of these, yung mga bank. The money that you borrow will be inflows to decisions, analysis, you come up with the right the company, ano yung kaakibat nyang outflows? Ano decision. All of those are for the goal which is the yung outflows from borrowing money from the bank? maximization of profit. Loan payable, kapag nagbo-borrow nagkakaroon ng inflow ng money at the same time kailangan mag-outflow pagdating sa maturity as loan payable Also known as single standard, it is the only metal (jhozard) Yes well it is a borrowings, it means to say adopted as the standard currency or money. It is a there is a percentage, meron syang interest, yung metal that is standard currency or standard types of outflows mo is the interest of the borrowings. Interest money. of the borrowings sometimes binabayaran mo yon ng monthly or semi-annually, quarterly depende sa It refers to the money or the script which is exchanged agreements/contract. Meron yang mga interest rate, only electronically. E-cards mga electronic like mga maturity rate, merong capital at the end of G-Cash credit card, e-wallets, paymaya (yusop) Basta majority date ibabalik yung capital and then together yung e-money (electronic money) na siya ng with the interest. e-banking. Meron naman tayong plastic money or the cards, merong bank notes and the coins na normally Kapag ka ang outflows mo ay when you sell an equity, ginagamit. ikaw yung company nag-issue ka ng equity or stock certificate. So may bumili, pumasok sa company yung What financial intermediaries na non-depository pero pinangbili nya ng stocks. Ano ang iyong outflows? supervise by the BSP? The only non-depository Ano ang tawag mo don sa outflows? financial intermediaries that are supervised by the Payment sa cash dividends (bench) Yes the dividends. BSP? Hindi ni-lesson Ang outflows mo ay dividends. Give 5 countries na ‘franc’ and tawag sa pera. When you try to purchase in a machineries that is a Countries in africa na franc ang tawag sa pera. outflows buying a new equipment. Ano naman kaya Benin, Chad, Gabon, Mourus and Cameroon. ang possible inflows? Kasi nag-outflows ka thru decreases assets which is cash the current assets but Coverage - Lahat ng napag-aralan sa prelims, The there is a income or the inflows na nag-generate from money, financial intermediaries and the FS. the particular purchase. Ano yung possible na magiging inflaws mo. Increase of sales, kasi bibili ng Types of Exam: bagong machinery means mas tataas yung production 1-10 = multiple choice mas madami pang ibebenta. (issay) Yes, Normally the 11- 20= Identification company decided to purchase a new machineries, 21 - 55 = enumeration malaking decision yan buying new machineries 56 - 100 = illustration or essay, demonstration, your kunwari yung tansan sa tanduay they have old kind of understanding about FS machineries, meron silang newer kind na binili pa nila sa Germany to produce a tansan, mas mabilis sya mag-produce, mas marami in line don sa kanilang demand na dumarami yung demand need na nila 11