Introduction of Finance PDF

3. Working Capital Management: INTRODUCTION OF FINANCE Managing the company's short-term assets and Finance Definition liabilities to e...

3. Working Capital Management: INTRODUCTION OF FINANCE Managing the company's short-term assets and Finance Definition liabilities to ensure sufficient liquidity for day-to-day Finance is the field that deals with the operations. allocation of resources, including the management, creation, and study of 4. Risk Management: Identifying, money, investments, and other financial analyzing, and mitigating instruments. It encompasses personal financial risks that could finance, corporate finance, and public impact the organization's finance, focusing on how individuals, financial health. businesses, and governments manage their financial resources, make 5. Financial Planning and investment decisions, and navigate Forecasting: Developing risks to achieve financial stability and financial plans, budgets, and growth. forecasts to guide the organization's financial Finance Categories strategy and decision-making. 1. Personal Finance: Managing individual or household How The Financial Manager Helps In finances, including saving, Achieving The Goal Of The budgeting, investing, and Organization planning for retirement or other financial goals. The primary goal of most organizations is to maximize shareholder wealth or 2. Corporate Finance: Focusing overall organizational value. The on how businesses manage financial manager plays a crucial role their financial resources, in achieving this goal by: which includes investment decisions, capital structure, 1. Making Informed Investment financing, and maximizing Decisions: By selecting shareholder value. projects and investments that yield the highest return 3. Public Finance: Concerned for the level of risk the with government financial company is willing to take. management, including taxation, spending, 2. Optimizing Capital Structure: budgeting, and managing Ensuring that the company public debt to fund uses the right mix of debt government activities and and equity to finance provide public services. operations efficiently, thereby minimizing the cost Primary Activities Of The Financial of capital and maximizing Manager returns. 1. Capital Budgeting: Evaluating 3. Ensuring Liquidity: By and selecting long-term managing working capital investment opportunities effectively, financial that align with the managers ensure the organization's goals. organization has sufficient liquidity to meet its 2. Capital Structure obligations and invest in Management: Determining growth opportunities. the optimal mix of debt and equity financing to fund the 4. Managing Risks: By identifying company's operations and and mitigating financial growth while managing risk. risks, they protect the organization’s assets and  ensure long-term financial stability. PARTNERSHIP 5. Enhancing Financial association of two or Performance: Through more persons who bind careful planning, analysis, themselves to contribute and control, financial money, property or managers improve industry to a common operational efficiency and fund profitability, leading to Governed by the Civil increased organizational Code of the Philippines value. Partners AGREE among different things (Manage Role Of Financial Institutions And business, contributions Markets capital, profit/ losses, form and mode of 1. Financial Institutions: Banks, settlement) credit unions, insurance companies, and investment firms provide a variety of financial services, such as accepting CORPORATION deposits, offering loans, the most complex form of providing investment products, business organization. and facilitating transactions. A corporation is a legal They help channel funds from entity that is separate savers to borrowers, support and distinct from its businesses in raising capital, owners. and offer risk management A corporation has services. standardized procedures for its creation, organization, 2. Financial Markets: These are Corporations are subject platforms where financial to greater scrutiny, securities like stocks, bonds, and regulations, control and commodities are traded. supervision by the Financial markets (such as stock government markets and bond markets) enable companies to raise Types Of Business According To capital, provide investors with Activities opportunities to invest in securities, and help in the SERVICE pricing and valuation of MERCHANDISING financial instruments. Efficient MANUFACTURING financial markets contribute to economic growth by allocating Sales invoice (SI) VS. Official Receipt capital to its most productive (OR) uses. Sales invoices are for the sale of goods Business or property, while official receipts are for the sale of services or leases of Business generally refers to property. organizations that seek profit by providing goods or services in exchange for payment. SOLE / SINGLE PROPRIETORSHIP basic and legal form of business It has only ONE OWNER