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, CBE INSTRUCTOR
Nature of Business Finance
Management of
Business Financial Resources
Finance Processes Organizational
Provision/ Objectives
Procurement Profitability
Proper Allocation Growth
Efficient Utilization Stability
Liquidity
A. Provisions of the Financial
Resources
Considerations:
1. Status of the Firm
New Firm Capital
Existing Firm Expansion
New Product
Exigency of an
opportunity
A. Provisions of the Financial
Resources
Considerations:
2. Terms of Payment
Short-term
Financing
1 year or less
Long-term
More than a year
Financing
Depends on the capability of the Firm to Pay its obligation.
A. Provisions of the Financial
Resources
Considerations:
3. Sources of Financing
Owners/Investors Primary source
Lending • Commercial Banks
Institutions • Thrift Banks
•Investment Firms
•Private Financing Companies • Rural Banks
•Insurance Companies • Specialized Government Banks
•Pawnshops
•Fund Managers • Non-bank financial
•Others
intermediaries
B. Proper Allocation of the
Financial Resources
Considerations:
Aligned with Firm’s Objectives and Plans
Ranked according to importance (Prioritization)
! Financial Decision Making
Profitabilit
Risks
y
C. Utmost Efficiency of the
Financial Resources
C. Utmost Efficiency of the
Financial Resources
Considerations:
Resources = Intention
Wastages
Delays
Pilferage
Importance of Finance in Business
FACTS Runs business
Grows business
Bankrupts business
Positions business
STRENGTHS WEAKNESSES
OPPORTUNITIES THREATS
The Financial Manager
b. Financial Planning and Strategy
Fund Raising
Maximization of Profit
Expansionary Development
Portfolio Management
The Financial Manager
c. Capital Structure of the Organization
Investments
Stock Market Monitoring
Dividends Management
ROI to Investors
The Financial Manager
e. Control of Cash and other Assets