Marystel Nicole Sanchez

BSA-3A

1. Financial management is the process of planning, budgeting and controlling of financial resources. In
simple words it is the management of money which is essential to achieve goals and objective such as
profit maximization.

2. These are examples of scenario or situation that requires Financial Management:

 evaluation where we should put our investment

 deciding on which asset can give us higher return on profits
 management of working capital to avoid liquidity problems
 meeting day to day expenses such as wages of employees
 hiring employees

3. Financial management is important because it helps every organization to meet its primary goal such
as wealth maximization. It is crucial to have successful operations. It helps the users on better decision-
making especially on financing, investing and budgeting decision.

4. Financial analysis assess the stability, liquidity, solvency and profitability of the firm. This uses financial
ratios to help us understand the current status of our business.

5. Financial Ratios :

 Debt Ratio= total liabilities/total asset

-shows proportion of all asset that are financed with debt
 Debt to Equity= Total Liabilities/Total Equity
-measures debt relative to amounts of resources provided by owners
 Working capital turnover= Net sales/ave. working capital
-indicates adequacy and activity of working capital
 Asset turnover= net sales/ total asset
-measures efficiency of the firm in managing all asset
 Payable turnover= net purchase/ ave accounts payable
-measure efficiency of the company in meeting trade payable.
 Days supply in inventory=360/inventory turnover
-measures average number of days to sell or consume the average inventory
 Fixed asset to total equity= fixed asset/total equity
-measures the proportion of owner's capital invested in fixed asset
 Fixed asset to total asset= Fixed asset/ Total asset
-measures investment in long-term capital asset
 Capital intensity ratio=Total asset /Net sales
-measures efficiency of the firm to generate sales through employment of its resources
 Equity Ration= Total equity/ total assets
-indicated proportion of assets provided by owners. It reflects financial strength and caution to
creditors.
6. COMPARATIVE BUDGETING PLAN FOR COLLEGE STUDIES

VERTICAL ANALYSIS

  2021 % 2022 %

Transportation 3,000.00 10.64% 3,200.00 11.03%

Library fee 2,500.00 8.87% 2,600.00 8.97%

Athletic fee 3,800.00 13.48% 3,900.00 13.45%

Guidance fee 3,400.00 12.06% 3,400.00 11.72%

Handbook Fee 2,800.00 9.93% 2,700.00 9.31%

Registration fee 3,000.00 10.64% 3,100.00 10.69%

School fee 3,000.00 10.64% 3,200.00 11.03%

Admission fee 1,500.00 5.32% 1,600.00 5.52%

Medical Fee 5,200.00 18.44% 5,300.00 18.28%

TOTAL 28,200.00 100.00% 29,000.00 100.00%

Horizontal Analysis

  2021 2022 %

Transportation 3,000.00 3,200.00 6.25%

Library fee 2,500.00 2,600.00 3.85%

Athletic fee 3,800.00 3,900.00 2.56%

Guidance fee 3,400.00 3,400.00 0.00%

Handbook Fee 2,800.00 2,700.00 -3.70%

Registration fee 3,000.00 3,100.00 3.23%

School fee 3,000.00 3,200.00 6.25%

Admission fee 1,500.00 1,600.00 6.25%

Medical Fee 5,200.00 5,300.00 1.89%

TOTAL 28,200.00 29,000.00 2.76%