Introduction to Business

Finance
Definition of Finance and
Financial Management

Prepared by: Ms. Shiela May D. Piquero

 It is the management of assets and money, is
crucial for any company.
 Focus to increase profit and minimize
financial risks.
 Is the money you need to establish and run
your business, which includes modernizing or
diversifying operations and expansion.
Money
Is a field that deals with the study of
investments.
the study and system of money,
investments, and other financial
instruments.
It encompasses the oversight, creation
and study of money, banking, credit,
investments, assets and liabilities that
make up financial systems.
In an economic sense
- is the purchase of goods that are not consumed
today but are used in the future to create wealth.

In finance
- is a monetary asset purchased with the idea
that the asset will provide income in the future or will
later be sold at a higher price for a profit.

Overall
- the process of laying out money now to receive
more money in the future.
1.Short Term Investment - funds that have
been placed in investment instruments that
will mature within one year.

2.Long Term Investment – funds that have been

placed in investment for more than a year.
- refers to the efficient and effective management
of money (funds) in such a manner as to
accomplish the objectives of the organization.

- means planning, organizing, directing and

controlling the financial activities such as
procurement and utilization of funds of the
enterprise.
Planning
 is concerned with defining goals for a
company's future direction
 determining the missions and resources
to achieve those targets.
 Emphasizes prevention rather than
correction of delays.
 Grouping together of men and establishing
relationships among them.
 Gathering the resources required to carry out
the activities and allocating the effective
and efficient use those resources.
Guiding and leading subordinates.
Influencing other people to perform
To achieve the desired objectives
Proper implementation of activities
Effective communication
Motivation
Fixing standards
Determining the main cause of problems
Making adjustments and corrections
Improvement
1. Public Finance – deals with the collection of
taxes and budget.
2. Personal Finance – pertains to financial
planning and investing.
3. Corporate Finance – concerned with the
management of all the financial activities of
an enterprise or business organization.
<Make a Work Plan>
What are the interrelated areas of
Corporate Finance? Explain Each.