Copy of Business Finance1_Week2_Lesson2.pptx

Copy of Business Finance Lesson

1. COPA

2. Introduction to Financial Management Financial Institutions, Financial Markets, and Instruments

3. REVIEW Direction: Answer the following question to serve as guide for the topic.   1. Why is it necessary for the company to properly design its corporate structure?

4. Simple Creativity Test

5. How do you put a giraffe in the fridge ?

6. How do you put a giraffe in the fridge ? Open the fridge, put the giraffe inside, close the fridge

7. How do you put an elephant in the fridge?

8. How do you put an elephant in the fridge? Open the fridge, remove the giraffe, put the elephant inside, close

9. The Lion King organized a meeting for the animals: all the animals are present but one. Which one?

10. The elephant since it is still inside the fridge .

11. You have to cross a river, but it is populated by alligators. What are you going to do?

12. Just cross the river, all the animals are in the meeting with the lion including the ALLIGATOR.

13. Introduction to Financial Management; Major Role of Financial Management and Roles of the Different Individuals Learning Targets: I can distinguish a financial institution from financial instrument and financial market; I can explain the flow of funds within an organization – through and from the enterprise and the role of the financial manager; I can reflect the importance of a financial institution from financial instrument and financial market in our lives.

14. Activating Prior Knowledge Direction: Write the complete meaning of the abbreviations below. 1. BP1 _______________________________________________ 2. BDO _______________________________________________ 3. ONB________________________________________________ 4. BSP_________________________________________________ 5. SSS_________________________________________________ 6. GSIS________________________________________________

15. Two of your friends, Myla, and Mina, established their individual food business. One year after, Myla’s food business boomed while that of Mina’s food business struggles. Both approached you because they wanted to borrow money. You have 100,000 PHP savings and so you do not want to just simply let it go elsewhere. Myla told you she wants to borrow the money to expand her food business. She promised to repay you with interest. On the other hand, Mina, wants to borrow the money to sustain the production of her food business. She also promised to double the interest given by Myla once the business will boom. Being at the centre, and thinking about your money, who among the two will you lend your 100,000PhP, and WHY?

16. FINANCIAL SYSTEMS

17. Financial Markets – organized forums in which the suppliers and users of various types of funds can make transactions directly. Primary vs. Secondary Markets To raise money, users of funds will go to a primary market to issue new securities (either debt or equity) through a public offering or a private placement. The sale of new securities to the public is referred to as a public offering and the first offering of stock is called an initial public offering.

18. SECURITIES “securities” are shares, participation or interests in a  corporation  or in a commercial enterprise or profit-making venture and evidenced by a certificate, contract, instrument, whether written or electronic in character. 

19. Debt securities – examples are bonds, banknotes, debentures, and evidences of indebtedness. Equity securities – examples are shares of common stock and share of equity interest in a partnership or trust. Derivative contracts – examples are forwards, futures, options, warrants, and swaps. The originator, maker, obligor, or creator of the security is called the “Issuer”, while the person who buys and sells securities for his/her own account in the ordinary course of business is called the “dealer”. The person engaged in the business of buying and selling securities for the account of others is called the “broker”.

20. The sale of new securities to one investor or a group of investors (institutional investors) is referred to as a private placement. • However, suppliers of funds or the holders of the securities may decide to sell the securities that have previously been purchased. The sale of previously owned securities takes place in secondary markets. • The Philippine Stock Exchange (PSE) is both a primary and secondary market.

21. Financial Institutions – intermediaries that channel the savings of individuals, businesses, and governments into loans or investments.

22. Financial Institutions – intermediaries that channel the savings of individuals, businesses, and governments into loans or investments.

23. Commercial Banks – Individuals deposit funds at commercial banks, which use the deposited funds to provide commercial loans to firms and personal loans to individuals, and purchase debt securities issued by firms or government agencies.

24. Insurance Companies – Individuals purchase insurance (life, property and casualty, and health) protection with insurance premiums. The insurance companies pool these payments and invest the proceeds in various securities until the funds are needed to pay off claims by policyholders. Because they often own large blocks of a firm’s stocks or bonds, they frequently attempt to influence the management of the firm to improve the firm’s performance, and ultimately, the performance of the securities they own.

25. Mutual Funds Mutual funds are owned by investment companies which enable small investors to enjoy the benefits of investing in a diversified portfolio of securities purchased on their behalf by professional investment managers. When mutual funds use money from investors to invest in newly issued debt or equity securities, they finance new investment by firms. Conversely, when they invest in debt or equity securities already held by investors, they are transferring ownership of the securities among investors.

26. Pension Funds – Financial institutions that receive payments from employees and invest the proceeds on their behalf. Other financial institutions Include pension funds like Government Service Insurance System (GSIS) and Social Security System (SSS), unit investment trust fund (UITF), investment banks, and credit unions, among others.

27. Instruction: Go back to your answers written on the first page. After learning about the flow of funds from the discussion, who among your two friends will you going to lend your money?

28. Our topic for today includes the financial institutions that talks about the different banks and establishments that seeks to give an option to people where they can invest or save their financial resources. Truly, it is very important to invest our surplus resources so that it will generate interest or to add value to those resources .

29. In our daily lives, we were showered by God with the different resources including talents and skills. We better invest that one by showing and utilizing to consequently add value to it.

30. When was the last time you were able to show your skills and talents to others?

31. When you confidently show off your very best that you have to finish a task, what Marian Ignacian value did you exemplify?

32. Do you know someone whom you are aware that has talents/skills but just too shy to show it? How did you encourage him/her to show it?

33. Matthew 25:28-29 Take therefore the talent from him  — Ye angels, the ministers of my will, take from him the blessing which he has thus abused, and give it unto him which hath ten talents — As a further token of my acceptance and favour .

34. COPA

35. BREAK FOR 5 MINUTES :

36. What company logo is this?

37. What are the four functions of the VP for Finance?

38. Let us assess ourselves?

39. Reference/Instructional Materials Florendo, J. G. (2016). Fundamentals of Accountancy, Business, and Management 1. Quezon City: Rex Book Store Inc, . Binuya , M. V. (2016). Fundamentals of Accountancy, Business, and Management (Book 2). Manila,Philippines : JFS Publishing Services. Mr. Lester Ryan A. Alcana,CPA - Mindanao Mission Academy- learning module for grade 12 fundamentals of accountancy, business, and management 2 .