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FM Notes 3

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willjoy alvarez
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45 views1 page

FM Notes 3

Notes

Uploaded by

willjoy alvarez
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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1.

Investment decisions – it is the most important


decisions among the three decisions when it
NATURE AND DEFINITION OF comes to value creation.
FINANCIAL MANAGEMENT Value creation – meaning pinapataas natin yung
value ng Firm at yung mga owners or
Financial Management (FM) – Also referred as
sharesholder
managerial finance, corporate finance or business
is concerned with the acquisition financing and Determines the total amount of assets to be held
management of assets with some overall goal in by the firm.
mind.
Financial managers determine the size of the firm
Overall goal – Para sa mga Business na hindi and the composition of its assets. Sila yung
masyadong Malaki, ang goal nila is kumita na nagde-determine kung gaano kalaki yung assets
tinatawag na “Profitabilitiy” But basically, If you ng properties or assets composition
are a TRUE BUSINESS OWNER ang aim mo
dapat ay dalawa “Profitability and Sustainability” Left-side of the basic accounting (Assets =
Liabilities + Equity)
Profitability – Kumikita ka, but yung kumita ka
this year, need to be continue tuloy tulay and
maging sustainable, if yung mga customer ba is 2. Financing – second major decision
yun parin ang wants and needs nila pagdating ng
bukas of in the near of future. Right side of the basic accounting equation sya
naman yung sa Liability ang equity
Sustainability – You really have to think as a
business owner kung pano magtuloy tuloy yung Saan ba natin kukuhain ang puhunan? Tayo ba
business “going concern” assumption na ay uutang? Tayo ba ay sa sariling bulsa or galling
tinatawag sa acctg. Or may FOREVER daw sa mga investors or sharesholder or combination
pagdating sa business. Until such time na mag ng dalawa
decide ang business owner na mag- liquidate Obtaining a Capital at uutangin mo - interest
(convert assets into cash) expense
Acquisition financing – need mo malaman kung Kapag galling sa sharesholder ang puhunan mo –
saan mo dadalhin ang finances na ito at saan mo may shares sila sa income mo tru divedens.
ie-endorse (take a risk loan, investors,
shareholders) that will give you a future economic Paano nila babayaran yung mga ganitong cost of
benefit, ano-ano ba ang bibilhin mo na yan capital.
magbibigay ba satin ng future economic benefit.

GOAL OF FM
The goals of Financial Management are:
1. Profitability (short-term goal) – not only
profitable need na mas Malaki yung target market
as compared doon sa last year or previous years
na profit.
2. Sustainability (long-term goal) – going
concern or may forever na tuloy tuloy
More SPECIFIC, THE FINANCIAL MANAGER
MUST, kailangan raw

TYPE OF FINANCIAL DECISIONS

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