Student Name: Grade / Section:

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Teacher: Date Submitted:
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BUSINESS FINANCE, WEEK 2

I - Introductory Concept:

Financial Management is a vital activity in any organization. It is the process of

planning, organizing, controlling and monitoring financial resources with a view to achieve
organizational goals and objectives.

The Financial Institution

The flow of money begins with the depositor who opens a bank account and earns
interest from the account. In exchange these funds are lent by the banks to businesses.
They are borrowers who want to start up a new business, a new product, expand a
business, or find another investment opportunity. When the business earns profit, the
borrower of the funds will pay interest on the loan, and the depositor receives an interest in
his/her bank account.
The financial institution’s role is to act as a financial intermediary. A financial
intermediary serves as a link between the depositor who has the money and the lender who
needs the money. Financial institutions includes commercial banks, finance companies, life
and non- life insurance companies, mutual fund companies and private equity firms.
Most funds, especially public funds, are looking for investment opportunities that will
sustain their requirements for above five years or more, that is, long term and this is to
separate certain investor requirements from fast returns.
Financial management is managing a financial matters including analysis of
statements, assessment, or investment opportunities, which happens before one starts
investing and acquiring funds from different sources.
Financial instruments are the tools that help a business’ daily operations and help the
finance manager handles his/her cash, his/her short-term operating requirements, and long-
term business requirements.
Money market instruments are funds available for a short time ( 1 year or less than a
year). They are available most of the time and do not provide very high returns.

II - Learning Competencies:

This Learning Activity Sheet is written and designed to help you understand the
definition of finance, the activities of financial manager, and financial institutions and
markets.
After accomplishing this activity, you are expected to:
1. Distinguish a financial institution from a financial instrument and a financial market
(ABM_BF12-llla-b-2)
a. Define financial institutions, financial market, and financial instruments; and
b. Identify the types of financial institutions, financial market and financial
instruments.
2. Explain the flow of funds within an organization- through and from the enterprise-and
the role of financial manager. (ABM_BF12-llla-b-5)
III – Activities:

Activity 1: MY OPINION

Direction. Answer the following questions.

1. If you are going to save your extra allowance, where will you keep
it?__________________________________________________________
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2. Are you planning to engage in business in the future? What kind of
business?
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3. If your business seems to be profitable, are you planning to expand it?
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4. If you don’t have enough cash to pay the expansion, what should you do?
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Activity 2: MATCH UP

Directions. Arrange the jumbled words in Column A. Match it to its meaning in

column B.

A B

1. MARSKET NANFILAIC a. the sale of a new security direct to an

Investor/group of an investors.
2. TIONSTUTISNI FINNACAIL b. organized forums in which the
suppliers and users of various types
of funds can make transactions
directly
3. VATEIRP MENTSCEALP c. intermediaries that channel the
savings
of individuals, businesses, and
government into loan or investments
 Activity 3.

Financial Instruments and financial Markets

Direction. Match Column A with its characteristics in Column B
A B

A. Treasury Bills (T-Bills) 1.Issued by banks, credit unions and

B. Commercial Papers finance companies
C. Money Market Funds 2. issued by financially sound business to
D. Consumer credit, credit card fund investment in inventories and
debt receivables; maturity is about 9
months; generally low default risk as
business has a good credit standing
3. issued by the government; maturity
within
a year; not risky because government
must make an effort to pay
4. issued by banks or mutual fund
companies; maturity date is not specific;
the degree of default risk is low; usually
invested in money market instruments,
commercial papers and treasuries.
IV - Rubric for Scoring:

5 The answer is well written, organized and the idea is very relevant to the
question.
4 The answer is fairly written, and the idea is almost relevant to the question.
3 The answer is somewhat relevant to the question.
2 The answer is unclear.
1 The answer does not address the question.

V - Answer Key:
Activity 1: Answers will depend on the students.
Activity 2: A B

1. FINANCIAL MARKETS a. the sale of a new security direct to an

Investor/group of an investors.
2. FINANCIAL INSTITUTIONS b. organized forums in which the
suppliers and users of various types
of funds can make transactions
directly
3. PRIVATE PLACEMENTS c. intermediaries that channel the
savings
of individuals, businesses, and
government into loan or investments
 Activity 3:
A. 3
B. 2
C. 4
D. 1

VI. Reflection:

I learned that
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I realized that
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VI – Reference:

Business Finance Quarter 3 – Module 1.1: Introduction to Financial Management

Schools Division Office of Bataan

Teaching Guide for Senior High School, Business Finance

MARIA-JESUSA MEDROSO JINKY A. VILLAREAL

Writer EPS II, Mathematics