Financial Management
True or False. Finance is the act of giving monetary and moral support for an enterprise.
FALSE. Finance is the act of giving monetary support for an enterprise.
Someone who invests/buys stocks is called?
Give at least 2 guiding principles of a financial management system.
Consistency, Integrity, Accountability, Transparency, Financial Stewardship, Accounting Standards
When issued, it gives rise to a financial asset on one hand and a financial liability on the other.
Financial instrument
What is the main difference between accounting and finance?
Accounting is the recording or bookkeeping of financial transactions while Finance is the review and analysis of the reports from accounting activities.
What's your main goal as a shareholder?
What do you call an entrepreneur that has a progressive plan for his/her business however does not have enough cash to pay for it?
User/Demander of funds
What are the three (3) types of financial instruments?
Derivatives, Asset Class, Cash
What are the 3 types of Finance?
Public, Corporate and Personal
What would should be considered when buying stocks? Profitability or Availability of Cash?
Both should be considered.
What happens inside a financial system?
Allows savers of funds to lend funds to users of funds.
This is type of financial instrument depends its value in response changes in interest rates.
Derivatives
True or False. As a financial manager, one of the functions that you need to perform is to make the final decision if the business should continue or not depending on the profit generated by the company. Why do you say so?
False. Only the owners of the company can make the final decision.
How do you measure shareholder's wealth?
Current market price of the corporation's stocks
Their role is to channel the savings of individuals, businesses, and governments into loans or investments.
Financial Institutions
Give an example of a debt-based financial instrument.
Bonds, Mortgage
What is the difference between FINANCE and FINANCIAL MANAGEMENT?
Finance is the act of managing money while FINANCIAL MANAGEMENT is the efficiency and effectivity of managing the money/funds.
Give at least three (3) uncontrollable factors that influence market price.
macroeconomic conditions, political stability, prospects of the industry where the company operates, general market sentiment, flow of foreign funds invested in the PH Stock Market
Briefly explain the difference between a financial market and financial institution.
Unlike the financial markets where the saver and user of funds knows to whom the fund went and from whom the funds came, Financial Institutions served as an intermediary to the supplier and users of funds.
State the difference between a debt-based and equity based asset class.
Debt-based reflects a loan the investor made to the issuing entity while equity-based reflects ownership of the issuing entity.