Business Finance

Promote Savings Function

spending units are flowed into investments

these markets are offering potential rate of return with relatively low-risk.

Payment Function

to purchase goods and services through the checking account that commercial banks offer as well as other type of banks authorized to offer such facilities.

Protection against risk function

Life, property, and casualty insurance policies are inevitable to the business, consumer and government.

Means to wealth functions

different economic units that have decided to accumulate savings

different financial markets are excellent placement for such savings.

Provide Liquidity Function

Readily accessible to the financial market for conversion into cash

with little or no risk at all.

Credit Facility Function

Markets make credit facility available to financial consumers and investments.

Financial System

Financial activities being performed by the different economic units whose activity are closely related to each other

Financial Analysis

To evaluate the past and current performances of the firm and to make financial forecast in the future.

Comparison of one company against another belonging to the same industry

Investor's standpoint

Forecasting the future of the firm is what financial analysis is all about.

Firm's management standpoint

Financial analysis serves as their guide with the firm's future conditions.

Starting point to undertake actions to improve the firm's future performance.

Tools and Techniques in Financial Analysis

Composed primarily of horizontal analysis and vertical analysis.

The financial analysts’ should have a:

It affect the evaluation of financial statements

Experience, Judgment, and Temperament.

Finance

Deals with the acquisition, management, and investment of financial resource to be able for the company to attain its objectives.

Three Areas of Finance:

Financial Institution

Financial Instruments

Financial Market

Financial Institution

An organization or place where financial transactions happened

Financial Instruments

Is a document which signifies a legal or binding agreement between two parties.

Financial Market

A means or way for the buying and selling of stocks, bonds, and other financial instruments