Name: BALATUCAN, RHEA N.
Rating:__________________
Course: BSMA -2B Date: 08/02/26
Exercise 1.1
Instructions: Write True if the given statement is correct and if False, write the correct word or phrases to
make the statement correct.
(False) Financial resources 1. Financial management is a functional unit of a business organization that
sets policies towards organizing, planning, controlling, and directing the proper use and allocation of its
physical resources.
(False) Dividend Decisions 2. Financial management function focuses on the areas of investment,
financing and trading decision.
True 3. The financial management function is important in business organization
to guarantee rational and attractive return on investment made in the business.
(False) Financial resources 4. One function of financial management is to plan, direct and control the use
of manpower.
True 5. Financial management can create pleasant and amiable relations with
company stakeholders.
True 6. Another function of financial management is to build up appropriate
controls to secure proper use of financial resources.
(False) Cash 7. Financial management deals with the efficient planning and control on the
inflow and outflow of revenue.
True 8. The financial manager needs to ensure that the company meet the
obligation and raise the required funds for the business.
True 9. Profit is an inherent component to ensure business sustainability and
survival.
(False) Product Markets 10. Capital markets are where products and services are being sold.
Name: BALATUCAN, RHEA N. Rating:____________________
COURSE: BSMA-2B Date: 08/02/26
Exercise 1.2
Identification: Determine the appropriate terminology based on the given statement.
Financial Management 1. It carries an interlocking coordination within the business.
structure such as production, marketing, logistics and personnel functions.
Capital Market 2. It is where securities or company shares are traded and this would involve a
high amount of risk.
Financial Manager 3. His actions directly affect the financial condition and performance of the
business entity.
Capitalization 4. The appropriate magnitude or volume of funds needed for efficient
operations.
Investment Decisions 5. Decision to be made would involve capital budgeting or financial plan
preparation.
Financing Decisions 6. A decision that would create the best financing mix or capital structure.
Operating Decisions 7. A decision that deals with cost control or strategies to increase in
revenue.
Equity financing 8. The type of financing that refers to the issuance of company stocks.
Debt Financing 9. The type of financing that involve loan or fund borrowing
Profit [Link] inherent component to ensure business sustainability and survival.
Name: BALATUCAN, RHEA N. Rating:___________________
Course: BSMA-2B Date: 08/02/26
Exercise 1.3
Multiple Choice: Select the most appropriate answer based on the given statement.
1) The important role of the financial manager is-
A) Risk minimization
B) Profit maximization
C) Maximize wealth
D) Minimize return.
2) Corporate owners receive realizable return through –
A) Earnings per share and cash dividends
B) Increase in share price and cash dividends.
C) Increase in share price and earnings per share.
D) Profit and earnings per share.
3) The wealth of the company owners is shown thru –
A) Revenue
B) Earnings per share.
C) Stock value
D) Profit
4) Wealth maximization refers to enhancing the wealth of
A) The board of directors
B) The firm’s employees.
C) The government
D) The firm’s stockholders.
5) The goal of profit maximization would result in priority for –
A) Cash flows available to stockholders
B) Risk of the investment.
C) Earnings per share
D) Timing of the returns.
6) Even if the data are collected, it would undergo a process of analysis and interpretation so it can be
used to make economic decisions.
A) Research
B) Knowledge
C) Time
D) All of these (A + B + C)
7) The following needs are to be considered in order to make proper allocation of funds
. A) Business entity size and its capability for possible growth
B) Status of assets where the funds will be used; either for long-term or short-term
C) Manner on which the funds are raised
C) All of the above
8)It places a heavy burden to monitor and make sure compliance is done to every set of procedures and
policies with regard to the management of company’s financial resources.
A) Power
B) Cost
C) Accountability
D) Confidence
9)Financial managers need to make judgment call specially when the operations of the business will be
affected.
A) Power
B) Accountability
C) Cost
D) Confidence
10)Since financial data would require analysis and interpretation, the company would need experts or
professionals to do the job.
A) Power
B) Cost
C) Accountability
D) Confidence
Name: BALATUCAN, RHEA N. Rating:________________
Course: BSMA-2B Date: 08/02/26
Classroom Activity
Ask the students to write an essay based on the following topics:
A .The Importance of Financial Management in Business Organization
Financial management is very important in every business organization because it helps the
company manage its money wisely. It involves planning, organizing, controlling, and monitoring the
company’s financial resources. With good financial management, a business can pay its expenses on time,
avoid unnecessary spending, and make better financial decisions. It also helps the company earn more profit,
prepare for unexpected situations, and achieve its short-term and long-term goals. Businesses that manage
their finances properly are more likely to grow, remain stable, and become successful.
For example, a small clothing store earns ₱100,000 in one month. Through proper financial
management, the owner decides to use ₱40,000 to buy new stocks, ₱20,000 to pay rent and utilities, ₱20,000
for employee salaries, and ₱20,000 for savings and future expansion. Because the money is managed well,
the store can continue operating smoothly and even open another branch in the future. This shows that
financial management plays an important role in the success of every business.
b) The Role of the Financial Manager on Company’s Performance
A financial manager plays an important role in helping a company achieve its goals. They are
responsible for planning the company’s budget, monitoring income and expenses, preparing financial
reports, and making decisions about investments and financing. They also help reduce unnecessary costs,
manage financial risks, and ensure that the company has enough funds for its daily operations. By making
wise financial decisions, a financial manager helps improve the company’s profitability and overall
performance.
For example, in McDonald’s, the financial manager prepares the budget for food ingredients,
employee salaries, restaurant maintenance, and marketing. If the cost of ingredients increases, the financial
manager looks for ways to reduce expenses without affecting the quality of the food. They may negotiate
with suppliers for lower prices or control unnecessary spending. By managing the company’s finances
carefully, McDonald’s can continue serving customers, and earn higher profits. This shows that a financial
manager plays a key role in improving a company’s performance and ensuring its long-term success.
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