SENIOR HIGH SCHOOL

BUSINESS FINANCE
Quarter 3 – Module 1:
Introduction to Financial
Management
Business Finance – Grade 12
Alternative Delivery Mode
Quarter 3 – Module 1: Introduction to Financial Management
First Edition, 2021

Republic Act 8293, section 176 states that: No copyright shall subsist in any work of
the Government of the Philippines. However, prior approval of the government agency or office
wherein the work is created shall be necessary for exploitation of such work for profit. Such
agency or office may, among other things, impose as a condition the payment of royalties.

Borrowed materials (i.e., songs, stories, poems, pictures, photos, brand names,
trademarks, etc.) included in this module are owned by their respective copyright holders.
Every effort has been exerted to locate and seek permission to use these materials from their
respective copyright owners. The publisher and authors do not represent nor claim ownership
over them.

Published by the Department of Education

Secretary: Leonor Magtolis Briones
Undersecretary: Diosdado M. San Antonio

Development Team of the Module

Writer: Louell E. Bodios, Maricris C. Cancino and Mara Ellyn H. Lacson
Editors:
Reviewers:
Illustrator:
Layout Artist: Louell E. Bodios
Management Team:

Printed in the Philippines by ________________________

Department of Education – Bureau of Learning Resources (DepEd-BLR)

Office Address: ____________________________________________

____________________________________________
Telefax: ____________________________________________
E-mail Address: ____________________________________________
 SENIOR HIGH SCHOOL

BUSINESS FINANCE
Quarter 3 – Module 1:
Introduction to Financial
Management
Introductory Message
For the facilitator:

Welcome to the Business Finance Alternative Delivery Mode (ADM) Module on Introduction
to Finance Management!

This module was collaboratively designed, developed and reviewed by educators both from
public institutions to assist you, the teacher or facilitator in helping the learners meet the
standards set by the K to 12 Curriculum while overcoming their personal, social, and economic
constraints in schooling.

This learning resource hopes to engage the learners into guided and independent learning
activities at their own pace and time. Furthermore, this also aims to help learners acquire the
needed 21st century skills while taking into consideration their needs and circumstances.

In addition to the material in the main text, you will also see this box in the body of the module:

Notes to the Teacher

This contains helpful tips or strategies that will
help you in guiding the learners.

As a facilitator, you are expected to orient the learners on how to use this module. You also
need to keep track of the learners' progress while allowing them to manage their own learning.
Furthermore, you are expected to encourage and assist the learners as they do the tasks
included in the module.
For the learner:

Welcome to the Business Finance Alternative Delivery Mode (ADM) Module on Introduction
to Financial Management!

This module was designed to provide you with fun and meaningful opportunities for guided
and independent learning at your own pace and time. You will be enabled to process the
contents of the learning resource while being an active learner.

This module has the following parts and corresponding icons:

This will give you an idea of the skills or

What I Need to Know
competencies you are expected to learn in the
module.
This part includes an activity that aims to check
What I Know what you already know about the lesson to take. If
you get all the answers correct (100%), you may
decide to skip this module.
This is a brief drill or review to help you link the
What’s In
current lesson with the previous one.

In this portion, the new lesson will be introduced to

What’s New
you in various ways; a story, a song, a poem, a
problem opener, an activity or a situation.
This section provides a brief discussion of the
What Is It
lesson. This aims to help you discover and
understand new concepts and skills.
This comprises activities for independent practice
What’s More to solidify your understanding and skills of the
topic. You may check the answers to the exercises
using the Answer Key at the end of the module.
This includes questions or blank
What I Have Learned
sentence/paragraph to be filled in to process what
you learned from the lesson.
This section provides an activity which will help
What Can I Do
you transfer your new knowledge or skill into real
life situations or concerns.
This is a task which aims to evaluate your level of
Assessment
mastery in achieving the learning competency.

In this portion, another activity will be given to you

Additional Activities
to enrich your knowledge or skill of the lesson
learned.

Answer Key This contains answers to all activities in the

module.
At the end of this module you will also find:

References This is a list of all sources used in developing this

module.

The following are some reminders in using this module:

1. Use the module with care. Do not put unnecessary mark/s on any part of the module.
Use a separate sheet of paper in performing the exercises.
2. Don’t forget to answer What I Know before moving on to the other activities included
in the module.
3. Read the instruction carefully before doing each task.
4. Observe honesty and integrity in doing the tasks and checking your answers.
5. Finish the task at hand before proceeding to the next.
6. Return this module to your teacher/facilitator once you are through with it.
If you encounter any difficulty in answering the tasks in this module, do not hesitate to
consult your teacher or facilitator. Always bear in mind that you are not alone.
We hope that through this material, you will experience meaningful learning and gain deep
understanding of the relevant competencies. You can do it!
 What I Need to Know

This module was designed and written with you in mind. It is here to help you the basics of
finance, its definition and the activities of the financial manager. The scope of this module
permits it to be used in many different learning situations. The language used recognizes the
diverse vocabulary level of students. The lessons are arranged to follow the standard
sequence of the course. But the order in which you read them can be changed to correspond
with the textbook you are now using.

The module has only one lesson, namely:

• Lesson 1
- Defining finance;
- Describing who are responsible for financial management within an
organization;
- Describing the primary activities of the financial manager and how the
financial manager helps in achieving the goal of the organization.

After going through this module, you are expected to:

1. explain the major role of financial management and the different individuals
involved. (ABM_BF12-IIIa-1)
 What I Know

The following multiple-choice items are for you to answer. Choose the letter of the correct
answer and write your answers in your answer sheet.

1. The main aim of financial management is to increase _________.

a. sales revenue c. shareholders’ wealth
b. market share d. profit

2. Who is the one responsible in making investment, financial and dividend

policy-making decisions of the firm?
a. Creditors c. Employees
b. Finance manager d. Supplier

3. One right goal for managers is to _________.

a. maximize their own remuneration and perks c. maximize shareholders’ wealth
b. improve working condition of employees d. increase the market share

4. Which is a part of top management of the company?

a. Chief Executive Officer c. Creditors
b. Suppliers d. Vice President in Finance

5. Which is one of the ultimate goals of the finance manager?

a. Maximize market price of shares of stocks c. Maximize profit
b. Maximize liabilities d. Maximize asset

6. Which of the following is part of financial decision making?

a. financing decision c. investment decisions
b. dividend decisions d. all of the above

7. Which is concerned with allocating, raising, and controlling of the funds of the firm?
a. finance c. financial management
b. budgeting d. accounting

8. Which is an efficient allocation of funds to specific assets?

a. financing c. dividends
b. assets d. investing

9. The finance manager is responsible in maximizing the value of the utility owned by
a. creditors c. board of directors
b. investors d. banks

10. Which is a NOT a factor that influence market price?

a. Profitability
b. Competent management
c. Political stability
d. Marketing strategy
 Lesson Explaining the Major Role of
Financial Management and the
1 Different Individuals Involved.

This module will help you will learn what is finance and explain the major role of financial
management and the different individuals involved. It aims to build basic concepts defining
finance, the activities of the financial manager and other individuals involved. So, ready your
working space to make this lesson more meaningful.

What’s In

Recently, the world has been affected with the pandemic, COVID-19. During this time most of
the households are quarantined and are not allowed to get out. How were your family able to
manage the needs of the family? Below is an inventory form of the need and wants of your
family during this time. List down all your needs and wants and the amount in a monthly basis

Needs Amount in
Pesos
1
2
3
TOTAL
Wants Amount in Peso
1
2
3
TOTAL
Net Amount

Guide Questions:
1. What are the needs of your family during the pandemic? How about the
wants?
2. What are the sources of income of your parents?
3. Did your parents manage the resources they have? How can you say so?
 What’s New

Most of the families during the pandemic received assistance from the government as a help
to affected areas. Assuming your family received an amount of PhP 8,000. Based on the first
activity we had, using the same needs and wants and listed amounts. Answer the following
questions:

1. How much is the total peso amount for needs? How about for wants?
2. How much is the excess?
3. If you are to cross-out an item to cover the given amount, what will you
cross-out?
4. If you are to purchase all the items on the list including the ones you
crossed-out, how much cash would you need to support all the expenses?
5. What other sources of cash you know?

What Is It
?

To fully understand the concepts in finance, read and understand carefully the concepts that
will be presented to you.

FINANCE IN DAILY LIFE

Based on the activity that we have previously, you were able

to separate the needs and wants of your family. You as well
decided on what to prioritize based on the given amount.
You were also able to determine whether you need to have
more funds or cross-out some items to cover the amount
given. Mostly, your activities at home involves decisions on
how to use your funds, thus it is called a finance decision.
In business, finance decision deals with racing or acquiring of funds from outside sources and
not from the ordinary results of business operation. In other words, financing decisions are
made when the business needs to borrow money.
Finance, on the other hand is defined as the science and art of managing money. (Gitman &
Zutter, 2012). It is also defined as the management of money and includes activities such as
investing, borrowing, lending, budgeting, saving, and forecasting.
(https://corporatefinanceinstitute.com)

Income Allocation of a Household in a Month

3% 12%
13%

10%

62%

Electricity Water Foods Internet Savings

Table 1. Income Allocation of a Household in a Month

Given an allowance cap of PhP 8,000 in our previous activity, you were able to list down
expenses (needs and wants) and accumulated a certain amount. If you exceed with the given
amount you tend to drop some items from the list until such time that your will meet the needed
required amount to buy all your family’s needs and wants. What you did is called budgeting.
Budgeting is the act of estimating revenue (in from the allowance cap) and expenses over a
period of time (in our case, in a monthly basis).
In our case you have savings or excess of cash as shown in Table 1, you can use them to
purchase other items that will arise on the next day or you can have it saved. Take note that
these excess money presents opportunity for investments. Investments come in many forms
that will generate more income or appreciate in the future. Instead of hiding your cash under
your bed or in the piggy banks have it deposited in the bank to earn interest.
In some instances, family’s needs exceed to the allowance cap for the month. Therefore, your
parents would tend to seek for other ways to suffice the needed amount. Your parents would
either borrow from neighbors, private individuals, from a lending institution or pawn a jewelry,
thus this is called sources of funds. When faced with financial difficulties, we look for people
or institutions that will give us the money we need.
Take note that finance is mostly concerned with decisions about:

• How much of their earnings the spend

• How much they save of how much they need
• How much they invest their savings
• How they raise additional funds they need (Gitman)
Furthermore, some families have their own businesses as a source of additional income for
the family. These businesses could be in different forms:

• Sole Proprietorship – a business owned by one person and operated for his or her own
profit.
• Partnership – a business owned by two or more people and operated for profit.
• Corporation – an entity created by law owned by shareholders.

In this lesson, we will mainly focus on

corporation. Corporations may either be
privately owned or publicly owned. Privately
owned corporations are often owned by family
members whose stocks may not be offered to
outsiders unless consent by the family
members secured. Companies which are
publicly listed are owned by unrelated
investors and are traded in organized
exchanges like the Philippine Stock
Exchange. While there are many
stockholders, there is generally a group of investors or a family which controls each listed
company. For example, in the case of BPI, the biggest stockholder is Ayala Corporation and
in the case of Banco de Oro, it is SM Investment Corporation. Prices of stocks of listed
corporations are driven by several factors such as the earnings of the companies, the
prospects of the industry where these companies operate, general market sentiment, and the
economic prospects of the country, among others.
Buying stocks from a corporation will make you a shareholder of the company. According to
Investopedia, a shareholder, also referred to as a stockholder, is a person, company, or
institution that owns at least one share of a company’s stock, which is known as equity.
Because shareholders are essentially owners in a company, they reap the benefits of a
business’ success. These rewards come in the form of increased stock valuations, or as
financial profits distributed as dividends. Conversely, when a company loses money, the share
price invariably drops, which can cause shareholders to lose money, or suffer declines in their
portfolios’ values.
Being an owner of the company, one of the objectives that one wants to achieve is of course
to be profitable and have a lot of cash. Can success be attributed to profitability alone? Profits
can be a metric of measuring business’ success but there are other factors to consider.
Remember in the first year of operation, business is not earning profit but it can still be
considered successful. What is essential is that it can survive even the business is not earning
profit.
Having a lot of cash has also an advantage for a business, it also signals unhealthy company
practices. It may entail that the management has not been putting the company’s resources
into good use. Also, keeping too much cash in the books is like hiding your extra money under
your bed. They will be missing out on investment opportunities.
So, as a shareholder your overall objective is wealth maximization.
Let us go over with the sample situations below to fully understand wealth maximization.

Sample Problem 1:
Fina, a Grade 12 ABM student bought 10 shares of Globe Telecom at PHP2,510 each on
September 9, 2019. This bring her investments to PHP25,100. What happens to the value of
her investment if the price goes up to PHP2,600 per share or it goes down to PHP2,300 per
share?

An increase of the share price to PHP2600 per share means that people are willing to buy the
shares for that amount. If Fina were to sell her share at this point, it will result to a profit of
PHP90 per share or PHP900 on their whole investment. Hence, the value of investment
increased from PHP25,100 to PHP26,000. Therefore, there is an increase in shareholder’s
wealth.
On the other hand, a decrease in the share price to PHP2,300 per share means that people
are only willing to buy the shares for PHP2,300. If Fina were to sell her investment at this
point, she will receive PHP23,000 which would result to a loss of investment leads to a loss of
PHP2,100. The decrease in value of her investment leads to decrease in shareholder’s
wealth.

FACTORS THAT INFLUENCE MARKET PRICE

There are two factors that affects market price and it can be grouped into factors that the
management can control and external factors that cannot be controlled by the management.

Controllable by Management Uncontrollable External Factors

• Profitability • Macroeconomic conditions
• Having a good liquidity and
• Political stability
reasonable leverage position
• Prospects of the industry where the
• Dividends
company operates
• Competent management which
affects the company’s operating • General market sentiment
efficiency
• Coming up with corporate plans that
• Flow of foreign funds invested in the
improve the business prospects of
Philippine stock market
the company.

Profitability
Profit is a measure of the financial performance of a company for a period of time. Although it
is a major driver for increasing the value of stock, an investor should not rely on profits alone.
As discussed earlier, it is possible that the company has profits but its cash flow is negative.
Let us try the sample problem below.
Sample Problem 2
Suppose the following Income Statements and Cash Flow Statements of companies A, B
and C were presented to you. Which do you think is a more attractive company?
Company A

Income Statement Cash Flows

Sales P 100,000 Collection from Customers P 0
Less: Costs 50,000 Payment of Expenses 50,000
Profits P 50,000 Net Cash Flow (P 50,000)

Company B

Income Statement Cash Flows

Sales P 100,000 Collection from Customers P 100,000
Less: Costs 150,000 Payment of Expenses 50,000
Profits (P 50,000) Net Cash Flow P 50,000

Company C

Income Statement Cash Flows

Sales P 100,000 Collection from Customers P 100,000
Less: Costs 70,000 Payment of Expenses 70,000
Profits P 30,000 Net Cash Flow P 30,000

Company A is profitable but generated negative cash flows which resulted from the
uncollected accounts receivable of PHP100,000. Without adequate cash inflows to meet its
obligations, the company will face liquidity problems, regardless of its level of profits.
Company B on the other hand has a positive cash flow but is unprofitable. This is a result of
the company’s delay in payment of its costs. Accordingly, the Company will soon have to pay
the remaining PHP100,000 liability and its cash will no longer be sufficient. Again, without
adequate cash inflows to meet its obligations, the company will face liquidity problems.
Company C is profitable and has a positive cash flow. Based on the information provided,
Company C seems to be the best.

Good liquidity and reasonable leverage position.

Liquidity and leverage refer to the company’s management of the type and amount of assets
and liabilities that it will hold in the course of its operations.
Dividends.
Holders of shares receive dividends from a corporation as returns on their investments in form
of cash or other properties. Companies which have better dividend policies are generally more
attractive than companies who do not pay out dividends. Note that there may be times that
companies do not pay out dividends because of future expansions. Same with the other
factors affecting share price, dividend policies should go hand in hand with other factors in
determining market price.
Competent management.
Competent managers may have any of the following attributes:
1) visionary
2) decisive
3) people-oriented,
4) inspiring,
5) innovative,
6) respected and
7) experienced/seasoned manager

A competent management looks attractive for it builds trust and confidence that the money
invested is in the good hands of the persons involved in the company.

Corporate Plans that Improve the Business Prospects.

Sample Problem 3:

Company A which is in the business of selling Halo-halo in the Brgy. Robles area for 5 years.
Company A is consistently earning profits and has a positive cash flow. When asked how
Company A sees itself after 5 more years, Company A answered that it would continue to sell
Halo-halo in Brgy. Robles.

On the other hand, Company B sells Buko Juice in Brgy. Cabacungan area for 5 years.
Company B is consistently earning profits and has a positive cash flow. When asked how
Company B sees itself after 5 more years, Company B answered that it has generated enough
cash to expand its business to La Granja area to take advantage of the growing demand of
Buko Juice in La Granja.

Which of the two company’s would you invest?

Between Company A and Company B, which would be a better investment? Company B.

Since it has more concrete future prospects allowing investors to hope for better revenues and
net income.

External Factors

These factors influence the general reaction of investors in making an investment decision.
Its effect is not only to a specific company but on all companies or a group of companies under
similar circumstances. Such factors are a result of the environment a company operates in
rather than the decisions of the company’s management.

Given the factors that influence market price the next challenge that shareholders will face is
on how they are going to achieve their objectives, thus it can be made true through financial
management.

Financial Management

Financial management deals with the decisions that are supposed to maximize the value of
shareholders’ wealth. (Cayanan) These decisions will ultimately affect markets perception of
the company and influence the share price. The goal of financial management is to maximize
the value of shares of stocks. It also is focused on capital budgeting decision or investment
decision on acquisition of assets and its corresponding financing scheme.
The Role of Financial Management

• To ensure regular and adequate supply funds.

• To ensure returns to shareholders through capital gains which is which are dependent
upon the earning capacity and the market price of the share.
• To ensure optimum funds utilization at least cost.
• To ensure investment of funds in safe venture so that adequate rate of return can be
achieved.
• To design a sound capital structure by maintaining a fair composition of capital through
a balance between debt and equity capital. (De Guzman, A.A., 2019)

Individuals Involved in Financial Management

1. The senior leaders of an organization are responsible for all aspects of its financial
health. They are the ones understands the unit’s financial situation and do not allow
unintended deficits to occur. They are accountable for the resources entrusted to them
that includes the funds, facilities and recruitment of employees, even if the control and
tasks have been delegated to their staff, under command of responsibilities. Example:
Shareholders, and Board of Directors.

2. Unit heads are responsible for their internal financial management and to develop
budgeting, financial reporting and management practices. Units are encouraged to
develop an oversight process that builds on best practices. (De Guzman, 2019)
Managers of the corporation are responsible for making the decisions for the company
that would lead towards shareholders’ wealth maximization.
Example: Chief Executive Officer, VP for Production, Marketing, Finance,
Administration and the likes.

On the next lessons you will fill in the shoes of a Chief Financial Officer (CFO) and every
problem that you will encounter for this course should be dealt with having shareholders wealth
maximization in mind.

What’s More

Read and understand the following situation and answer it in your answer sheet.

Company D has been operating in La Castellana for 7 years now by selling coffee. It is
consistently earning profit and has a positive cash flow. It plans to expand its operation to a
nearby town since it has enough cash and trying to venture out to new menus using coffee to
add variety to its offerings.

Company E is in the business for 10 years now. It is a leading company in selling face masks.
Due to the current situation, they should increase the production to meet current demand for
the said product. The company earns profit and has a positive cash flow but having problems
with the tax regulation authority due to poor management.

Company F is a company that is planning to invest for a new business venture considering
Company D and Company E as a future investment.
Questions:
1. If you are the owner of Company F:
a. What factors will you consider in investing with:
1. Company D?
2. Company E?
b. Which company would you choose to invest? Why?

What I Have Learned

Finance is defined as the science and art of managing money. (Gitman & Zutter, 2012). It is
also defined as the management of money and includes activities such as investing,
borrowing, lending, budgeting, saving, and forecasting. (https://corporatefinanceinstitute.com)
Financial management deals with the decisions that are supposed to maximize the value of
shareholders’ wealth. (Cayanan). The goal of financial management is to maximize the value
of shares of stocks.
The Role of Financial Management

• To ensure regular and adequate supply funds.

• To ensure returns to shareholders through capital gains which is which are dependent
upon the earning capacity and the market price of the share.
• To ensure optimum funds utilization at least cost.
• To ensure investment of funds in safe venture so that adequate rate of return can be
achieved.
• To design a sound capital structure by maintaining a fair composition of capital through
a balance between debt and equity capital. (De Guzman, A.A., 2019)

Individuals Involved in Financial Management

1. The senior leaders of an organization are responsible for all aspects of its financial
health (De Guzman, A.A., 2019). Example: Shareholders, and Board of Directors.

2. Unit heads are responsible for their internal financial management and to develop
budgeting, financial reporting and management practices (De Guzman, A.A., 2019).
Example: Chief Executive Officer, VP for Production, Marketing, Finance,
Administration and the likes.
 What Can I Do

Company G is a company whose main operation is Saba Sticks production located in La

Castellana, Negros Occidental. They have been in the business for 5 years now with good
financial records and flow of cash. The company aims to sell their product across nearby
provinces like Negros Oriental, Panay and Cebu in 5 years. The company is also innovating
their products for more variations and flavors. With this dream in mind, they wished to sell
shares of stocks to increase capitalization. They are also planning to invest through the
Philippine Stock Exchange to generate more funds in the future.

At present, the company is facing some problems that somewhat affects its operation. They
are facing with the delivery of goods due to the pandemic happening in the area. Production
is slowing down due to skeletal reporting of the employees; delivery is also affected due to
border closures and banana and other raw materials are taking time to arrive. Prices of raw
materials also tries to increase that affects the product’s selling price. In spite of this
adversities, the management is visionary and determined to provide high quality products and
services to its loyal consumers.

1. What are the attributes of the company that contributes to their maximization of wealth?
2. As a learner, would you invest to this company? Explain your answer.
3. If you are the owner of Company G, how will you address the problems at sight?

Assessment

The following multiple-choice items are for you to answer. Choose the letter of the correct
answer and write your answers in your answer sheet.

1. The main aim of financial management is to _________.

a. increase sales revenue c. increase market share
b. increase stockholders’ wealth d. increase profit

2. Which is one of the ultimate goals of the finance manager?

a. Maximize market price of shares of stocks c. Maximize profit
b. Maximize liabilities d. Maximize asset

3. One right goal for managers is to _________.

a. maximize their own remuneration and perks c. maximize shareholders’ wealth
b. improve working condition of employees d. increase the market share
 4. Which is concerned with allocating, raising and controlling of the funds of the
firm?
a. Finance c. Finance Management
b. Budgeting d. Accounting

5. Who is the one responsible in making investment, financial and dividend

policy-making decisions of the firm?
a. Creditors c. Employees
b. Supplier d. VP for Finance

6. Which of the following is part of financial decision making?

a. financing decision c. investment decisions
b. dividend decisions d. all of the above

7. Which is a part of top management of the company?

a. Chief Executive Officer c. Creditors
b. Suppliers d. Vice President in Finance

8. Which is an efficient allocation of funds to specific assets?

a. financing c. dividends
b. assets d. investing

9. The finance manager is responsible in maximizing the value of the utility owned by
a. creditors c. shareholders
b. investors d. banks

10. Which is NOT a factor that influence market price?

a. The company is incurring loss to its operation
b. The company has a competent management
c. The tax policies in the area is unstable
d. The promotional campaign is effective and efficient

Additional Activities

Answer the following questions on a separate piece of paper.

1. Aside from the factors mentioned in our discussion, what other factors can influence the
investor’s perception on the company’s performance which would ultimately affect share
price?

2. Why is the study of finance important to you?

What’s In
Possible Answer: Your answer may vary depending on you family’s situation.
Needs Amount in Pesos
1 Rice 3,600
2 Sardines 300
3 Pork 600
TOTAL 4,500
Wants Amount in Pesos
1 Internet fee 1,699
2 Cellphone load 1,000
3 Soft drinks 500
TOTAL 3,699
Net Amount 7,699
• Amount is for monthly consumption
1. Most of my family’s needs are food. The wants are more on loads and internet.
2. Salary.
3. Yes, because they can manage to provide us with our basic needs and wants that are
essential in our studies.
What I Know
1) C
2) B
3) C
4) A
5) A
6) D
7) C
8) A
9) B
10) D
Answer Key
 Assessment
1. B
2. A
3. C
4. C
5. D
6. D
7. A
8. A
9. B
10. D
What Can I Do
Possible answers. Answers may vary.
1. The attributes of Company G that will contribute to maximization of the company’s wealth
are: a.) profitability as evidenced by good financial records and flow of cash; b.) the clear
plans/objectives; and c.) good management.
2. As a learner, Yes, I will invest in company G. Due to the fact that it possesses attractive .
attributes I am certain that my money will gain and go far. It will also yield a higher market
price in the future that will allow my investment to gain in some instance that I will sell my
share.
3.) As an owner of Company G, I will ensure that the delivery of the products will still be on
time by providing an online scheme of ordering to fast track the delivery. Invest in delivery
equipment to keep the movement of the product from the plant to the consumers with ease.
I will also ensure that the production will be at the most number to supply the much-needed
demands of the consumers. Ensure employees welfare by providing safety measures,
provide private vehicles for their transportation and that they can report and prepare the
needed quantity of production with utmost quality assured.
What’s More
Possible answers. Answers may vary.
A.
1. Profitability and Clear corporate plans.
2. Poor management of funds and Inability to cope with the current situation.
B. I will choose Company D because their market price is higher due to good financial
stability as characterized by good profitability and good cash flows. And they have a clear
corporate plan that provides me as an investor a clear path unto where my investment is
going.
www.investopedia.com: https://www.investopedia.com/articles/basics/04/100804.asp
Harper, D. R. (2019, November 19). www.investopedia.com. Retrieved from •
(2017), C&E Publishing, Inc.
Business Finance in the Philippine Setting for Senior High School, Aduana, N.L., •
Publishing, Inc.
Business Finance for Senior High School, De Guzman, A.A., (2019), Lorimar •
Commission on Higher Education, 2016 ©, Chairperson: P.B. Licuanan, Ph. D.
Teaching Guide for Senior High School BUSINESS FINANCE – Published by •
References
Additional Activities
Possible answers. Answers may vary.
1. The factors that can influence the investor’s perception on the company’s performance
which ultimately affect share price are:
1. Stock prices are driven by a variety of factors, but ultimately the price at any given
moment is due to the supply and demand at that point in time in the market.
2. Fundamental factors drive stock prices based on a company's earnings and
profitability from producing and selling goods and services.
3. Technical factors relate to a stock's price history in the market pertaining to chart
patterns, momentum, and behavioral factors of traders and investors. –
(Investopedia, Harper, D.H., 2019)
2. Answers may vary
For inquiries or feedback, please write or call:

Department of Education - Bureau of Learning Resources (DepEd-BLR)

Ground Floor, Bonifacio Bldg., DepEd Complex

Meralco Avenue, Pasig City, Philippines 1600

Telefax: (632) 8634-1072; 8634-1054; 8631-4985

Email Address: [email protected] * [email protected]