FERDINAND L.
TIMBANG, BUSINESS FINANCE FOR
SENIOR HIGH SCHOOL REVISED EDITION, (C&E
PUBLISHING, INC., 2022)
Categories of
Finance
Public Finance
concerned with the government
revenues, and spending and
their general effect on the
economy,
Private Finance
Covers application of finance
other than public finance
Divided as follows:
Personal Finance
Non profit Organization
Business Finance
Deals primarily with the management of the finances of
individuals and households.
Non-Profit Organizations (NPOs)
can be grouped:
Arts, Culture, and Humanities
Education
Environment and animals
Health
human services
international and foreign
affairs
public and societal benefit
religion-related
mutual/membership benefit
unknown, unclassified
Non-Profit Organizations (NPOs)
Non-Government
Organizations (NGOs)
without gaining profit
funded by donations
donations are tax deductible to
the donors
required to report financial and
operating statements to the
public and Security Exchange
Commission (SEC)
Business Finance
the management of funds and other
valuable assets to be used in the
conduct of business.
It is concerned with the:
Acquisition
Allocation, and
Accumulation of Funds
Difference
Accounting vs
Finance
Finance involves with:
Finance is a broad field that covers: using the accounting data and
Accounting information in running the business and
Economics ensuring the sufficiency of its funds for
Taxation, and future operation and in turn, the results
Business Law of financial decision make up the
accounting data
Difference
Accounting vs
Finance
Accounting is subset of finance.
Deals with:
Assets Involves with:
Liabilities recording past transactions
Income, and analyzing past performances, and
Expense preparing and interpreting the financial
statements of the business for the
previous year
Reasons for
Come up with financial plan as
to how their funds can be
acquired, managed, and
Studying allocated
Finance
Become better investors; and
Make informed financial and
Equipped with sufficient essential
economic decisions
knowledge of finance, economics,
and management.
People have unlimited
wants but have limited
resources. Wants may
include:
Dreams
Desires
Demands
People may choose what
to do with their money
Spend
immediate utilities but lost opportunity for
the money to earn more
Save, or Invest
Amount will likely increase; but they will
have to delay satisfying their wants
Generally
accepted goal
of the firm
To maximize the wealth of
its common stockholders
through the value of its
common stock
