MID-TERM

EXAMINATION
ED – 209 Financial Management
Submitted by:

Elaila Mae Z. Briones

Student Submitted to:

Dr. Elmer V. Tena

Professor
Name: Elaila Mae Z. Briones Permit No.: 0110
Course: MAED, Major in Admin. & Supervision Date: May 22, 2022
Professor: Dr. Elmer V. Tena

MID-TERM EXAMINATION
Second Semester 2021-2022
UNEP MAED, Iriga City
Educ. 209 Financial Management

Test I. Cite and give your insights on the following:

1. Vision, Mission, and Goals (VMG) of UNEP Graduate Studies.

Vision

A premier Graduate School known as knowledge center for sustainable resource

development.

Mission

UNEP Graduate School commits itself to produce globally competitive and value-

laden professionals in various graduate disciplines and to the advancement of

knowledge through relevant research and extension to enhance the capability of

stakeholders and sustainable development.

Goals

1. Quality and Excellence in providing graduate expertise with national and

international standards.

2. Relevance and responsive in generating and diffusing of knowledge in the

board range of discipline focused in the training of manpower by providing

professional and technical expertise relevant and responsive to the needs of

the society.

3. Access and Equity in providing opportunities to qualified and deserving

professionals.

4. Efficiency and Effectiveness of the Graduates School in minimizing expenses

with quality inputs and maximizing returns in terms of individual,

institutional, and social benefit derived from the Graduate Programs.

Insight:
 My insight gained in VMG of UNEP Graduate Studies was that they want

to produce globally competitive graduate professionals who can are with various

studies and who have advance knowledge in different relevant researches to

provide professional and technical expertise relevant and responsive to the needs

of the society. Of course, we study in order to cope-up or to deal with different

problems we are encountering not only in our country but with other countries as

well. These will help us and also the other stakeholders enhance our capabilities

for sustainable development.

2. The contributory consequence of VMG in your personal and professional

development.

For me, knowing this VMG of our school inspires and encourages me to

do so and prove to others that we can achieve those. With this, it will surely help

me in my studies to enhance my capability and be advance in relevant studies in

order to become a professional and technical expert someday and to help others in

solving different problems in our country and for sustainable development.

Test II. Provide your accurate comprehension on the statements below:

1. Elaborately analyze and compare the different types of financial decisions and

determine which among the three (3) will maximize the firm’s wealth.

The different types of financial decisions are:

 Investment Decisions are those which determine how scarce or limited resources

in terms of funds of the firms are committed to projects. It should also consider

the profitability of each individual project proposal that will contribute to the

overall profitability of firm and lead to the creation of wealth.

 Financing Decisions assert that the mix of debt and equity chosen to finance

investment should maximize the value of investment made. The finance decisions

should consider the cost of available in different forms and the risks attached to it.

If the cost of capital of each component is reduced, the overall weighted average
 cost of capital and minimization of risks in financing will lead to the profitability

of the organization and create wealth to the owner.

 While Dividend Decisions is concerned with the determination of quantum of

profits to be distributed to the owners, the frequency of such payments and the

amounts to be retained by the firm. The dividend distribution policies and

retention of profits will have ultimate effect on the firm's wealth. If the firm,

however, adopts a very conservative dividend payments policy, the firm’s share

prices in the market could be adversely affected. An optimal dividend distribution

policy therefore will lead to the maximization of shareholders’ wealth.

For me, these three decisions have the same basic objective, is to

maximize the firm’s wealth. If the firm enjoys the stability and growth, its share

prices in the market will improve and will lead to capital appreciation of

shareholders’ investment and ultimately maximize the shareholders’ wealth.

2. In Chapter 3, Fig 3-1 is presented that shows the financial manager’s role.

Describe each role of a finance manager that will lead in achieving the goals of

the firm.

The role of a finance manager that will lead in achieving the goals of the firm

are:

Financial Manager makes decisions involving

 Analysis and Planning - are one of the fundamental activities and responsibility

for the finance department. A financial manager has to estimate the financial

needs of a business. How much money will be required for acquiring various

assets? The amount will be needed for purchasing fixed assets and meeting

working capital needs. He has to plan the funds needed in the future. How these

funds will be acquired and applied is an important function of a finance manager.

Financial analysis and planning help an organization in achieving strategic tasks

and objective within available resources. The key responsibility of financial

analysis and planning team is facilitating management in formulating short and

 long-term objectives, carrying out cost-benefit analysis and ensuring targets are

met through periodic reviews. Another responsibility is to ensure that

management’s actions create profitability for organization by providing relevant

financial information. Financial analysis and planning are essential divided into

four parts forecasting, budgeting, reporting and analysis.

 Acquisition of Funds - After making financial planning, the next step will be to

acquire funds. There are a number of sources available for supplying funds.

These sources may be shares, debentures, financial institutions, commercial

banks, etc.

The selection of an appropriate source is a delicate task. The choice of a

wrong source for funds may create difficulties at a later stage. The pros and cons

of various sources should be analyzed before making a final decision.

 Utilization of Funds - One of the roles of financial manager includes effective

utilization of funds. He has to select an investment pattern is related to the use of

funds. The funds should be spent on fixed assets and then an appropriate portion

will be retained for working capital. Working capital management is a very

important day-to-day activity for a finance manager. It spreads over both the

broader functions, i.e., procurement and utilization of funds. It mainly involves

the management of current assets and current liabilities and keeps the gap

between the two managed as per the available funds with the organization. Cash

management is a big task in working capital management. The finance manager

must ensure that all the branches, units, etc. have sufficient cash to address the

necessary expenses. The smoother the management of cash, the smoother is the

flow of operations of the business.

 Financial managers have an extensive range of responsibilities, and what

financial managers do largely depend on the type of organization. In a small
business, a financial manager may be responsible for the entire financial
operation, while in a large corporation, a financial manager may be more likely
to specialize in a particular aspect of finance, such as financial reporting or cash
management.
 Common responsibilities of a financial manager include:

 Producing accurate financial reports and information

 Developing cash flow statements

 Projecting profit

 Managing credit

 Providing advice in making financial decisions

 Directing investments

 Making financial forecasts

 Budgeting

 Managing risk of financial loss

To carry out their responsibilities, financial managers need to maintain
knowledge of legal and regulatory requirements. Changes in laws, accounting
pronouncements and taxation can all have a significant effect on the financial
position of an organization and how it manages its finances. Therefore, financial
managers need to remain well informed about the regulatory environments for
their employers.

3. Discuss thoroughly the three (3) responsibilities of a finance manager to achieve

the financial objectives of a business entity.

Maximizing the value of the firm is the main goal of the financial manager. To

achieve this, one must instill the responsibilities to attain the financial objectives of

the business entity.

 Financial Planning - Financial managers generally oversee the financial

health to ensure its stability. Analyzing financial data prepared by

accountants, monitoring the firm’s financial status, and preparing and

implementing financial plans are needed in establishing the business stability.

The first responsibility of the financial manager is financial planning. It is

preparing the financial plan which projects revenues, expenditures, and

financing needs over a given period. This also refers to proper usage of the

profit generated by the firm. Profit arises due to many factors such as pricing,
 industry competition, state of the economy, mechanism of demand and

supply, cost and output. A healthy mix of variable and fixed factors of

production can lead to an increase in the profitability of the firm.

 Investing (spending money) - Investing the firm’s funds in projects and

securities that provide high returns in relation to their risks. The funds should

be allocated in such a manner that they are optimally used. In order to allocate

funds in the best possible manner, pointers must be considered such as the size

of the firm and its growth capability, the status of assets whether they are

long-term or short-term, and the mode by which the funds are raised

 Financing (raising money) - It is the obtaining the fund for the firm’s

operations and investments and seeking the best balance between the debt

(borrowed funds) and the equity (funds raised through the sale of ownership in

the business).

4. Discuss briefly and give your insights on the three (3) forms of a business

organization.

The three (3) forms of a business organization are:

 Sole Proprietorship

In a sole proprietorship, you’re the sole owner of the business. This type

of business is straight-forward and easy to launch and there may be fewer

administrative requirements compared to a partnership or corporation.

One of the most significant disadvantages of a sole proprietorship is

unlimited personal liability, meaning you are fully responsible for any and all

debts and obligations of the business. Creditors can make a claim against any

assets in your name—your home, vehicle, investments—and family members

could also be liable.

Keep in mind the weight of the company will rest on your shoulders alone,

and there could be a lack of continuity for your business if you’re unavailable.
 It’s also worth noting that it can be difficult to raise capital on your own (but

not impossible).

Insight:

A sole proprietorship is the simplest and most common structure chosen to

start a business. It is an unincorporated business owned and run by one

individual with no distinction between the business and the owner. You are

entitled to all profits and are responsible for all your business's debts, losses

and liabilities.

 Partnership

A partnership is a non-incorporated business created between two or more

people. It’s fairly easy and inexpensive to form this type of business and start-

up costs are usually split equally between partners. A legal agreement should

be drawn up to outline how profits will be shared.

Similarly, there’s no legal separation between you and your business.

Your personal liability is unlimited, but you’re also financially responsible for

any business decisions your partner makes—so if a contract is broken or debts

are incurred without your knowledge, you’re still on the hook financially.

While you’ll have a partner (or partners) to help you manage the business,

it can be challenging to find the right person or people to work with, and

conflicts could create problems for the business. But if the partnership is right,

your business could flourish!

Insight:

In partnership, it might take more work, and it might take longer, but

strong partnerships build the relationships, shared understanding, and

collective focus to make lasting progress on issues related to community and

economic development.

 Corporation

A corporation is a legal entity separate from its shareholders. Corporations

offer flexible structure and an ability to divide ownership with shares, but that
 makes them more complex, so it’s always a good idea to speak with a lawyer

before incorporating. This type of business may also more expensive to set up

than others.

Your business can be incorporated at the provincial/territorial or federal

level, but either way, corporations are closely regulated. You’ll need to keep

extensive records and file documentation annually with the government.

It’s worth noting that conflicts can occur between shareholders and

directors, which could impact the business and your involvement in it.

Insight:

A corporation is a legal entity that is separate and distinct from its owners.

Under the law, corporations possess many of the same rights and

responsibilities as individuals. They can enter contracts, loan and borrow

money, sue and be sued, hire employees, own assets, and pay taxes.

5. In your own analysis, which among the three (3) forms of business organizations

will sustain in this time of COVID 19/pandemic? Justify your answer with

supporting basis.

For me, among the three forms of business organizations in my own

analysis, I think sole proprietorship will sustain in this time of COVID

19/pandemic because it is the simplest and most common structure chosen to

start a business. It is an unincorporated business owned and run by one

individual with no distinction between the business and the owner. You are

entitled to all profits and are responsible for all your business's debts, losses

and liabilities. It has complete control and decision-making power over the

business.

Starting a business in the middle of a pandemic is not an easy task. The

recent restrictions can be a roadblock to your success. However, with the right

research and planning, any business can thrive even in the middle of a

pandemic. All you need is to adapt.

Here are some pandemic-proofs sole proprietorship business during

pandemic:

 Water-refilling station

Drinking water is one of the basic needs. All of us need safe drinking

water that can quench our thirst and refill our bodily fluids. However, not

all drinking water is made the same. Tap water isn’t 100% safe to drink

since it has lots of unfiltered chemicals and minerals. Meanwhile, bottled

waters are just too expensive for daily consumption.

 Rice business

Rice is a staple food in the Philippines. After all, we are an agricultural

country and everyone simply loves rice. Even in a pandemic, the demand

for rice is steady and growing. You have customers who will repeatedly

buy from your store and food establishments who order in bulk. You

won’t even need marketing to sell rice.

 E-commerce store

If you don’t want to have the costs of renting space, utilities, and other

fees in starting a brick-and-mortar shop, then an e-commerce store is for

you. An e-commerce store allows you to have a scalable business for your

products and easy interaction with customers.

 Delivery or “pasabuy” business

In a pandemic, delivery services are essential. Due to the threat of

COVID-19, people prefer someone to buy things for them outside and

deliver them to their homes. That’s why delivery and “pasabuy”

businesses thrived. If you have a car, you can start your delivery service

by offering unique products not being offered on Grab, Shopee, and

Lazada.

 Food business
 When in doubt, go for food. After all, there will always be a demand

for food. People are always in search of good food that will satisfy their

cravings.

MID-TERM EXAMINATION PERMIT

Second Semester 2021-2022
UNEP MAED, Iriga City
Educ. 209 Financial Management