intoduction to business finance
TRANSCRIPT
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INTRODUCTION
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THE NATURE AND AIMS THE NATURE AND AIMS OF BUSINESSOF BUSINESS
The Philippine EconomyThe Philippine Economy
The Role of Business The Role of Business
Business DefinedBusiness Defined
Kinds of BusinessKinds of Business
Objectives of BusinessObjectives of Business
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The Philippine EconomyThe Philippine Economy
Low productivity in the Low productivity in the workplaceworkplace
Graft and corruption in the Graft and corruption in the governmentgovernment
The declining value of the The declining value of the pesopeso
Unfavorable balance of tradeUnfavorable balance of trade
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Business success Business success associated w/ Economic associated w/ Economic
GrowthGrowth Adequate capitalAdequate capital
- - prerequisite to the existence of prerequisite to the existence of
business firmsbusiness firms Availability of capitalAvailability of capital
- - ready to use; at handready to use; at hand Proper Management of capitalProper Management of capital
- - key ingredient in the survival and key ingredient in the survival and
growth of businessgrowth of business
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Business FailureBusiness Failure
Businessman’s lack of Businessman’s lack of sufficient skills in managing sufficient skills in managing financefinance
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The Role of BusinessThe Role of Business
Business firms and government Business firms and government are oriented towards the are oriented towards the provisions of goods and provisions of goods and services to the societyservices to the society
Ex.Ex.
- basic necessities- basic necessities
- services- services
- others- others
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Business DefinedBusiness Defined
Business is any lawful Business is any lawful economic activity concerned economic activity concerned with the production and/or with the production and/or distribution of goods and distribution of goods and services for profitservices for profit
An entity is still a business if An entity is still a business if its objective is to make its objective is to make profitsprofits
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Kinds of BusinessKinds of Business
Business may be classified in several Business may be classified in several ways. As to the nature of the principal ways. As to the nature of the principal activity performed, it consist of three activity performed, it consist of three main divisions:main divisions:CommerceCommerceIndustryIndustryServicesServices
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Business
Commerce Industry Services
Marketing
GeneticTrading
Buy and Sell
Merchandising
Extractive Recreation
Personal
Finance
Construction
Manufacturing
others
Kinds Of Business
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CommerceCommerce
Business firms which are engaged Business firms which are engaged in the buying and selling of goods in the buying and selling of goods and services are classified as and services are classified as those falling under commerce:those falling under commerce:
- trading- trading
-merchandising-merchandising
- marketing- marketing
Examples: Super Markets, Sari-Examples: Super Markets, Sari-Sari stores, Dry goods store, Sari stores, Dry goods store, ImportersImporters
KINDS OF BUSINESS
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Business
Commerce Industry Services
Marketing
GeneticTrading
Buy and Sell
Merchandising
Extractive Recreation
Personal
Finance
Construction
Manufacturing
others
Kinds Of Business
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IndustryIndustry
Industries are those mainly Industries are those mainly concerned with productionconcerned with production
Goods produced are those which Goods produced are those which may be intended for ultimate may be intended for ultimate consumption which are called consumption which are called Consumers goodsConsumers goods
And those which are intended for And those which are intended for use of business and industry and use of business and industry and which are called Producer’s which are called Producer’s GoodsGoods
KINDS OF BUSINESS
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Business
Commerce Industry Services
Marketing
GeneticTrading
Buy and Sell
Merchandising
Extractive Recreation
Personal
Finance
Construction
Manufacturing
others
Kinds Of Business
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Genetic IndustriesGenetic Industries
Business involved in Business involved in
- Agriculture,- Agriculture,
- Forestry, - Forestry,
- and Fish Culture- and Fish Culture
INDUSTRY
CLASSIFICATION
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Extractive IndustriesExtractive Industries
Businesses involved in the Businesses involved in the extraction of goods from extraction of goods from natural resources which natural resources which includeinclude
- Mining- Mining
- Lumbering- Lumbering
- Hunting- Hunting
- Fishing- Fishing
INDUSTRY
CLASSIFICATION
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IndustryIndustry
Can be classified into the Can be classified into the following:following:
- Genetic IndustriesGenetic Industries- Extractive IndustriesExtractive Industries- Manufacturing IndustriesManufacturing Industries- Construction IndusttriesConstruction Industtries
KINDS OF BUSINESS
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Manufacturing IndustriesManufacturing Industries
Are those which convert raw Are those which convert raw materials into finished products.materials into finished products.
Example:Example:
- Manufacture of drugs- Manufacture of drugs
- Plastics- Plastics
- Food- Food
- Liquor- Liquor
- Footwear- Footwear
- Motor Cars- Motor Cars
INDUSTRY
CLASSIFICATION
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Construction IndustriesConstruction Industries
Firms engaged in building Firms engaged in building infrastructures like:infrastructures like:
- Airports- Airports
- Seaports- Seaports
- Dams- Dams
- Highways- Highways
INDUSTRY
CLASSIFICATION
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ServicesServices
A service business is one A service business is one which sells services to buyerswhich sells services to buyers
Service Firms may be Service Firms may be classified:classified:
- Recreation- Recreation
- Personal- Personal
- Finance- Finance
KINDS OF BUSINESS
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RecreationRecreation
Examples:Examples:
- Movie houses- Movie houses
- Television- Television
- Radio stations- Radio stations
- Theaters for Drama and- Theaters for Drama and
stage presentationsstage presentations
SERVICE
CLASSIFICATION
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PersonalPersonal
Examples:Examples:
- Restaurants- Restaurants
- Barber shops- Barber shops
- Transportations- Transportations
- Hotels- Hotels
- Tailoring Shops- Tailoring Shops
- others- others
SERVICE
CLASSIFICATION
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ServicesServices
A service business is one A service business is one which sells services to buyerswhich sells services to buyers
Service Firms may be Service Firms may be classified:classified:
- Recreation- Recreation
- Personal- Personal
- Finance- Finance
KINDS OF BUSINESS
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Objectives of the BusinessObjectives of the Business
A business is established A business is established primarily for profitprimarily for profit
At times, short-term and long-At times, short-term and long-term profits are sacrificed in term profits are sacrificed in order to attain other goals such order to attain other goals such as:as:
- Political Influence- Political Influence
- Family control of the Business- Family control of the Business
- Community Involvement- Community Involvement
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ObjectivesObjectives
To survive and grow, business firms must attain To survive and grow, business firms must attain the following multiple objectives:the following multiple objectives:
1. The provision of products and services to 1. The provision of products and services to the the
communitycommunity
2. The satisfaction of personal objectives like:2. The satisfaction of personal objectives like:
- profits for owners- profits for owners
- adequate salaries and compensation- adequate salaries and compensation
- psychic income for all, including pride - psychic income for all, including pride
in work, security, recognition, and in work, security, recognition, and
acceptanceacceptance
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ObjectivesObjectives
To survive and grow, business firms must To survive and grow, business firms must attain the following multiple objectives:attain the following multiple objectives:
3. Protection and enhancement of the 3. Protection and enhancement of the human human
and physical resources of societyand physical resources of society
4. Economy and effectiveness of operation4. Economy and effectiveness of operation