PREPARED BY: GROUP

1
MARYROSE M. ABAN
RAYVENE O. RAZ

LESSON 1 MONICA CABONEGRO

GEMELA MAE
GALLARON
FLORA MAE BAGA-AN
BANISSA VACUNAWA
 “Every Business has two objectives: One is to make money;
the other, more elusive is to make money consistently”.

- Dave Liniger
 FINANCIAL OBJECTIVES
-Are the goals or targets related to the financial performance of a
business.
There are 6 types of Financial Objectives:

• Revenue Objectives

- Targets for the strategy and performance of a

business that improve gross or net profit.

• Cost Objectives
- A function, organizational subdivision, contract,
grant, or other activity for which cost data are
needed and for which costs are incurred.
• Profit Objective
-is easy to measure and is
achieved when you have more
income than costs.

• Cash flow objectives

-Monitoring cash transactions and
minimizing operating costs while
meeting expenses.
• Investment Objectives
- A set of goals that determines
an investor’s financial portfolio.

• Capital Structure Objectives

- To make sure it has enough
capital to pursue its strategic
objectives and to weather any
potential cash flow shortfalls
along the way.
 LIQUIDITY

• In financial management refers to the ease and speed at which an

asset can be converted into cash without significantly affecting its
market value. It reflects a company’s ability to meet short-term
financial obligations. High liquidity implies having enough cash
or liquid assets readily available.
 EXAMPLES OF LIQUIDITY IN FINANCIAL
MANAGEMENT INCLUDE:
• Cash: Physical currency held by a company.

• Bank Deposits: Funds kept in savings or checking

accounts that can be quickly withdrawn.
Marketable Securities: Short-term investments like Treasury bills that can be easily
sold in the market.

• Inventory: Goods that can be sold for cash

within a short period.
Maintaining a balance between liquidity and profitability is crucial.
While high liquidity ensures solvency, excessive liquidity can lead
to missed investment opportunities. Conversely, low liquidity may
hinder the ability to meet obligations.
 PROFITABILITY

It refers to the ability of a business or organization to generate

positive financial returns from its operations. Its indicates how
effectively the company is utilizing its resources to generate
earnings and create value for its owners or shareholders.
 EXAMPLES OF PROFITABILITY IN FINANCIAL MANAGEMENT:

• Cost control: Efficiently managing costs through budgeting and expense tracking can
help a company maintain healthy profit margins.

• Optimized pricing: Setting the right prices for products or services based on market
demand and production costs can enhance profitability.

• Debt management: Balancing the use of debt to fund operations or growth can lead to
higher returns on equity and improved profitability.
OTHER FINANCIAL AND OPERATIONAL
OBJECTIVES

Financial Objectives
is a goal that a businesses set for success and
growth.
OPERATIONAL OBJECTIVES

Are short-term goals whose attainment brings an

organization closer to its long-term goals. They
specify a clear and measurable outcome of a
business operation or process to be achieved over a
given period.
TYPES OF OPERATIONAL OBJECTIVES

• Cost objectives – it is essential that the business make sure that

the operations are cost-effective
• Quality objectives – emphasize productivity and effectiveness of
the unit cost of each product, number of products to be produced
per time period.
• Speed objectives (or swiftness of response) – measure how fast a
company can deliver its products and generates sales quotes.
• Dependability objectives – measure how dependable the
company is when it comes to timely delivery of product
to customers in accordance with planned prices and costs.
• Flexibility objectives – operations that can configure the
product lines to deal with various requirements and to
also adjust these product lines quickly to new
requirements.
• Environmental objectives – the overall aims that your
business sets itself to improve environmental
FINANCIAL RECORDS

Financial records are documents that provide

evidence of or summarize business transactions.
A well-organized set of financial records is an
essential part of an accounting department. At the
most detailed level, financial records can include
invoices and receipts. At a more aggregated
level, financial records include subsidiary
ledgers, the general ledger, and the trial balance.
At the most aggregated level, they include the
income statement, balance sheet, and statement
of cash flows.
EXAMPLE OF FINANCIAL RECORDS
INCLUDE
• Balance Sheet - A balance sheet is a financial statement that provides a snapshot
of a company's financial position at a specific point in time, showing its assets,
liabilities, and shareholders' equity. It reflects the company's financial stability and
how its resources are funded.
• Income Statement - An income statement, also known as a profit and loss
statement, is a financial report that summarizes a company's revenues, expenses,
and net income (or loss) over a specific period. It provides insights into a
company's profitability and financial performance during that time frame.
• Cash Flow Statements- A cash flow statement is a financial
document that tracks the movement of cash in and out of a
business over a specified period. It provides a clear picture of how
cash is generated and used by a company for operating, investing,
and financing activities, helping assess its liquidity and ability to
meet financial obligations.

• Transaction Records - Transaction records are detailed and

chronological records of financial activities within a company.
These records document individual financial transactions,
including purchases, sales, expenses, and payments, helping track
and analyze the flow of money in the business.
• Monthly or Annual Reports - Monthly or annual reports in
financial management are comprehensive documents summarizing a
company's financial performance and activities over a specific period,
typically a month or a year. These reports provide stakeholders with
essential information about revenues, expenses, profits, and other key
financial metrics, aiding in decision-making and performance assessment.
RECORDS TO KEEP
1. Income and Expenses: Keep detailed records of all
sources of income and expenses. This includes sales
revenue, salaries, utility bills, rent payments, office
supplies, travel expenses, etc. Having a clear breakdown of
your income and expenses helps in budgeting and
identifying areas where you can cut costs.

2. Bank Statements: Regularly reconcile your bank

statements with your financial records. This ensures that all
transactions are accounted for and helps detect any
discrepancies or errors.
3. Invoices and Receipts: Keep copies of all
invoices issued and receipts for expenses
incurred. This documentation is crucial for
tracking outstanding payments, verifying
expenses during tax audits, and maintaining a
paper trail of financial transactions.

4. Tax Documents: Organize and store all tax-

related documents, such as W-2s, 1099s,
receipts for deductible expenses, and records
of charitable donations. These documents are
essential for accurately filing your taxes.
5. Asset and Liability Records: Maintain a list of your
assets (e.g., property, vehicles, investments) and
liabilities (e.g., loans, credit card debts). This helps
you gauge your net worth and make informed
decisions about managing your assets and paying off
debts.

6. Payroll Records: If you have employees, maintain

accurate payroll records, including salary information,
tax withholdings, benefits, and time-off accruals. This
is not only important for your employees but also for
tax reporting and compliance.
7. Financial Statements: Regularly prepare
and review financial statements, such as
balance sheets, income statements, and cash
flow statements. These statements provide a
comprehensive overview of your financial
position and performance.
 ACCOUNTING PROCESS
Accounting provides additional information to help
management run the company more efficiently in various
ways. financial accounting reports quantify and measure a
company's financial success and failure. business owners can
determine how much profit or loss their business has generated
over time.
DEFINITION & EXAMPLES FOR
BUSINESS
• Step 1 - Financial Transaction Occurs.
• Step 2 - Make a journal Entry for the Transaction.
• Step 3 - Post Entries To The General ledger.
• Step 4 - Unadjusted Trial Balance.
• Step5 - Review the Accuracy of the Worksheets.
• Step6 - Make Adjusting Entries.