Introduction : the finance function An organization, whether political, civic, or bsiness in nature must be aware of its immediate and

future requirements for funds, the possible sources thereof and the benefits that may accrue to the organization itself and to the community arising from efficient and effective utilization of such funds. PRIMARY GOALS: Going into business means investing in activities that can make available goods and services needed in a community, realize profit from investment, increase the values of bus. Itself as an economic entity, and improve the quality of life in community. In other words, we fill an economic need, gain therefrom and at the same time, contribute to the economic and social well-being of people in locality. The primary goals of a business concern must be therefore be as follows: To earn profit To increase its own value as an economic entity To improve quality of life in community

TO EARN PROFIT Funds are invested in a bus to earn sufficient to return on investment.

EARNING PER SHARE ( EPS) . This refers to how much net income is earned for every share of capital stock outstanding. EPS = NET INCOME RELATED TO COMMON STOCK/ WEIGHTED AVERAGE NO. OF SHARES OUTSTANDING OF COMMON STOCK INCREASING THE VALUE OF A BUSINESS Growth and stability are the primary bases in measuring the value of a business entity. Growth may be measured in terms of increase in assets that appreciate in value, improved production capacity accompanied by increase in salesvolume and increase in owners equity. Stability of a company refers to its ability to weather the ups and downs in the economy or its ability to continue operations despite anticipated risks in a business.

SOCIAL RESPONSIBILITY OF BUSINESSMEN Refers to his contribution to the improvement of quality of life in community. How the business is able to improve the economy and its environment He adheres to legal and moral standards by adopting company objectives, policies and practices consistent therewith. MULTIPLIER EFFECT OF BUSINESS IN A COMMUNITY Chain effects of bus activities.

BUSINESS FINANCE The ff. are the functions of bus finance: Allocation of financial resources Procurement of funds Efficient and effective utilization of financial resources

ALLOCATION OF FINANCIAL RESOURCES The objective is to be assured that funds are channeled to activities that are considered profitable or will increase the value of bus itself and the company costs and risks are minimized. Some question asked in evaluating project proposals: Is that project necessary? What is its social relevance? How will the proposal affect our current operations? PROCUREMENT OF FUNDS Requires awareness of diff sources of funds and the cost involved. EFFICIENT AND EFFECTIVE UTILIZATION OF FINANCIAL RESOURCES Efficient utilization of financial resources refers to their economical use. We see to it that fin res arectually being used for what they have been intended. Inefficiency in the use of fin res may be caused by unnecessary expenditures or tardiness of personnel. Effective utilization of financial resources refers to their use towards the attainment of predetermined goals/ objectives. Financial res must be utilized in a manner that minimizes company costs arising from wastages and lost opportunities due to delays in operations and idle or nonproductive res. INVESTMENT PORTFOLIO Portfolio refers to a brief case that is normally being used in carrying business papers and documents. Because of this, the term came to be used as referring to the aggregate of assets held as investments by an organization or individual. A bus org may maintain investment in stocks, bonds, money market placements, real estate bec of their periodic earnings or their increase in appreciation in value.