Republic of the Philippines

COMMISSION ON HIGHER EDUCATION

SAMAR COLLEGES, INC.
Catbalogan City, Samar
Tel. Nos. (055) 251- 3021, 543-8381, Fax (055) 251-3021

COLLEGE OF GRADUATE STUDIES

SUBJECT : EM 207 – FINANCIAL PLANNING AND CONTROL

FORMAT OF LEARNING INSIGHTS
I. YOUR NAME : IAN FRANCIS G. OJEDA
II. REPORTER’S/DISCUSSANT’S NAME : CESAR P. LAURON
III YOUR RATING TO THE DISCUSSANT : 1.1
III. TITLE OF THE TOPIC PRESENTED : FUNCTIONS OF FINANCIAL MANAGEMENT

Financial Management Learning Insights

Financial management is a crucial aspect of business operations, encompassing activities such

as obtaining and utilizing funds effectively. It involves making key decisions in areas like
investment, financing, and asset management to ensure the organization’s financial health.
Investment decisions are vital as they determine how funds are allocated to different projects
or assets, impacting the company’s future growth and profitability. Financing decisions involve
choosing the right mix of debt and equity to fund operations, while asset management focuses
on optimizing the use of resources to maximize returns.

Effective financial planning for me is essential for organizations to achieve their goals and
sustain operations. It helps in determining the financial requirements of the business and
guides decision-making processes. Accomplishing necessary funds through various sources at
minimum costs is a critical function of financial management. Proper allocation and utilization
of funds lead to improved operational efficiency, reduced capital costs, and increased firm
value. Financial management plays a significant role in ensuring that resources are managed
efficiently to support the organization’s overall objectives.
Financial management also involves risk assessment and mitigation strategies to safeguard the
organization’s financial stability. Monitoring cash flow, budgeting, managing debts, and
investing wisely are key components of personal finance that individuals need to master for
long-term financial security. Understanding income sources, spending patterns, saving
strategies, investment options, and protection measures like insurance are essential for
individuals to navigate their financial journey successfully.
Fiscal policy and monetary policy are two important tools used by governments and central
banks to manage the economy. Fiscal policy deals with government spending and taxation,
while monetary policy involves controlling the money supply and interest rates.

In financial planning, understanding these policies is crucial as they directly impact the overall
economic environment in which businesses and individuals operate. For example, a
government that implements expansionary fiscal policy by increasing government spending and
cutting taxes can stimulate economic growth and boost consumer spending. On the other hand,
a government that uses contractionary fiscal policy by cutting spending and raising taxes can
slow down inflation and reduce the deficit.

Similarly, monetary policy plays a key role in financial planning by influencing borrowing costs
and overall economic activity. When central banks lower interest rates, it becomes cheaper for
businesses and individuals to borrow money, which can lead to increased investment and
consumer spending. Conversely, raising interest rates can slow down inflation and prevent the
economy from overheating.

Overall, financial planners need to pay attention to fiscal and monetary policies as they can
have a significant impact on investment decisions, budgeting strategies, and overall financial
goals. By staying informed about these policies and their potential implications, financial
planners can better navigate the economic landscape and make informed decisions for their
clients.

1. The financial system is a complex network of institutions, markets, and regulators that
facilitate the flow of money within an economy. It includes banks, investment firms, stock
exchanges, and government agencies that regulate financial activities.

2. The monetary system is the part of the financial system that deals with the creation,
circulation, and control of money. Central banks are typically responsible for overseeing the
monetary system and ensuring stability in the economy through measures such as setting
interest rates and controlling the money supply.

3. Money serves a variety of functions in an economy, including serving as a medium of

exchange, a unit of account, and a store of value. It allows individuals and businesses to easily
trade goods and services, compare prices, and save for the future.

4. Banks and other financial institutions play a crucial role in the financial system by providing a
range of services, such as accepting deposits, lending money, and facilitating investments. They
also help to allocate resources efficiently by connecting savers with borrowers and providing
liquidity to the financial markets.

Report D. ABANTAO
1. Finance is the management of money and assets, including investments, budgeting, banking,
and planning for the future. It involves understanding how money moves in the economy and
how individuals, businesses, and governments make decisions about how to use their
resources.

2. Studying finance is important for individuals to make informed decisions about their money,
investments, and financial planning. It can help individuals manage their finances more
effectively, understand the risks and rewards of different investment options, and make
educated decisions about their financial future.

3. The financial system is a complex network of institutions, markets, and instruments that
facilitate the flow of money and resources in the economy. It includes banks, financial markets,
insurance companies, and investment firms, among others. Understanding how the financial
system works can help individuals navigate the complexities of the economy and make better
financial decisions.

4. Types of financial institutions include banks, credit unions, insurance companies, and
investment firms. Banks provide a variety of financial services, such as savings accounts, loans,
and investment opportunities. Credit unions are member-owned financial institutions that offer
similar services to banks. Insurance companies provide protection against financial losses, such
as health or property insurance. Investment firms manage and invest money on behalf of
individuals or organizations.

5. Types of financial markets include stock markets, bond markets, and commodity markets.
Stock markets allow individuals and organizations to buy and sell shares of publicly-traded
companies, providing opportunities for investment and capital growth. Bond markets allow
governments and corporations to raise capital by issuing bonds, which are debt securities that
pay interest to investors. Commodity markets facilitate the trading of raw materials and
agricultural products, allowing individuals and organizations to hedge against price fluctuations
and invest in the commodities market. Understanding the different types of financial markets
can help individuals diversify their investments and manage risk in their portfolios.

Reporter RELICANO

One personal insight about different forms of organization is that each one has its own set of
advantages and challenges.

Proprietorship allows for complete control and decision-making power, but also means a single
individual bears all the risks and responsibilities.

Partnership allows for shared decision-making and workloads, but also requires strong
communication and trust between partners to avoid conflicts.
Corporations provide limited liability for owners, but also involve complex governance
structures and potential for disconnect between shareholders and management.

Hybrid types of organizations combine elements of different forms, offering flexibility and
customization but possibly leading to confusion and inconsistency in decision-making.

Overall, the choice of organizational form should be carefully considered based on the specific
needs and goals of the business, as each has its own unique implications for success and
sustainability.

Reporter PARACALE
1. Balance Sheet:
The balance sheet is a crucial element of financial statements as it provides a snapshot of a
company's financial position at a specific point in time. It consists of assets, liabilities, and
shareholders' equity, and helps investors and stakeholders understand the financial health and
stability of a company. The two forms of balance sheet include the report format and account
format.

2. Statement of Retained Earnings:

The statement of retained earnings shows the changes in a company's retained earnings over a
specific period. It outlines the net income or loss generated by the company, dividends paid to
shareholders, and any other adjustments made to retained earnings. This statement helps
investors track how profits are reinvested or distributed.

3. Statement of Changes in Equity:

The statement of changes in equity reflects the changes in shareholders' equity during a
particular period. It includes information about share capital, retained earnings, additional paid-
in capital, and any other changes to equity. This statement provides insights into how a
company's equity is affected by various transactions.

4. Income Statements:
Income statements showcase a company's financial performance over a specific period by
detailing revenues, expenses, and net income or loss. It helps evaluate how efficiently a
company is generating profits and managing expenses. The two forms of income statements
are the single-step and multi-step income statements.

5. Statement of Comprehensive Income:

The statement of comprehensive income expands on the traditional income statement by
including items that are not part of net income, such as unrealized gains or losses on
investments, foreign currency translation adjustments, and changes in pension obligations. It
provides a more comprehensive view of a company's financial performance.
6. Statement of Cash Flow:
The statement of cash flow shows how a company generates and uses cash over a specified
period. It consists of three sections: operating activities, investing activities, and financing
activities. This statement is essential for assessing a company's liquidity, solvency, and overall
financial health.