Differentiate T-WPS Office

Differentiate the Financial instruments, Examples: Notes Payable, Loans Payable, Bonds
Financial institutions and Financial markets Payable
1. Financial institutions - companies in the c.Equity Instrument - any contract that

financial sector that provide a broad range of evidences a residual interest
business
Examples: Ordinary Share Capital, Preference
a. Commercial Banks- Individuals deposit funds Share Capital Identify common examples of
at commercial banks, commercial loans to firms Debt and Equity Instruments.
and personal Loans to individuals
d. Debt Instruments - generally have fixed
b. Insurance Companies - Individuals purchase returns due to fixed interest rates.
insurance (life, property and casualty, and
health) Examples of debt instruments are as follows:
c. Mutual Funds - Mutual funds owned by - Treasury Bonds and Treasury Bills - issued by
investment companies that enable small the Philippine government. These bonds and
investors bills have usually low interest rates and have
very Low risk .
d. Pension Funds - Financial institutions that
receive payments from employees and invest -Corporate Bonds - issued by publicly listed
the proceeds on their behalf companies. These bonds usually have higher
interest rates than Treasury bonds.
2. Financial Instruments - is a real or a virtual
document representing a legal agreement e. Equity Instruments - generally have varied
involving some sort of monetary value. returns based on the performance of the
issuing company.
a. A Financial Asset is any asset that is:
The following are types of equity instruments:
-Cash
-Preferred Stock - has priority over a common
-An equity instrument of another entity stock in terms of claims over the assets of a
company.
-A contractual right to receive cash or another
financial asset from another entity. - Holders of Common Stock - are the real
owners of the company.
-contractual right- exchange instruments with
another entity 3. Financial Market - refers to a marketplace,
where creation and trading of Financial assets
Examples: Notes Receivable, Loans Receivable,
Investment in Stocks, Investment in Bonds
b.Financial Liability - is any liability that is a

contractual obligation
Classify Financial Markets into comparative groups: -Primary vs. Secondary Markets - To raise money,
users of funds will go to a primary market to issue
new securities (either debt or equity) through a Health care financial managers - issues and
public offering or a private placement. healthcare finance
- The sale of new securities to the public referred to Financial managers - special tax law and regulations
as a public offering and the first offering of stock
named an initial public offering. Capital investment decisions - long term corporate
finance , fixed asset and capital structure
-However, suppliers of funds or the holders of the
securities may decide to sell the securities that have Decision - inter related criteria
purchased. -The Philippine Stock Exchange (PSE) is
both a primary and secondary Market Corporate management - maximize the value of the
firm by investing in project
Money Markets vs. Capital Markets Money markets
are a venue wherein securities with short-term Management - allocate limited resources
maturities (1 year or less) are sold. The key capital competing opportunities (capital budgeting)
market securities are bonds (long-term debt) and
Investment decisions - estimating the value of each
both common stock and preferred stock (equity, or
project based on size timing and cash flow
ownership).
predictability
The role of Financial Managers: make financing
TYPES OF FINANCIAL MANAGERS
decisions that require funding from investors in the
Financial markets. 1.Controllers - financial report, special reports by
governmental agencies
Source of funds - depositor who save money
2.Treasurer and finance officer - manage budgets,
Lending - lend these funds to borrower
investment of funds, capital rising
Investment - the borrowed funds in project
3.Credit managers - oversee credit operation
Interest - pay interest, as a return on the borrower
4.Cash managers - monitor and control cash flow
funds
5.Risk managers - manage financial risk
Depositor's return - pays interest to the deposit
6.Insurance managers - limit company losses,
THE ROLES OF FINANCIAL MANAGERS
insurance coverage
Financial managers- perform data analysis and
IMPORTANT SKILLS OF FINANCIAL MANAGERS
advise senior manager
1.Analytical skills - decision making and assessing
The role of financial managers - changing in
response to technological advances 2.Communication - complex financial transaction
Financial managers - monitoring a company's 3.Attention to detail - preparing and analyzing
finance financial report
Financial statements - task specific 4.Math skills - algebra, complex financial
documents
Government financial managers - government
appropriation and budgeting processes 5.Organizational skills - stay organized

Differentiate T-WPS Office

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Differentiate the Financial instruments, Examples: Notes Payable, Loans Payable, Bonds

Financial institutions and Financial markets Payable

1. Financial institutions - companies in the c.Equity Instrument - any contract that

b.Financial Liability - is any liability that is a

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