BUSINESS FINANCE The Nature and Aims of Business By: Mrs. Belen Apostol.

BUSINESS FINANCEBUSINESS FINANCE

The Nature and Aims of BusinessThe Nature and

Aims of Business

By: Mrs. Belen ApostolBy: Mrs. Belen Apostol

• Business success has always been associated with economic growth. Adequate capital is a prerequisite to the existence of business firms.

• Business success is highly dependent on the available capital.

• Proper management is a key ingredient in the survival and growth of business.

• The major reason for business failure is the businessman’s lack of sufficient skills in managing finance.

The Philippine EconomyThe Philippine Economy

• The growth of economy lies in the ability of private individuals to achieve economic objectives

• The quest for profit is usually undertaken by engagement in business activities.

• Business firms and government are oriented towards the provision of goods and services in the society.

The Role of BusinessThe Role of Business

• The standard of living is raised or lowered depending to a large extent on the performance of business firms.

• Business is largely responsible for bringing into the market a wide array of products and services which were not previously available.

The Role of BusinessThe Role of Business

The Philippine EconomyThe Philippine Economy

Concerns affecting the Philippine Economic Development

•Low Productivity in the workplace•Graft and corruption in the government•The declining value of peso•Unfavorable balance of trade

• Business is any lawful economic activity concerned with the production and/ or distribution of goods or services for profit.

Business DefinedBusiness Defined

Business may be classified as to the nature of principal activity performed as follows:

1.Commerce

2.Industry

3.Services

Kinds of BusinessKinds of Business

are business firms engaged in buying and selling of goods and services.

CommerceCommerce

Are those which are mainly concerned with production.

Consumer’s goods – are goods produced intended for ultimate consumption

Producer’s goods – goods intended for business

IndustryIndustry

Industry may be classified as:

Genetic industries – business involved in agriculture, forestry, and fish culture.

Extractive industries – business involved in the extraction of goods from natural resources which include mining, lumbering, hunting and fishing.

IndustryIndustry

Manufacturing industries – are those which convert raw materials into finished products.

Construction industries – consist of firms engaged in building infrastructures like airports, seaports, dams and highways.

IndustryIndustry

A service business is one which sells services to buyers.

Service may be classified as:

1.Recreation – movie houses, television and radio stations, theaters

2.Personal – restaurants, barber shops, hotels

3.Finance – banks, insurance, credit union,

ServicesServices

OBJECTIVES OF BUSINESSOBJECTIVES OF BUSINESS

A business firm is established primarily for profit.

Short term and long term profits are sacrificed in order to attain goals such as:

1.Political influence

2.Family control of the business

3.Community involvement

OBJECTIVES OF BUSINESSOBJECTIVES OF BUSINESSTo survive and grow, business firms must attain

the following multiple objectives:

1.The provision of products and services to the community;

2.The satisfaction of personal objectives like:

a. Profits for owners

b. Adequate salaries and compensation for executives and employees

c. Psychic income for all, including pride in work, security, recognition, and acceptance

3. Protection and enhancement of the human and physical resources of society; and

4. Economy and effectiveness of operation

OBJECTIVES OF BUSINESSOBJECTIVES OF BUSINESS