BUSINESS FINANCE The Nature and Aims of Business By: Mrs. Belen Apostol.
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Transcript of BUSINESS FINANCE The Nature and Aims of Business By: Mrs. Belen Apostol.
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BUSINESS FINANCEBUSINESS FINANCE
The Nature and Aims of BusinessThe Nature and
Aims of Business
By: Mrs. Belen ApostolBy: Mrs. Belen Apostol
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• 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
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• 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
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• 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
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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
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• Business is any lawful economic activity concerned with the production and/ or distribution of goods or services for profit.
Business DefinedBusiness Defined
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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
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are business firms engaged in buying and selling of goods and services.
CommerceCommerce
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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
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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
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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
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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
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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
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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
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3. Protection and enhancement of the human and physical resources of society; and
4. Economy and effectiveness of operation
OBJECTIVES OF BUSINESSOBJECTIVES OF BUSINESS
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