Table of Contents

Title Page.1
Financial Management.4 The Building Blocks of Financial Management5-6 Financial Market7 Purpose of a Financial Market..8 Types of Financial Market9-11

Table of Contents
Financial Intermediaries.12-18
Reference.19

Financial Management
Is a concerned with the acquisition, financing, an management of assets with some overall goal in mind

The Building Blocks of Financial Management

Accounting Records
Every organization must keep an accurate record of financial transaction that takes place to show how funds have been used.

Financial Planning
Linked to the organizations strategic and operational plans, the budget is the cornerstone of any financial management system.

The Building Blocks of Financial Management

Financial Monitoring
The organization has a set of budget and has kept and reconciled its accounting records in a clear and timely manner.

Internal Controls
A system of controls, checks and balances collectively referred to as internal controls.

Financial Market
All Institution and procedures for bringing buyers and sellers of financial instruments together.

Purpose of Financial Market

Allocate savings efficiently to ultimate users.
Efficiency entails bringing the ultimate investor in real assets and the ultimate saver together at the least possible cost and inconvenience. Real Assets for example are Houses, buildings, equipment, inventories, and durable goods

Types of Financial Market

Financial Market Money Market
Primary Markets
Secondary Markets

Capital Market
Primary Markets
Secondary Markets

Money and Capital Markets

Money Market
Concerned with buying and selling of short-term (less than one year original maturity) government and corporate debt securities.

Capital Market
deals with relatively longterm (more than one year original maturity) debt and equity instruments (e.g., bonds and stocks)

Includes government securities originally issued with maturities of more than one year but that now have a year or less until maturity.

Primary and Secondary Markets

Primary Market Secondary Market
A market where new securities are bought and sold for the first time (a new issues market) A market for existing (used) securities rather than new issues

FINANCIAL INTERMEDIARIES
Financial institutions that accept money from savers and use those funds to make loans and other financial investments in their own name. Process of savers depositing funds with financial intermediaries and letting the intermediaries do the lending to the ultimate investors.

FINANCIAL INTERMEDIARIES
Deposit Institutions - Primarily involved with individuals acquiring their savings and making home and consumer loans Ex.: Commercial banks, savings and loan associations, mutual savings banks, credit unions Insurance Companies - Property and Casualty companies insure against fires, thefts, car accidents, similar unpleasantness. because insurance companies pay taxes at full corporate income tax rate, they invest heavily in municipal bonds, which offer taxexempt interest income. To a lesser extent, they invest in corporate stocks and bonds.

FINANCIAL INTERMEDIARIES
Insurance Companies - Life insurance companies insure against loss of life. invest in long-term securities; income of institution is partially exempt from taxes owing to the buildup of reserves over time Others - Pension Funds and other retirement funds - invest in longer-term securities, corporate stocks and bonds; monies paid into a fund are not taxed, when benefits are taken out in the retirement, taxes are paid by the recipient.

FINANCIAL INTERMEDIARIES
Others - Mutual Investment Fund invest heavily in corporate stocks and bonds; individual obtains a diversified portfolio managed by professionals Others - Finance Companies make consumer instalment loans, personal loans, and secured loans to business enterprises; raise capital through stock issues as well as through borrowings .

FINANCIAL INTERMEDIARIES
Financial Brokers Investment Banker Financial institution that underwrites (purchases at a fixed price on a fixed date) new securities for resale. Buys stocks and bonds at wholesale and sells them at retail. Financial Brokers Mortgage Banker - A financial institution that originates (buys) mortgages primarily for resale.

FINANCIAL INTERMEDIARIES
Secondary Market Purchases and sales of existing financial assets occur in the secondary market Secondary Market Organized Exchange Provide a means by which buy and sell orders can be efficiently matched Ex. New York Stock Exchange, American Stock Exchange, Philippine Stock Exchange

FINANCIAL INTERMEDIARIES
Secondary Market Overthe Counter Market - Serves as part of the secondary market for stocks and bonds not listed on an exchange as well as for certain listed securities

Ex. NASDAQ, Brokers and dealers who stand ready to buy and sell securities at quoted prices

Reference
http://www.businessdictionary.com/definition/financial -system.html#ixzz2BvDRu9xU
www.adrasouthpacific.org Finance.mapsofworld.com/finance-market Fundamentals of financial management. Van horne, J. and Wachowicz, john m. 2010 13th ed.

Thank You!