FINANCIAL CAPITAL:

RETURN TO CAPITAL
& FINANCIAL ACCESS

Alona R. Raymundo
Student
MPMG
 FINANCIAL CAPITAL
• Assets needed by a company to provide goods or services,
as measure in terms of money value (Investopedia)

• money used to help pay for the acquisition of plants,

equipment, and other items needed to build products or
offer services. Financial capital is also referred to as
investment capital (higher rock education)
 FINANCIAL CAPITAL
• any economic resource measured in terms of money used
by entrepreneurs and businesses to buy what they need to
make their products or to provide their services to the
sector of the economy (Wikipedia)

• legal ownership of all physical capital, as well as the

monetary value of any asset that could be liquidated for cash
SOURCES OF FINANCIAL CAPITAL

• Debt finance - money provided by an external

lender, such as a bank, building society or credit union.
- Financial institutions, Retailers, Suppliers,
Finance companies, Family or friends
SOURCES OF FINANCIAL CAPITAL

• Equity finance - money sourced internally by the

business.
- Self funding, Family or friends, Private investors,
Venture capitalists , Stock market, Government,
Crowd funding
 RETURN ON CAPITAL

• The return is the total gain or loss experienced on an

investment over a given period of time. It is commonly
measured as cash distribution during the period plus
the change in value, expressed as percentage of the
beginning-of-period investment value.
 RETURN ON CAPITAL
• Return on capital is a profitability ratio. It measures the
return that an investment generates for capital contributors,
i.e. bondholders and stockholders.

• The general equation for return on capital is: (Net income -

Dividends) / (Debt + Equity)

• Return on capital is also known as "return on invested capital

(ROIC)" or "return on total capital."
 FINANCIAL ACCESS
• Organizational: Increasing the productivity of existing savings
and financial flows by helping to develop effective financial
services to the poor.
• Institutional: Increasing access to financial services (including
overcoming barriers associated with lack of collateral among the
poor
• Regulatory: Reforming the environment in which financial
services operate and helping governments provide better safety
nets for the poor (including pensions).
 FINANCIAL ACCESS
• Access to credit, with reasonable terms and interest rates,
is a critical piece in the business development.

• For bigger, established businesses, banks often compete to

offer them loans.

• For Micro, Small and Medium enterprises (MSMEs), access

to funds remains a challenge

• Credit Surety Fund (CSF) Cooperative Act

 REFERENCES
Poverty in the Philippines: Income, Assets, and Access accessed on April 15, 2018 @
https://books.google.com.ph/books?id=iVIW-
Qh50HoC&pg=PA56&lpg=PA56&dq=financial+capital+access+philippines&source=bl&ots=ayel1H9azu&sig=ttB9PRktIV
ydzMcqfsGDCTD85uo&hl=en&sa=X&ved=0ahUKEwj217qukNXaAhWMopQKHWWpD-
g4ChDoAQhAMAQ#v=onepage&q=financial%20capital%20access%20philippines&f=false
Sources of finance: Debt vs Equity Finance accessed on April 15, 2018 @ https://www.business.gov.au/info/run/finance-
and-accounting/finance/sources-of-finance-debt-vs-equity-finance
Financial Dictionary accessed on April 15, 2018 @ http://www.investinganswers.com/financial-dictionary/ratio-
analysis/return-capital-3054
Voices: Perspective on Development accessed on April 16, 2018 @ https://blogs.worldbank.org/voices/five-challenges-
prevent-financial-access-people-developing-countries
Aquino (2015).Because entrepreneurs need access to capital accessed on April 16 @
https://www.rappler.com/thought-leaders/112473-entrepreneurs-access-capital
Chapter 5 Risk and Return accessed on April 16, 2018 @
http://wps.aw.com/wps/media/objects/222/227412/ebook/ch05/chapter05.pdf