Determine the objectives of the firm, Financial Management

Determine the Objectives of the Firm

Objectives of the Firm - Profit Maximisation and Wealth Maximisation

To put it simply, we may say that goal of any business is to maximise the returns to owners of the business. So the purpose of finance is to help the business in maximising returns. Though if you talk to the companies, you also hear about many other goals that they are following at the same time. These goals could comprise maximisation of market share,maximisation ofsales, maximisation of market price of the share (whether real or specifically pushed up to benefit the owners), maximisation ofthe growth rates of sales etc.  Individually speaking, managers would be more concerned with themoney that they are making from organisation and benefits that they are receivinginstead of care about what the owners are making!

 

Posted Date: 9/4/2013 1:49:00 AM | Location : United States







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