What to do to maximise profits of the company, Financial Management

What to do to maximise profits of the company

If you want to maximise profits, there are only two methods to do it. Either you decrease your expenses (also known as costs) or you increase the sales (also known as revenues).Both of these aren't easy to achieve.  Sales can be increased by increasing the price of the products or byselling more products. Selling moreproducts is difficult due to the competition in the market and you can't increase the price of the products withoutadding more features or value to it (presuming a competitive market).  If you're a competitive company, decreasing expenses beyond a certain level is possible only byreducing investments in research, advertising and development, etc. which eventuallyleads to reduction in sales in the long term and threatens the survival of company. Profit maximisation goal supposes that many of the complexities of the real world don'texist and is, thus, not acceptable.

 

Posted Date: 9/4/2013 1:51:45 AM | Location : United States







Related Discussions:- What to do to maximise profits of the company, Assignment Help, Ask Question on What to do to maximise profits of the company, Get Answer, Expert's Help, What to do to maximise profits of the company Discussions

Write discussion on What to do to maximise profits of the company
Your posts are moderated
Related Questions
Explain how a firm determines the optimal level of current assets. The best possible level of working capital is determined by finding the amount that balances the need for liq

Q. Show Social and Regulatory Factors? Regulatory climate and legislation against the environmental degradation may impair the profitability of the industry. Price control, vol

International bonds are divided into two categories namely, foreign bonds and euro bonds. Foreign bonds are issued by a borrowing company in another

The total return in case of mortgage-backed and asset-backed securities depend on the projected principal repayment and the interest earned on r

What do you meant by market-based and bank-based financial systems? Market-based versus bank-based financial systems implications. The presence of market-based and bank-base

Application of Shareholder Value Maximization Framework   Factors affecting Shareholder's Value are: Capital Market Conditions Profitability à Includes factors li

Loans from the financial institutions: Financial institutions such as the commercial bank life insurance corporation, industries financial development corporation bank of the

What is the Objectives of Working Capital Management? Describe please.

#questiBabar Corporation''s present capital structure, which is also its target capital structure I, is 40% debt and 60% common equity. Next year''s net income is projected to be R

Suppose the bid-ask spot prices for one British pound are $1.50 and $1.60 respectively. 1. Compute the bid-ask prices for one US dollar in terms of British pound. 2. Suppose