Explain profit maximization approach, Financial Management

Assignment Help:

Q. Explain Profit Maximization Approach?

(i) Best Criterion on Decision-Making:- The goal of revenue maximization is regarded as the best criterion of decision-making as it offers a yardstick to judge the economic performance of the enterprises.

(ii) Proficient Allocation of Resources: - It leads to proficient allocation of scare resources as they tend to be diverted to those uses which in terms of profitability are the most desirable.

(iii) Optimum Utilization: - Optimum consumption of available resources is possible.

(iv) Utmost Social Welfare: - It make sure maximum social welfare in the form of timely payment to creditors, maximum dividend to shareholder, higher wages, better quality and lower prices, more employment opportunities to the society and maximization of capital to the owners.


Related Discussions:- Explain profit maximization approach

FDD , fimnancial accounting system

fimnancial accounting system

What are the weaknesses of the traditional approach, What are the Weaknesse...

What are the Weaknesses of the traditional approach The traditional approach to the scope of finance function evolved during 1920s and 1930s and dominated academic during 40's

Describe personal financial management., Gary and Joyce Yau, both 30, last ...

Gary and Joyce Yau, both 30, last month bought their dream house in London, Ontario. The purchase price was $450,000 plus addition fees such as taxes, legal fees, administration fe

Harmonisation of accounting standards, Harmonisation of Accounting Standard...

Harmonisation of Accounting Standards Recognising the required for international harmonisation of accounting standards, in year 1973, the International Accounting Standards Co

Embedded options, Embedded Options  is a provision in the ind...

Embedded Options  is a provision in the indenture that gives the issuer and/or the bondholder an option to take action against the other party.

Benefits of niche and specialisation markets, a) Ltd. stands for ‘private l...

a) Ltd. stands for ‘private limited company', i.e. a business with limited liability with shares being issued only to friends and family with the approval of the board of directors

Matching or accrual, Matching or Accrual   The accrual concept makes...

Matching or Accrual   The accrual concept makes a distinction among the receipt of cash and the right to receive it, and the payment of cash and legal obligation to pay it.

Automatic reinvestment plan, Automatic Reinvestment Plan Like in the US...

Automatic Reinvestment Plan Like in the US, UTI India has also started this plan where the amount of dividend and other income accrued on mutual fund investments is automatical

Which method should we use to valuate young companies, Which method should ...

Which method should we use to valuate young companies with high growth but uncertain futures? Two examples were Boston Chicken and Telepizza when they began. The great majo

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd