Book 1.3-1.4.docx - 1.3 The Goal of Financial Management The goal of financial management is to make money or ass value for the owners Possible Goals

Book 1.3-1.4.docx - 1.3 The Goal of Financial Management...

This preview shows page 1 - 2 out of 3 pages.

1.3 The Goal of Financial Management The goal of financial management is to make money or ass value for the owners. Possible Goals Survive Avoid financial distress and bankruptcy Beat the competition Maximize sales or market share Minimize costs Maximize profits Maintain steady earnings growth Goals tend to fall into two classes: 1. Profitability: goals involving sales, market share, and cost control 2. Bankruptcy avoidance, stability, and safety The Goal of Financial Management The goal of financial management is to maximize current value per share of the existing stock. Corporate finance could have been defined as the study of the relationship between business decisions and the value of the stock in the business A More General Goal With for-profit businesses , the total value of the stock in a corporation is equal to the value of the owner’s equity. So, maximize the market value of the existing owner’s equity.
Image of page 1
Image of page 2

You've reached the end of your free preview.

Want to read all 3 pages?

  • Spring '14

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes
A+ icon
Ask Expert Tutors