Unformatted text preview: and financing decisions that determine the composition of fixed assets and the sources of funds, respectively. Thus, it’s necessary to make sound investment choices which balance the risk against the expected benefits for the firm and for shareholders. It is important to note that profit maximization may focus on short-term profitability, a goal which sometimes can conflict with the creation of long-term wealth. Sound financial management avoids short-run decisions that can reduce a firm’s potential for long-term growth; this emphasis on wealth creation ensures long-term financial success for a company and its shareholders. Source: Pandey, I.M. Financial Management. 9th Edition , Vikas Publishing House, 2008...
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This note was uploaded on 05/07/2010 for the course ACCOUNTING ACC225 taught by Professor Professor during the Spring '10 term at University of Phoenix.
- Spring '10