Financial Management Goals

Financial Management Goals - Financial Management Goals...

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Financial Management Goals Financial Management Goals Ronda L. Brewer FIN/200 April 8, 2011 Brad Slentz
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Financial Management Goals Efficient Financial management requires the existence of some objectives, which are as follows 1) Profit Maximization: Objective of financial management is same as the objective of a company that is to earn profit. But profit maximization cannot be the sole objective of a company. It is a limited objective. If profits are given undue Importance then problems may arise as discussed below. The term profit is vague and it involves much more contradictions. Profit maximization has to be attempted with a realization of risks involved. A positive relationship exists between risk and profits. So both risk and profit objectives should be balanced. Profit Maximization does not take into account the time pattern of returns. Profit maximization fails to take into account the social considerations 2) Wealth Maximization: It is commonly agreed that the objective of a firm is to maximize value or wealth. Value of a firm is represented by the market price of the company's common stock. The market
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Financial Management Goals - Financial Management Goals...

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