0
Want this question answered?
Be notified when an answer is posted
Add your answer:
Earn +20 pts
What can limit the profits a company makes?
In a free market economy, there are no limits to a company's profitability. For the benefit of a company's employees, its shareholders, and for the payment of taxes to the government, the more a company profits, the more it helps the economy of a nation.
Can you name me an example of diversification?
In a business, diversification is a way for a company to reach more customers by adding more to what they do. Think about NIKE. They started out making running shoes and sold them to elite athletes. Now they sell clothing, sports equipment, even water bottles! So they expanded their client base by "diversifying" or "adding to" the stuff they sell. NOTE: Not all companies sell products. Some companies offer more services as a way of diversification.
Explain why the disclosure of related party transaction and relationship may be important?
To ensure that the management of company does not act in prejudiced manner to the shareholders of the company. It is more an ethical corporate governance principles.
Why do businesses want to grow?
Because their owners (shareholders) want to get a return (an increase) on the value of their investment each year. This means the company needs to generate more profit each year. The shareholders will usually elect a board of directors who are most likely to achieve this growth in profit - at an acceptable level of risk. A company's shareholders could however decide they want a low growth/low risk strategy.
How managers can be motivated to act in the shareholders' interest?
Profit sharing, the more money the manager makes, the more the shareholders make.
What are the benefits of profit maximization?
The people who become stakeholders of organizations intend to make a profit by doing so. The more profit a company is making, the more money there will be to allocate among each of the stakeholders. Thus, the more a company maximizes profits the more the stakeholders benefit.
What is the difference between merger amalgamation?
"Very often, the two expressions "merger" and "amalgamation" are taken as synonymous. But there is, in fact, a difference. Merger is restricted to a case where the assets and liabilities of the companies get vested in another company, the company which is merged losing its identity and its shareholders becoming shareholders of the other company. On the other hand, amalgamation is an arrangement, whereby the assets and liabilities of two or more companies become vested in another company (which may or may not be one of the original companies) and which would have as its shareholders substantially, all the shareholders of the amalgamating companies." I found it while surfing for the same... Hope it answers.
What can limit the profits a company makes?
In a free market economy, there are no limits to a company's profitability. For the benefit of a company's employees, its shareholders, and for the payment of taxes to the government, the more a company profits, the more it helps the economy of a nation.
Importance of profit maximization for a public limited company?
Profit maximisation let the run business perfectly and better uses of resources or to pay dividend to the shareholders however also to expand their business to attract more new shareholders or give shareholder to reinvest in their company.
How is ownership measured in a company?
Officially ownership is represented by who holds the equity of a company. Corporations have shareholders and they are the owners. Whomever holds more shares owns a greater portion of the company.
What are the characteristics of public limited company?
A public limited company can have an unlimited number of shareholders, limited liability for its shareholders, greater access to capital through the sale of shares on the stock exchange, and can raise funds from the public. They are required to publish their financial statements and comply with regulatory requirements.
What are limitations of public limited company?
There are so many characteristics of a public limited company. It has limited liability on its shareholders, the stakeholders are directly involved in the running and management of such a company and much more.
Can you name me an example of diversification?
In a business, diversification is a way for a company to reach more customers by adding more to what they do. Think about NIKE. They started out making running shoes and sold them to elite athletes. Now they sell clothing, sports equipment, even water bottles! So they expanded their client base by "diversifying" or "adding to" the stuff they sell. NOTE: Not all companies sell products. Some companies offer more services as a way of diversification.
What role does the marketing function play in creating value for customers and shareholders?
Marketing gets the products information to the consumer. The better the marketing, the more people want the product. It benefits the shareholders who sell the product by attracting more consumers to buy it which puts more money into the company's hands. The only benefit to consumers is that they will see the marketing (tv, radio, billboards, internet, etc....) The downside to the customers is that they may have been talked into buying something that they didn't need.
Does owners of a company prevent effective management?
Owners of a company or shareholders prevent effective management because they really dictate for the dirctors in the company and mostly demand for more income no matter the situation.
What is concentric diversification?
concentric diversification Type of diversification where a firm acquires or develops new products or services (closely related to its core business or technology) to enter one or more new markets.
Why do shareholders or owners need accounting information?
Share holders and owners need the financial information to see that how company performing and if there is any improvement required it should be done while shareholders needs to see that how company performing whether they should invest more or take out investment already made.
