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What are the difference between value maximation and profit maximation?
Value maximization and profit maximization are very much related, the main difference being- value maximization means increases in owners' wealth achieved by maximizing of the value of a firm's common stock. profit maximization is the process by which a firm determines the price and output level that returns the greatest profit. the other difference among the two could be sited as- value maximization is seen as long term objective of a firm, whereas profit maximization is generally a short term objective.
What are the advantages and disadvantages of profit maximization?
The advantages of profit maximization is that creates a cash flow and investors become interested in companies that are maximizing their profits. The main disadvantage of it is that there are risks for business owners involved.An advantage of profit maximization is that it could create a huge increase in cash flow as long as the market remains good. However, a disadvantage is that if the market collapses during a period of profit maximization the business could lose everything.
Profit maximization vsealth maximization in financial management of an organization?
Profit maximization is also about increasing the EPS (earning per share) of the shareholders and to maximise the net present worth. Main objective of co is profit maximization EPS: net profit/ no of shares outstanding. Wealth maximization is anything having value. Anything which can be expressed in money value or economic value which is considered as wealth. Baisc objective of a co is wealth maximization. How to increase the wealth: By producing a quality product at a competitive rate. By giving product at reasonable price. Good after sales service. this all things leads to increase in co's wealth.
Why is earning profit considered as only one of the objective of business?
Earning money is a businesses main objective because it has investors that expect a return on their money. When businesses don't make money they stop existing.
What are the main functions in a business?
to maximize profit.
What are the difference between value maximation and profit maximation?
Value maximization and profit maximization are very much related, the main difference being- value maximization means increases in owners' wealth achieved by maximizing of the value of a firm's common stock. profit maximization is the process by which a firm determines the price and output level that returns the greatest profit. the other difference among the two could be sited as- value maximization is seen as long term objective of a firm, whereas profit maximization is generally a short term objective.
The main aim of any business is to maximization profit it has nothing to social responsibilties do you agree with this statiment or not justify?
no
What are the criticism of profit maximization?
In profit maximization, the ultimate aim of the business is profit. When profit is the main target, focus on other factors like investment, expansion, usage of the product, creating goodwill, ethics, etc., are lost or given minimum priority.
What are the advantages and disadvantages of profit maximization?
The advantages of profit maximization is that creates a cash flow and investors become interested in companies that are maximizing their profits. The main disadvantage of it is that there are risks for business owners involved.An advantage of profit maximization is that it could create a huge increase in cash flow as long as the market remains good. However, a disadvantage is that if the market collapses during a period of profit maximization the business could lose everything.
Profit maximization vsealth maximization in financial management of an organization?
Profit maximization is also about increasing the EPS (earning per share) of the shareholders and to maximise the net present worth. Main objective of co is profit maximization EPS: net profit/ no of shares outstanding. Wealth maximization is anything having value. Anything which can be expressed in money value or economic value which is considered as wealth. Baisc objective of a co is wealth maximization. How to increase the wealth: By producing a quality product at a competitive rate. By giving product at reasonable price. Good after sales service. this all things leads to increase in co's wealth.
The main goal of the business?
The main and primary goal of the business no matter what kind of nature it has, is only profit maximization. There may also be some secondary purposes such as well being of people or offering services to the society but the primary focus is PROFIT. http://www.aidandtrade.com/
What are the main objective of joint Hindu family business?
The objectives of huf are the same as business objectives: 1. Profit maximization 2. Effective running of family business 3. Without sharing the family business to external parties and using the family business profit for the well being of the particular family 4. All the members got the opportunity to conduct the business activity 5. All decision are taken by the most senior male member, so speedy decision making is possible.
Profit maximization is the basic objective of firm?
A firm's main objective should be to make decisions that maximize the value of the company for its owners, and as the owners of a company are its shareholders, the main financial objective should be 'the maximization of shareholder wealth'. Since shareholders receive their wealth through dividends and capital gains, shareholder wealth will be maximized by maximizing the value of dividends and capital gains that shareholders receive over time. Problems with the 'maximization of profits' objective: Firstly, there are quantitative difficulties associated with profit. Maximization of profits as a financial objective requires the profit to be defined and measured accurately, and that all the factors contributing to it are known and can be taken into account. It is very doubtful that this requirement can be met on a regular basis. E.g- If 5 auditors go into the same company, it is very likely that each will come out with a completely different profit figure. A second problem concerns the timescale over which the profit should be maximized. Should profit be maximized in the short term or the long term?? Given that profit considers one year at a time, the focus is likely to be on short-term profit maximization at the expense of long-term investment, putting the long term survival of the company into doubt. There are many examples of companies going into liquidation shortly after declaring high profits. Check out - Polly Peck Plc's dramatic failure in 1990! (good example) The third problem is that profit does not take account of or make any allowance for risk! It would be inappropriate to concentrate efforts on maximizing accounting profit when this objective does not consider one of the key determinants of shareholder wealth. So the 'maximization of profit' is not a suitable core objective for a company. That is not to say that a company does not need to pay attention to its profit figures, since falling profits of profit warnings are taken by the financial markets as a sign of financial weakness. Instead these sort of profit targets/objectives should can serve a useful purpose in helping a company to achieve short-term or operational objectives within its overall strategic plan.
Why Profit Maximisation is the main objective of a firm Discuss this statement with the help of an example?
1. Profit Maximisation is the main objective of a firm" Discuss this statement with the help of an example.
Why is earning profit considered as only one of the objective of business?
Earning money is a businesses main objective because it has investors that expect a return on their money. When businesses don't make money they stop existing.
What are the main objectives of business activity in the private sector?
the main objective for a business is to achieve there goal
What are profit oriented businesses?
Profit oriented business is a business whose main objective is to achieve the greatest possible profit for the owners of a business. This is achieved in various ways: reducing production costs, moving factories to "cheap labor" countries (China, Thailand, Malaysia, Indonesia, Viet Nam), lowering wages and lengthening working time of employees.
