People in business do need to make a profit, or their business will fail, but profit is not everything. Profit made by illegal means can result in going to jail, for example. Profit made by socially destructive means (even if they are legal) harms the society in which you live. Short term profit is not always compatible with long term profit. So, there is a bigger picture.
Financial public relations companies specialize in messaging for financial institutions or, more broadly, for-profit corporations. The objective generally is to promote the brand(s) and increase their positive public image.
7hjun,m ;mkimlol,,,,,,,,,,,,,,,,,,,,,,,,,,ui ljmn
As with all commercial enterprises, no matter what they sell, the main object is to make a profit at the end of the financial year.
Profit Maximization is a short term objective as all it aims for is to generate a higher revenue for the period.This objective is generally followed if the firm is highly leveraged and a higher profit is required to service it. Wealth Maximization is followed as it looks to increasing the market value of the firms share capital and thus leads to an overall development of the firm and its capacity.
Every business including Not for profit need to make money to function. The financial income is always the first thing noted as without the income all other aspect will eventually cease.
1. Profit Maximisation is the main objective of a firm" Discuss this statement with the help of an example.
Both profit maximization and wealth maximization have the objective of increasing the net worth.
WHAT IS THE PROFIT MAXIMISATION?
A responsible financial manager sees the benefit in both approaches. They will try to balance both profit and value maximization for their stockholders.
The traditional objective of a firm is to maximize shareholder wealth. This is mostly done through profit maximisation. This objective is questionable now though as the pursuit of profit can come at the expense of natural resources, the environment, labour standards etc.
Profit maximization sales maximisation growth maximisation utility maximisation satisfying behavior long run survival welfare objectives
A Sales Maximisation objective aims at increasing the cash value turnover/Sales Income/Revenue. Costs and expenses are not taken into account. Profit maximisation seeks to increase the bottom-line profit, regardless of sales or other considerations. Profit = sales less costs. If sales reduce, but if costs reduce by a greater amount, profit will increase. If sales are less in such a scenario, the work required to achieve sales may be less, so more profit is being made with less effort, which would be a good indicator of the organisation's efficiency and ability to trade successfully despite business challenges. Profits can also be increased by maintaining at costs at their present level, and increasing the selling price. Assuming that the volume of sales does not decrease, bottom-line profits will increase. Sales maximisation can be an valid objective if the sole aim is to increase market share or other related reasons. However, Sales Maximisation accompanied by ever-decreasing profits cannot be sustained indefinitely.
the difference between Profit maximisation and share price maximisation
Because business take the long term aspects of the business and for that wealth maximization is more important than anything else.
Financial public relations companies specialize in messaging for financial institutions or, more broadly, for-profit corporations. The objective generally is to promote the brand(s) and increase their positive public image.
Generally speaking, the main objective of a firm is profit maximisation. This is not always the case, however, as some firms have different goals, including providing charitable services, satisficing, and providing a high quality good or service.Revenue (income) increases profit, while expenses decrease profit. Therefore, if a firm's revenue increases more than their expenses increase, they will generate a greater profit.
It is a true statement that the objective, or goal, of management is to maximize profits. Another term for profit would be financial gain.