In: Finance
List five goals of a firm and Select which goals you will set for your organization as a manager and give the reason why you have selected those goals. (260 words
Use this textbook as a guide -Principles of Managerial Finance (14th ed.) by Gitman, Lawrence & Zutter, Chand
Maximize Profit; Some people believe that the firm’s objective is always to maximize profit. To achieve this goal, the financial manager would take only those actions that were expected to make a major contribution to the firm’s overall profits.
EPS: Corporations commonly measure profits in terms of earnings per share (EPS), which represent the amount earned during the period on behalf of each outstanding share of common stock.
Maximize Shareholder Wealth: The wealth of corporate owners is measured by the share price of the stock, which in turn is based on the timing of returns (cash flows), their magnitude, and their risk.
Economic value added (EVA) is a popular measure used by many firms to determine whether an investment—proposed or existing—contributes positively to the owners’ wealth.
Cash Flows: Profits do not necessarily result in cash flows available to the stockholders. Owners receive cash flow in the form of either cash dividends paid them or the proceeds from selling their shares for a higher price than initially paid.