Goals of Financial Management Essay Example for Free

Goals of Financial Management Essay Money required for carrying out business activities is called business finance. Almost all business activities require some finance. Finance is needed : †¢To establish a business , †¢To run it †¢To modernize it †¢To expand it or diversify †¢It is required to buy whole variety of assets, they may be tangible like machinery ,factories,building,offices or intangible like patents, technical expertise etc. Success of business depends considerably on how well the funds are deployed in assets Financial management is concerned with optimum procurement as well as usage of finance. The financial management has to take three important decision viz. (i) Investment decision i. e. , where to invest fund and in what amount, (ii) Financing decision i. e. , from where to raise funds and in what amount, and (iii) Dividend i. e. , how much to pay dividend and how much to retain for future expansion. In order to make these decisions the management must have a clear understanding of the objective sought to be achieved. It is generally agreed that the financial objective of the firm should be maximization of owners economic welfare. There are two widely discussed approaches or criterion of maximizing owners welfare – (i) Profit maximization, and (ii) Wealth maximization. Profit maximization would probably be the most commonly cited business goal, but this is not a very precise objective. Do we mean profits this year? If so, then actions such as deferring maintenance, letting inventories run down, and other short-run, cost-cutting measures will tend to increase profits now, but these activities arent necessarily desirable. The goal of maximizing profits may refer to some sort of â€Å"long-run† or â€Å"average† profits, but its unclear exactly what this means. First, do we mean something like accounting net income or earnings per share? As we will see, these numbers may have little to do with what is good or bad for the firm. Second, what do we mean by the long run? As a famous economist once remarked, in the long run, were all dead! More to the point, this goal doesnt tell us the appropriate trade-off between current and future profits. Profit Maximization: Maximization of profits is very often considered as the main objective of a business enterprise. The shareholders, the owners of the business, invest their funds in the business with the hope of getting higher dividend on their investment. Moreover, the profitability of the business is an indicator of the sound health of the organization, because, it safeguards the economic interests of various social groups which are directly or indirectly connected with the company e. g. shareholders, creditors and employees. All these parties must get reasonable return for their contributions and it is possible only when company earns higher profits or sufficient profits to discharge the obligations to them. As long as we are dealing with for-profit businesses, only a slight modification is needed. The total value of the stock in a corporation is simply equal to the value of the owners equity. Therefore, a more general way of stating our goal . Finally, our goal does not imply that the financial manager should take illegal or unethical actions in the hope of increasing the value of the equity in the firm. What we mean is that the financial manager best serves the owners of the business by identifying goods and services that add value to the firm because they are desired and valued in the free marketplace If we assume that stockholders buy stock because they seek to gain financially, then the answer is obvious: Good decisions increase the value of the stock, and poor decisions decrease the value of the stock. The goal of maximizing the value of the stock avoids the problems associated with the different goals we listed earlier. There is no ambiguity in the criterion, and there is no short-run versus long-run issue. We explicitly mean that our goal is to maximize the current stock value. Because the goal of financial management is to maximize the value of the stock, we need to learn how to identify those investments and financing arrangements that favorably impact the value of the stock. This is precisely what we will be studying. In fact, we could have defined corporate finance as the study of the relationship between business decisions and the value of the stock in the business. Wealth Maximization: The term wealth means shareholder’s wealth or the wealth of persons who are involved in business concern. this is also known as value maximization or net worth maximization The wealth maximization (also known as value maximization or Net Present Worth Maximization) is also universally accepted criterion for financial decision making. The value of an asset should be viewed in terms of benefits it can produce over the cost of capital investment. †¢Wealth maximization is based on the concept of cash flow . cash flow are a reality and not based on subjective. †¢It considers time value of money.

Indias Economic Success :: essays research papers

India's Economic Success In every region of the world there are culture and social differences that set countries apart. Each with an economic, social and political outlooks on the future that determine the way people live. These endless arrays, even occur in different parts of a particular of every country including one of the worlds most diverse, India. India is separated into 25 states and 7 territories which create 16 major languages and 1,000 minor languages and dialects. This diversity in language creates somewhat of a barrier for India to become one of the foremost leaders in world because of the lack of unity. Although, in the past, the India government has taken steps to correct this matter with promoting Hindi as the national language. However, Indians who cannot speak Hindi frowned upon this notion. They believed the best jobs would go to Indians who spoke Hindi and with their pride of their regional languages kept them from accepting this unity, thus government decided against this idea. Now, the India government recognizes 13 regional languages as official languages. Children in schools learn Hindi as their second language, with English being used primary in higher education. Education has become the most recognizable forms of advancing one's country, India has exploded in schools and enrollment in these schools. As we can see by page 2, both chart's, the difference in a little more then 10 years is considerable. Both school enrollment and the number of educational institutions have increased by an average of 63%, however do not get fooled by these numbers. The Indian's school system are extremely overcrowded and many children drop out to get a job to help support their families. This problem with India's educational system falls in two parts, the first being that children who do drop out to find a job, is part of the social problem that India has been trying to correct. The Indian government started this quest to eliminate child labor in 1986 with a whole section in the United Nations' convention on the Rights of the Child. Additionally, in 1986 they passed the Child Labor Act that intended to ban the employment of children in occupations that are considered hazardous and to regulate conditions of work for children employed in occupations where child labor is not actually banned. However, as we can see by the summery of this act it does not make the necessary changes to the social conditions in which children have to work to ensure that the family has money. The second problem with the educational system in India is the overcrowding. However this occurrence has more to do with the situation of population

Dumbing us down: Weapons of Mass Destruction Essay

In the article â€Å"Dumbing us down: Weapons of Mass Destruction† John Taylor Gatto explains how today’s education system needs to be changed to focusing more on children’s interests instead of an institutionalized curriculum. He wants to revolutionize the school system to something similar to his education in a small town called Monongahela, Pennsylvania. When he went to school he was taught through classical schooling, which trained him to develop independent thinking and the appreciation for great old books before his time. In his small town of 4500 numerous important people have been brought up there including: Joe Montana, the founder of the Disney channel and the inventor of the nerf football. He thinks perhaps the success of these people is related to how they were brought up in school getting a hands on experience by cooking there own school meals, handling the daily school maintenance. He questions how college admission such as Harvard put such a big em phasis on standardized test. Gatto thinks that the education system was founded through a strict military system in Germany to keep the lower and middle classes grounded so leaders could keep capitalism running. During his time as a teacher he talks about how he wanted his students to get hands on experiences. For example one of his classmates was interested in comic book art so he sent her to watch a comic book artist for a week. The last part of the article talks about a way to stand up to the current education system by using Mellville’s moran genius in Bartleby, the scrivener. This is a way to peacefully refuse to go by the current system and simply reject it by getting large groups to not take the tests that schools hand out. Although John Gatto has some very intriguing information I, strongly disagree with his article. He never gives a reasonable way to fix our curriculum, but can only hope enough people agree with him to refuse it. The American school curriculum is great because if you work hard and make good grades then many doors will open through numerous colleges and scholarships. I think standardized testing is crucial to our education system because without it there would be no way to gage where every student should go after high school. John Gatto wrote this article specifically because he has been on two different sides of American education. In his youth, he was taught with more hands on learning that molded his view of how children everywhere should be taught. He is biased because of how great of success some people have had coming out of his small town of 4500 people. Then he was thrown into a unfamiliar way of teaching when he taught at a upper Manhattan school. In the Manhattan school a big amount of the focus was on getting kids ready national achievement tests. Although he may be right about how the curriculum was just turning into a achievement prep course, the reality of current schooling is how good you can do grade wise and on achievement tests like the ACT and SAT. In the article he tells of how it was his mission to teach beyond the boundaries of standardized testing and promote a more hands on type of learning so that his students would be motivated to seek out what they were passionate about. Hands on teaching is great, but what happens when they leave his class and are thrown out into standardized testing without and experience or practice. The article never really answers how his students did in the future but he was awarded the New York teacher of the year, and has written numerous books on our failing education system. John Gatto puts real life examples of how his teaching has affected students, which makes his argument a lot more compelling. He tells of how he sent a girl to the state capitol to speak to her local legislature and now she is a trial attorney. In the last part of his article he digs deep in how are education system needs to be reformed, using examples of college dropouts such as bill gate and Steve Jobs who are now running today’s economy. The article states how the government is not going to fix this problem, but it is up to the people to be educated enough to solve it themselves. He gives outlets such as home school or keeping your children aware that having bad grades is not the end of the world. The last paragraph goes into detail about how there are many different ways to get around the school system, but he never gives any real way that it could ever be changed. In the Article John Gatto expresses how achievement test are a waste of time in school, but I think that they are extremely important in showing where every student in the country stands. If we did not have standardized test it would be unfair to students who are in a lot more challenging schools. I did not think standardized testing was important either until my time at Baylor. My eyes were opened when kids with 4.0s in high school were struggling through there first semester. I never realized that some of these kids went to easier high schools then me, and were not prepared for the rigorous curriculum Baylor has to offer. For me standardized testing helped me get into a good college, because my high school was hard and I was not able to make good grades. If Baylor simply placed all its emphasis on GPA there is no way I would be at this school. Standardized testing is said to be a â€Å"pack of words† (Gatto John 593) by Gatto which is so false, because with out it there is no way for students in my situation to be given the opportunity to go to great schools like Baylor. I am thankful for my tough high school education because now at Baylor it is easy for me to stay organized and make good grades. Achievement tests also help kids who are in schools that are not as aca demically demanding. Colleges now have achievement tests like the SAT so they can gage where a student’s intelligence level is on providing admission into their school. John Gatto talks about how he was educated in a classical style with more hands on teaching, and when he was younger college was much to get into. I have talked to my dad and his friends and they say the SAT was almost optional in their time, and you could almost pick any school back then to attend. Today if students want to be taught a classical learning style they would have to be home schooled, because of how expensive it is already to fund the public school system the United States. He is right that hands on learning is critical for children, but a good basic education is needed for kids to be successful out of college. I think that in present times the SAT is critical for students in any situation to rise above and get into a college that is right for them regardless where they grow up. In the article Gatto does not like the r ole capitalism plays in our school system, even though it is actually what makes it possible for the individual to succeed no matter what background they came from. He thinks that capitalism in our schools is a way of keeping lower and middle classes in line when in reality it is there to help people willing to put in the work to get out of there respected social class. Capitalism is why people immigrate to America everyday; knowing that are country promotes the freedom to succeed economically and socially regardless of where you are from. Public schools may not all be on the same playing field academically, but that does not have to stop some one who is smart and motivated. Unlike some other countries, we give everybody a chance to succeed to the best of their abilities. It is impossible to give everyone the same education, but a strict curriculum and government regulations is the best attempt. Capitalism goes hand in hand with another prime example about how college drop outs such as Bill Gates are now some of the richest men in the world. Only in America is this possible, in places like china if you do not have a high education you are given limited opportunity. Gatto does a lot of complaining in his article, but has no real solutions except keeping your child aware that doing well in school will not define your future. I think Gatto is so corrupted by his small town upbringing that he does not understand that his type of education cannot be afforded by every body. Capitalism is what America and education are based of off, and with out it there would be no way for lower or middle class people to display their full potential. I completely disagree with John Gatto’s article, and think it could be hazardous for some people to read. If this article is read wrong children, even young adults will be under the impression that school is not that important; and be under the impression that it is, better to rebel against our school system then to flourish in it. Achievement tests are how capitalism is integrated into our schooling system, and with out it I fear where we would be as a country. Works Cited Wood, Nancy, and Miller James. Perspectives On Argument. 7th ed. New Jersey: Pearson Education, 2012. Print

The Positive and Negative Impact of the Portrayal of Religion

The portrayal of religion has had both a negative and positive impact. When people hear about religion, they either cringe at the fact of following outdated rules and norms, or issues that deal with politics and the media. The two most popular religions, Islam and Christianity, must be analysed to identify what religion is. While further examining these closely, a finite argument can be made that religion is unfavourable for the modern society. Our society holds the key main ingredients to the era of modernity. This huge array of advancements from the internet, television, mobile devices and even newspapers all have one thing in common: they are controlled and manipulated by norms and values (Diamond, 2010, pg. 5). When referring to modernity, the changes that religion has done to our society, for better or for worse, will be discussed. These involve any forms of change and modernism that changes the general public’s perception. One thing for certain is that the religion has the power to project any information, any way they see fit. This is especially the case when it deals with political, racial and biased topics that are very sensitive in nature (Ungerleider, 2011. pg. 24). In essence, religion is one of the most powerful things that exist because of the controlling dynamics of information (Chan, 1994, pg. 54). They can curve political agendas, promote racial class subcultures, and create public opinion with regards to any social issues. Depending on theShow MoreRelatedHow the Media has Influenced Peoples Thoughts on homosexuality1410 Words   |  6 Pageshomosexuals different portrayals and stereotypes can and have definitely derived from everywhere. These portrayals send intentional or sometimes even unintentional messages to the people on the receiving end of those messages, thereby shaping how those people view homosexuals. 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