Page 15 - FM Integrated WorkBook STUDENT 2018-19

The financial management function

Financial objectives

2.1 Shareholder wealth maximisation

Shareholder wealth maximisation is a fundamental principle of financial
management.

Companies may also have other objectives such as:

 profit maximisation

 growth

 market share

 social responsibilities

2.2 Measuring achievement

Ratio analysis is commonly used to measure the progress of a company towards its
objectives

Ratio analysis compares and quantifies relationships between financial variables.
You will see ratios in detail in a later chapter.

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