Ethics And Financial Management

Running head : Explaining Financial counselingExplaining the Goal of Financial focussing and the Role of Ethics[Insert name of author][Insert name of school]Explaining the Goal of Financial Management and the Role of EthicsIt has always been the stopping point of the financial managers to maximize the wealth of the shareowners of the steadfast . That is to say , we maximize the potential benefits that the soused s stakeholders depart by increasing the prize of the firm in which these shareholders hold back taken the risk of investing to . According to Ingram (1992 , the worth of a company is dependent on the capacity of the assets to produce bills flows over a period of time . This means that if the firm is able to generate a positive net interchange flow including a reasonable dividend to its owners then it said that value is createdFirms face two kinds of pay . They are accounting pay and economic profits . Maximizing accounting profits normally refers to the general corporate goal of maximizing profits as maximizing economic profits generally refers to maximizing the shareholder s wealth . Ingram (1992 ) has distinguished them by defining accounting profits as the income accumulated after the boilersuit cost is deducted from the overall revenue before the payment to shareholders is get byed and economic profits as the income accumulated after compensating for the factors of takings such as dandy , labor and others .

Moreover , she differentiated the two by motto that accounting profit does not consider all the factors of production as economic profit does and that it also does not consider compensating the shareholders for taking the risk in investing in the firmMaximizing wealth does not consequently mean that the firm has to face an unethical decision making . It is still up to the firm as to how it will perform this task . As according to Goizueta (1997 , everyone in the company would be better of if it plans for a long-term goal rather than a short-term goal . Through this , the firm can still plan on how it will maximize the wealth and at the same time be reconciled with ethical standardsReferencesGoizueta , R . C (1997 . Why Share-Owner ValueIngram , V . C (1992 . The Goal of the Firm : Maximize Profit vs . Maximize ShareholderWealthPAGEPAGE 1 Explaining Financial Management...If you want to get a full essay, couch it on our website: Ordercustompaper.com

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