The paper "Interest of Shareholders and Essence of Profit Maximization in Business" is a good example of a finance and accounting assignment. The interest of shareholders is paramount when dealing with accounting and financial statements. The essence of preparing any documents dealing with accounts and/or finance is to arrive at the ultimate outcome of either profit or loss at any accounting period (Avis 98). The financial statement for a particular period would provide the basis upon which decisions would be made. It is on this premise that the directors of a company should endeavour to achieve profit margins in order to realize growth in their entity.
Every business enterprise is formed with the sole purpose of making profits and it is these profits that will cater for the welfare of the shareholders at large. However, recent trends dictate that apart from the shareholder's interests being paramount it would also be prudent to include other performance indicators to cater for social, ethical and environmental factors. Therefore, this article will strive to bring out the line of agreement with the above enunciation. The interest of Shareholders and essence of Profit Maximization in Business Business entities are formed for venturing into profit-making.
The shareholders are keen on the profits (Leggatte 85). This has been the practice since time immemorial. According to Milan in dealing with corporate governance, one of the fundamental aspects is to adopt an approach that is integrated such that the interest of the shareholders is made known (p. 87). Those at the managerial positions are keen on aspects such as “ growth, working capital requirements and internal cash flows, investment opportunities, the record of competitive companies, comfortable industrial relations, market confidence, the company’ s public image, environmental issues and other matters beside” (Leggatte 13).
When the non-shareholders are brought to light to benefit from some act, it must be appreciated that the undertaking emanates from the shareholders themselves and so their interest is paramount (McDonnell 66).
Avis, Jo. Performance Management: Management Level. London: Elsevier, 2009.
Hunt, Ben. The Timid Corporation: Why Business is Terrified of Taking Risk. New York: John Wiley &Sons, 2003.
Leggat, W. T. The Evolution of Industrial Systems: The Forking Paths. Taylor & Francis, 1985.
Mallin, C. Corporate Governance. Oxford: Oxford University Press, 2007.
McDonnell, Brett. Research Handbook on the Economics of Corporate Law. London: Edward Elgar Publishing, 2012.
Muhr, S. Ethics and Organization Practice: Questioning the Moral Foundations of Management. London: Edward Elgar Publishing, 2010.
Mullerat, R & Brennan, D. Corporate Social Responsibility: The Corporate Governance of the 21st Century. Kluwer: Kluwer Law International, 2010.
Solomom, Jill. Corporate Governance and Accountability. New York: John Wiley & Sons, 2007.