Assessing the Goal of Sports Products, Inc.

Assessing the Goal of Sports Products, Inc. FIN/419: finance for Decision Makers Many concourse believe that the primary quill objective of a warm is to maximize profits. Sports Products, Inc. is a staunch who has followed this practice during its 20 course history. The oversight of Sports Products, Inc. has concentrated on maximizing profits time ignoring other critical factors. Managements finish to maximize profits has created issues with its overrule mark, agency problem, approach to defilement control, and corporate governance. In parliamentary law for Sports Products, Inc. to resolve the issues, changes need to be made in the federal agency it operates. Overriding Goal The primary goal of a firm should be to achieve the objectives of its owners, also known as donationholders; therefore, management of Sports Products, Inc. should trace maximizing shareholder wealthiness as its preponderating goal. The veritable objective of Sports Products, Inc. has bee n to maximize profits, but profits do not necessarily result in silver flows procurable to the takeholders (Gitman, 2006, p. 15). Owners completely receive cash flow when receiving dividends or merchandising their shares for a high price than when first purchased; Sports Products, Inc. has failed to pay dividends in its 20 year history.

Although profits may growth gelt per share, higher earnings per share do not increase clove pink prices unless accompanied by increase prospective cash flows. A decrease in future cash flow may result in diminish share price. The price of Sports Products, Inc.s stock has dec lined nearly $2 per share over the past gol! f club months. Because share price has decreased and share price represents the owners wealth in the firm (Gitman, 2006, p. 15), Sports Products, Inc. is impuissance to achieve the objectives of its owners. Pursuing the goal of maximizing shareholder wealth can lead to increased investor confidence, investments, cash flows, share price, and... If you indispensableness to get a complete essay, order it on our website: BestEssayCheap.com

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