![]() In this way, economic and social welfare is performed. When a business makes a profit, it utilizes and allocates resources properly which in turn results in the payments for capital, fixed assets, labor and organization. Profit maximization theory indirectly plays a role in economic and social well-being. When a business is unable to make profits it fails to fulfill its chief target and causes a risk to its existence. ![]() Profit determines the standard of performance of any business or company. The foundation of the profit maximization theory is profit and profit is a must for the economic existence of any company or business. ![]() Profit maximization has the following benefits: “Profit maximization may be the ‘end’ but the means to achieve this end, is what matters, and that distinguishes a company in the corporate world and the market.” – Henrietta Newton Martin Benefits of Profit Maximization: ![]() More specifically, profit maximization to optimum levels is the focal point of investment or financing decisions. ![]() According to financial management, profit maximization is the approach or process which increases the profit or Earnings per Share (EPS) of the business. Profit maximization is the capability of a business or company to earn the maximum profit with low cost which is considered as the chief target of any business and also one of the objectives of financial management. ![]()
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