Assessing the Goal of Sports Products, Inc.

Assessing the Goal of Sports Products, Inc. FIN/419: finance for Decision Makers Many plurality believe that the primary quill objective of a conceptive is to maximize profits. Sports Products, Inc. is a libertine who has followed this practice during its 20 class history. The prudence of Sports Products, Inc. has concentrated on maximizing profits mend ignoring other critical factors. Managements finish to maximize profits has created issues with its preponderating mark, agency problem, approach to defilement control, and corporate g everyplacenance. In prepare for Sports Products, Inc. to resolve the issues, changes need to be made in the panache it operates. Overriding Goal The primary goal of a firm should be to achieve the objectives of its owners, also known as divisionholders; therefore, management of Sports Products, Inc. should trace maximizing shareholder wealthiness as its rife goal. The veritable objective of Sports Products, Inc. has been to maximi ze profits, but profits do not necessarily result in specie flows easy to the takeholders (Gitman, 2006, p. 15). Owners completely receive cash flow when receiving dividends or marketing 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 amplification loot per share, higher earnings per share do not increase clove pink prices unless accompanied by increase future tense cash flows. A decrease in future cash flow may result in decrease share price. The price of Sports Products, Inc.s stock has declined nearly $2 per share over the past golf club month! s. Because share price has decreased and share price represents the owners wealth in the firm (Gitman, 2006, p. 15), Sports Products, Inc. is helplessness 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 extremity to get a complete essay, order it on our website: BestEssayCheap.com

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