One most important objective of Financial Management is to maximize shareholders profits (value), accomplish a place between competitive advantages would be another goal of business strategy. A CEO is a person who is responsible achieving this level of his business decided the short or long term vision and predict the best way to accomplish that.
I would like to talk about the different between short and long term plan for financial managers
Short-term Goals
When you're establishing your financial plan, the first thing you need to do is identify both your short-term and long-term goals. Identifying goals and a plan to support them can bring you assurance of a sound financial future. Without clearly identified goals and a supportive plan, there’s the tendency to mismanage your money with fruitless spending leading to the potential for financial trouble.
Think of your goals as the foundation for your financial plan. Each financial goal should have a time horizon and can be a stepping stone for a future goal. Short-term goals differ from long-term goals usually in the sense of timing. Short-term goals are generally smaller in scope and dollar amount with a definite target date for accomplishing them.
Long-term Goals
There are short-term goals and long-term goals and some goals that fall in between. The distinction between the categories is usually related to the amount of time it takes to accomplish the goal and the financial commitment to achieve them. Short-term goals are achievable in the more immediate future and intermediate goals take slightly longer and more of a financial commitment. Long-term goals usually take more than five years to accomplish and require a disciplined saving and investing strategy over a long time period. The most important long-term financial goal for everyone is to save for retirement. For most people, this is the first priority over saving for any other goal.
The first step is to develop good savings and investing habits and establish a financial plan when you're young. If you start contributing to an employer's 401(k) plan or an IRA or Roth IRA as soon as you begin working, and consistently put money in those retirement accounts, you'll be on the right track to accumulate enough money for your retirement years.
I am still looking and finding this important part that manager want to create sustainable competitive advantage for a long term with a long forecasting indications to improve the value but should be with long term productivity I read this interesting article about how to shareholders value and I like to add it while I am thinking it is important point to discuss.
Creating Shareholder Value
Critics imply that managing for shareholder value is all about maximizing the short-term stock price. Companies that manage for shareholder value, the thinking goes, do whatever it takes to engineer an ever-higher market price. That is a profound misunderstanding. The premise of shareholder value, properly understood, is that if a company builds value, the stock price will eventually follow. The objective is to build value and then let the price reflect that value.
While some executives allow that they should not manage to increase the short-term stock price, they remain reluctant to embrace the concept of managing for shareholder value. It is worth explaining why this is the right objective, and how other stakeholders — including employees, customers, and suppliers — fit into the picture.
Making the Financial Markets Safe
The second case which is talking about making financial market safe, financial crisis and risk
Management are two most important area that we should aware in our forecasting and prepare for all possible risk to know latter what to do. It hard to predict specifically but having some initial plan would help.
The impact on risk management failure of financial crises
An extensive report released by the
higher current ratio implying that is more capable of paying its obligations. Although both companies have the ability to pay current debt, financial records show PepsiCo’s shows the likelihood to stay afloat because their short term debt and current portion of long term debt is more than six times greater. Basically, Pepsi is more liquid. According to the financial report, it is noted that Pepsi had a higher Current Ratio than Coca-Cola, in 2008 we see that Coca-Cola might have struggled to pay off…
Financial management article research questions. 1) This articles primary topic or focus is about managing effective disaster recovery. 2) Main conclusions are methods of disaster recovery and making sure that it does not mean potential loss of data. This includes Taking care of fundamentals e.g making sure basic secure backups are in place for data files and software that run the business. Spending a specific amount of money to ensure fundamentals of disaster recovery are taken care of. Be more…
professor’s discretion. By the way, this syllabus is a compilation and explanation of the rules, so it is a rather serious document. Finally, if you find what you believe to be an error and/or an omission, please notify your professor. FINC 6301 Financial Management Fall 2012 Syllabus FINC 6301 is the core finance course for the MBA program. We will be studying many of the topics covered in the course prerequisite FINC 5308 (or in the six hours of undergraduate finance for which you have already received…
Scotch whisky, there are two projects to invest, namely rye whisky project and the project of expanding Highland Princess to the Asian and Far Eastern together with the liqueur project under the capital constraint of £400,000. As appointed to the financial consultants, we should make good decision for shareholders to gain more profits in long run. To measure the future investment performance we should consider the cash flow resulting from the actions. 2. Investment appraisal methods: NPV, IRR…
Chapter 1 Introduction to Financial Management Forms of Business Organization Stock Prices and Shareholder Value Intrinsic Values, Stock Prices, and Executive Compensation Important Business Trends Conflicts Between Managers, Stockholders, and Bondholders 1-1 Finance Within the Organization 1-2 Forms of Business Organization Proprietorship Partnership Corporation 1-3 Proprietorships and Partnerships Advantages Ease of formation Subject to few regulations No…
FINANCIAL MANAGEMENT 5. Measuring Return on Investments 1. What determines the required rate of return on a project? How can we estimate the required rate of return on a project? Determined by the risk of the project Estimated by: If taking a project that does not affect firm’s risk, then use WACC If not, estimate cost of equity (unlevered) (unlevered = without the debt) 2. What are the differences between accounting earnings and cash flows? You shouldn’t use accounting…
In 1959 Markowitz did the groundwork for the capital asset pricing theory also known as CAPM. He introduced the notion of mean-variance efficient portfolio. According to him it is optimal for an investor to hold a mean-variance efficient portfolio. The mean-variance efficient portfolio is a portfolio for an investor where he minimizes the portfolio return, given the expected return and maximizes expected return, given the variance. Later Sharpe and Lintner further developed the work of Markowitz…
Define the terms finance and financial management, and identify the major sub-areas of finance. Finance is the study of applying specific value to things individuals own to include services used and decisions determined [Finance by Cornett, M. M., Adair, T. A., & Nofsinger J. (2014). M: Finance (2nd ed.)]. In simple words, finance is how much value is attributable to goods and services and the basis of such attribution. Financial management may be defined as the management of the finances of a business…