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The Sole Reason For A Company Case Study

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PPT Presentation Number 1 Topic: The Sole Reason for a Company's Existence is to Make a Profit According to Moyer, McGuigan, Rao, and Kretlow (2012, p.6), "shareholder wealth maximization goal states that management should seek to maximize the present value of the expected future returns to the owners"¦" Shareholders are the owners of a business. They assume the risks of investing in a business and for this reason; the top executives of the firm should put their interests first by maximizing profits. From this perspective therefore, the sole reason for a company's existence is to rake in good returns for shareholders, i.e. make a profit. Next, it is also important to note that to continue in its existence, a business must be profitable. In the words of Gitman and McDaniel (2008, p.432), "cash is the lifeblood of business. Without it, a firm could not operate." To keep their doors open, businesses must meet their expenses and cost of doing businesses. Expenses in this case include but they are not limited to payment of wages, maintenance of motor vehicles and other equipment, etc. Further, to insure themselves against any future eventualities, businesses must also set aside some cash for a "rainy day," i.e. to cater for sudden price hikes. A business would cease to operate if it lost its ability to be profitable. Thus in the final analysis, the sole reason for a company's existence is to make a profit. Businesses also have a responsibility to ensure that the goods they

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