Profit doesnt recognize the time value of money while wealth quantifies the same. In fact, the valuation of the stocks depends on the earning per unit and the market capitalization.ĭifference between profit and wealth maximization: Profit maximization is a tactical or a short term gain while wealth maximization is calculated from a long-term perspective and is associated with the valuation of the stocks.ĭuring evaluation of profit, the risks are not taken into account while wealth maximization includes them along with opportunities. ![]() It depends on varieties of factors such as the good will of the company or the quality of the goods and services provided to the customers.įirms can increase their customer base in the market and enhance the wealth of the stakeholders.Īll financial decisions are taken to ensure that the company records the highest net worth. What is wealth maximization: Wealth maximization is a brand concept, unlike the first one as it concentrates on enhancing the value of the stock of a company. ![]() It is essential for the survival of business because nobody wants to run a loss making enterprise.įinancial controller of the firm ensures that the profit increases but it is not the sole aim of the company. Advantages And Disadvantages Of Profit Maximization Trial Revolution Saw.
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