Purchase Solution

Define the goal of the firm from a finance perspective and relate this to the "stakeholder" approach

Not what you're looking for?

Ask Custom Question

1. Define the goal of the firm from a finance perspective and relate this to the "stakeholder" approach.

2. Relate the importance of economics and accounting to finance.

3. Define progressive taxes and why it is particularly important to the corporate form of business.

4. Contrast the information provided in the balance sheet and income statement.

5. Critique the benefits and drawbacks of proprietorships and partnerships as a form of business organization.

Please be as detailed as possible

Purchase this Solution

Solution Summary

The expert defines the goal of the firm from a finance perspective and relate this to the "stakeholders" approach. The importance of economic and accounting to finance are determined.

Solution Preview

1. The goal of the firm from a finance perspective is to maximize shareholder wealth. This relates to the stakeholder approach because according to the finance manager, without the help of stakeholders/shareholders investing their funds within the company, the company would not be able to expand the business, invest in more profitable projects, purchase new plant and equipment, or operate on a daily basis. Therefore, the finance manager uses financial ratios to assist him or her when making decisions on short and long-term projects and will the decisions make the company more profitable in the long-run. If so, they believe they are making the best use (maximizing) of shareholders/stakeholders money.

2. Finance is actually a combination of accounting and economics. In economics, a manager would have to pay close attention to supply and demand to determine the price of a good or the market value of a good, service, or business. In accounting, the accountant must keep good records of every transaction made with company funds and at the end of the month, quarter, or year, create financial statements. The role of the finance manager is to take in consideration how the economy will impact any transactions (used with company funds) made before making a decision. The finance manager will use the financial statements (i.e. balance sheet and income ...

Solution provided by:
  • Doctorate of Management in Organizational Leadership, University of Phoenix - Online
  • MBA, Webster Univeristy
  • Dual BS Degrees, University of South Carolina
Recent Feedback
  • "Thank you"
  • "Thank you so much! This helps me understand this a lot more. Thank you!"
  • "Thank you."
  • "Thank You, Keonda! Your response is very much appreciated."
  • "Thanks!"
Purchase this Solution

Free BrainMass Quizzes
Transformational Leadership

This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.

Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.

Lean your Process

This quiz will help you understand the basic concepts of Lean.

Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.

Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.