It will include how the company sell their products by minimizing the cost and maximizing the profits. Besides that, the ratios also show the company’s ability to measure the overall efficiency by generating returns for its shareholders. Thus, a higher value of profitability ratios means that the company is doing well and it is good at earning profits, revenues and cash flows. Profitability ratios are of little value in isolation. By comparing and analyzing the capability of competitors, the company can look at their own profitability compared to their competitors’ profitability because it will give them very useful and meaningful information.
Ethical behavior can only attract customers towards the organization boosting the sales and profits Consumers are quite touchy when it comes to business who practice business ethically and that only yields into higher sales and profits. Also they generally tend to endorse such brands or the company. If one is looking to sustain the business for a long term, only ethical practices help you achieve
Price in this case is a guarantee of the quality present in the product. Moreover, high pricing represent an element of differentiation that the customer appreciates. However this is not a setback, LVMH has managed to have world wide presence and success. To accomplish it its selective retailing division is of high importance. Nevertheless, promotion posses the major challenge since its through this that the image of the product its transmitted that is why the company poses a major part of its budget in this section.
Egoism focuses on what is best for one’s self. The top executives may have followed this ethics system because they made millions of dollars off of the Enron scandal even though they knew what they were doing was wrong. Since they were doing what was best for them, they must have been acting ethically. It could also be argued that utilitarianism was at work in regards to the Enron scandal. Utilitarianism holds that an action is ethical if it does the greatest amount of good for the greatest number of people.
Partnering with TA Associates will help to strengthen TEOCO’s current financial condition as well as provide a strong support for the global network of relationships, according to Calo et al. (n.d.). What are the expectations of both parties? How can the companies ensure that these expectations will be met? Accordingly, both parties wanted to achieve a positive ROI and high profit.
The CEO will be attempting to make the shareholders happy, and acquiring money for the shareholders is a great way to do it. Under this theory, the only permissible way to incur a financial loss for the sake of an ethical requirement is if that ethical requirement
Profit (revenue & cost) Profit is often defined as a financial gain, especially the difference between revenue and expenditure. This performance indicator is integral to the success evaluation of any business since it represents the very economic essence of the business. It has often been termed the engine oil of businesses, since its lack could nail a business in its coffin forever. Profits can be increased by either reducing costs or increasing revenues, holding other factors constant. At StarLife, one of the resources used to boost revenues is Sales and Marketing.
As things come together a good strategy plan ultimately will lead to name recognition for your company and a distinctive edge or advantage over the competition. Ideally, this is what you look for as a business. You want something that sets you apart from others competing within your market. A competitive advantage is important because it creates a loyal following of consumers, which leads to more revenue for the
But why firms advertise so much? As I noted above advertising increases consumer¡¦s information. So we can suppose that a firm which advertise much, has high quality products. A very expensive advertising campaign is something like a signal to potential consumers, that the firm believes that its product has good quality. Furthermore the company believes that because of its good quality products, is going to make repeat sales for a long time in order to ¡§recoup the fixed costs of initial advertising¡¨.
The directors of companies have a fiduciary responsibility to act in the best interest of the shareholders. The managers are agents of the shareholders and therefore have a moral obligation to manage the firm in the interest of the shareholders, which obviously is to make as much money as possible and maximize shareholder wealth. The shareholders are the owners of the organization and therefore the profits belong to them. In conclusion, Friedman believes that business is to maximize profits. He suggested a healthy corporation has to be not only ethically good, but also being economically good.