What are the three objectives of financial management?

First of all, the three objectives of financial management are:

(1) profit maximization?

1. Manufacturers engage in the production or sale of goods for profit. If the total income is greater than the total cost, there will be a surplus, and this surplus is a profit. It is worth noting that the profits mentioned here do not include normal profits, which are included in the total cost, and the profits mentioned here refer to excess profits.

If the total revenue is equal to the total cost, the manufacturer will not lose money, but only gain normal profits. If the total revenue is less than the total cost, the manufacturer will suffer losses.

3, manufacturers engaged in the production or sale of goods require not only profit, but also maximum profit. The principle of maximizing the manufacturer's profit is that the marginal revenue of output is equal to the marginal cost. Marginal income is the income increased by the last unit of sales, and marginal cost is the cost increased by the last unit of output.

4. If the marginal benefit of increasing a unit output is greater than the marginal cost, it means that increasing output can increase the total profit, so manufacturers will continue to increase output to achieve the goal of maximizing profits.

If the marginal benefit of increasing a unit output is less than the marginal cost, it means that increasing output will not increase profits, but will cause losses. At this time, in order to achieve the goal of maximizing profits, manufacturers will not increase production but will reduce production.

6. Only when the marginal revenue is equal to the marginal cost can the total profit of the manufacturer reach the maximum. Therefore, MR=MC becomes the condition of profit maximization, which is applicable to all types of market structures.

(2) Maximizing shareholder wealth

1. Maximizing shareholders' wealth means bringing the most wealth to shareholders through reasonable financial management. Scholars who hold this view believe that the purpose of shareholders to set up enterprises is to increase wealth.

2. They are the owners of enterprises and the providers of enterprise capital. The value of their investment is that they can bring future returns to the owners, including dividends and cash by selling shares.

(3) Maximizing enterprise value

1, enterprise value maximization refers to the rational financial management of enterprises, the adoption of optimal financial policies, full consideration of the time value of funds and the relationship between risk and reward, and the maximization of the total value of enterprises on the basis of ensuring the long-term stable development of enterprises. Its basic idea is to put the long-term stable development of enterprises in the first place and emphasize the satisfaction of the interests of all parties in the growth of enterprise value.

Extended data

The focus of financial management

1. Strengthen overall coordination and cooperation, and clarify the support direction and focus of the state-owned capital operating budget. The revenue scale of state-owned capital operation budget needs to be continuously expanded, the direction and focus of expenditure need to be further clarified, and the stock of state-owned capital needs to be gradually revitalized, so that the state-owned capital operation budget can focus on solving the shortage of important resources in key industries of the national economy.

2. Increase R&D investment and support for independent innovation, transform traditional industries and develop strategic emerging industries, and promote the transformation and upgrading of enterprises and the transformation of development mode.

3. Further deepen the reform of state-owned enterprises. On the premise of ensuring state-owned holding, we will further improve the property rights trading market, and revitalize the huge state-owned capital stock through various ways such as overall restructuring and listing, and introducing strategic investors such as the non-public economy.

4. Promote the diversification of investment subjects of state-owned enterprises, form an internal restraint mechanism of state-owned enterprises with clear property rights, flexible mechanism and scientific management, and establish and improve the modern enterprise system.

5, learn from international experience, realize the international docking of enterprise financial management, establish the chief financial officer system, and improve the corporate governance structure. At the same time, study and establish the appointment system of corporate financial director, clarify the position, function, responsibility and authority and work requirements of the financial director, and promote the financial director to participate in major business decisions on behalf of investors.

6, is to establish enterprise financial management ability certification system, improve enterprise financial management ability, promote enterprises to strengthen internal constraints and financial control, realize management innovation.

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