Profit maximization as the goal of financial management there are defects are

The following defects exist in taking profit maximization as the financial management objective: ① No consideration of profit realization time and time value of money; ② No consideration of risk issues. Different industries have different risks, the same profit value in different industries has different meanings, for example, the risk of higher high-tech enterprises and relatively small risk manufacturing enterprises can not simply compare the amount of their profits; ③ does not reflect the relationship between the profits created and the capital invested; ④ may lead to short-term tendency of the enterprise financial decision-making, affecting the long-term development of enterprises.

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Response time: 2021-05-17, please refer to the announcement on the official website of Ping An Bank for the latest business changes.

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