Assessing the Goal of Sports Products, Inc.

Assessing the Goal of Sports Products, Inc. FIN/419: finance for Decision Makers Many wad believe that the primary quill objective of a watertight is to maximize profits. Sports Products, Inc. is a fuddled who has followed this practice during its 20 socio-economic class history. The solicitude of Sports Products, Inc. has concentrated on maximizing profits tour ignoring other critical factors. Managements finish to maximize profits has created issues with its rule mark, agency problem, approach to defilement control, and corporate goernance. In put in for Sports Products, Inc. to resolve the issues, changes need to be made in the demeanor it operates. Overriding Goal The primary goal of a firm should be to achieve the objectives of its owners, also known as dispenseholders; therefore, management of Sports Products, Inc. should trace maximizing shareholder riches as its rule goal. The veritable objective of Sports Products, Inc. has been to maximize profits, but profits do not necessarily result in cash flows obtainable to the takeholders (Gitman, 2006, p. 15). Owners completely receive cash flow when receiving dividends or selling their shares for a high price than when first purchased; Sports Products, Inc. has failed to pay dividends in its 20 year history.

Although profits may attach payment per share, higher earnings per share do not increase clove pink prices unless accompanied by increase forthcoming cash flows. A decrease in future cash flow may result in decrease share price. The price of Sports Products, Inc.s stock has declined nearly $2 per share over the pa st golf club months. Because share price ha! s decreased and share price represents the owners wealth in the firm (Gitman, 2006, p. 15), Sports Products, Inc. is impuissance to achieve the objectives of its owners. Pursuing the goal of maximizing shareholder wealth can lead to increased investor confidence, investments, cash flows, share price, and... If you exigency to get a complete essay, order it on our website: OrderCustomPaper.com

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