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Flashcards in Financial management function Deck (2)
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1
Q

Purpose of financial management

Profit or wealth

Wealth = ?

A

To maximise shareholder wealth
The acquisition and deployment of financial resources to achieve key objectives

Wealth not profit - profit is short term and not a sufficient objective

Wealth = dividends and market value of shares

2
Q

Earnings per share

A

EPS = Profits distributed to shareholders / number of ordinary shares