A Company Needs Financial Objectives

question 112

Multiple Choice

A company needs financial objectives

• A)to overtake key competitors on such important measures as net profit margins and return on investment.
• B)because without adequate profitability and financial strength, the company's ultimate survival is jeopardized.
• C)to convince shareholders that top management is acting in their interests.
• D)to translate the company's business model into action items.
• E)to indicate to employees that financial objectives always take precedence over strategic objectives.

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Definitions:

Retained Earnings

Profits that a company keeps after dividends are paid, which are often reinvested into the business for growth or debt repayment.

Closed Economy

An economic model that remains isolated from global trade and international financial exchanges.

Private Saving

The portion of individual or household income that is not consumed and is set aside for future use, typically in the form of savings accounts, investments, and retirement accounts.

National Saving

National saving is the sum of private and public saving, representing the total amount of a nation's income that is not consumed or spent by the government.