The goal of finance is to create value for shareholders from "summary" of How Finance Works by Mihir Desai
Finance is all about creating value for shareholders. This is the fundamental goal that drives all financial decisions within a company. When we talk about creating value for shareholders, we are referring to increasing the wealth of the owners of the company - the shareholders. Shareholders are the individuals who have invested their money into the company by purchasing its stock. By doing so, they become part owners of the business. As owners, shareholders expect a return on their investment in the form of dividends and capital appreciation. This return is what drives the decisions made by companies from a financial perspective. In order to create value for shareholders, companies must make sound financial decisions that ultimately l...Similar Posts
Take calculated risks based on thorough research
One of the key principles when it comes to seizing investment opportunities is to carefully evaluate the risks involved before ...
Intelligent investing is a thoughtful and deliberate process
Intelligent investing requires a disciplined approach that is rooted in careful analysis and reasoning. It is not a hasty or im...
Emotions can cloud judgment in investing
Investing in the stock market can be an emotional rollercoaster. When emotions come into play, they can cloud judgment and lead...
Visit businesses and meet with local entrepreneurs
As I traveled through different countries on my motorcycle, I made it a point to stop by various businesses and chat with local...
Buffett avoids overly complex investments
Warren Buffett is known for his ability to make sound investment decisions by focusing on businesses that he can easily underst...
Embrace failure as a learning opportunity
Failure is often seen as a negative experience, something to be avoided at all costs. However, in the world of entrepreneurship...
Take a contrarian approach when necessary
In investing, one must be prepared to go against the grain when the situation calls for it. This means having the courage to ta...
He believes in staying within one's circle of competence
Warren Buffett emphasizes the importance of staying within one's circle of competence when making investment decisions. This me...
Learn to manage your money wisely
One of the key principles highlighted in "Rich Dad Poor Dad" is the importance of mastering the skill of effectively managing y...
Organizing requires structuring tasks and resources to accomplish the goals set during planning
Organizing is a crucial function of management that involves structuring tasks and resources in order to achieve the objectives...