Possible Goals If we were to consider possible fi nancial goals, we might come up with some ideas like the following: • Survive in business. • Avoid fi nancial distress and bankruptcy. • Beat the competition. • Maximize sales or market share. • Minimize costs. • Maximize profi ts. • Maintain steady earnings growth. Th ese are only a few of the goals we could list. Furthermore, each of these possibilities presents problems as a goal for a fi nancial manager.
For example, it’s easy to increase market share or unit sales; all we have to do is lower our prices or relax our credit terms. Similarly, we can always cut costs simply by doing away with things such as research and development. We can avoid bankruptcy by….