Do firms really act or should solely act to further shareholders welfare? Firms may follow or have to follow several other aims. Business firms seek out to achieve a high rate of growth, enjoy a considerable market share, achieve product and technological leadership, encourage employee welfare, additionally customer satisfaction, support education and research, progress community [...]

Are there other aims, besides the aim or maximum shareholders wealth, expressing the shareholders viewpoint? Several alternatives have been suggested for this, such as maximization of profit, maximization of earnings per share, maximization of equity which is defined as equity earnings/ net worth. Maximization of profit is not as all-encompassing a goal as maximization of shareholder wealth. [...]

What are the objectives of capital budgeting? Financial theory, in general, rests on the principle that the aim financial management should be to make the most of the present wealth of the firm’s equity shareholders. For a firm whose equity shares are dynamically traded on the stock market, the assets of the equity shareholders is replicated [...]

What is Ecological Analysis ? In recent years, environmental concerns have assumed a great deal of importance – and rightly so. Ecological analysis should be done particularly for major projects which have significant ecological inference like plants and irrigation schemes, and environmental – polluting industries like bulk drugs, chemicals and leather processing. The key questions raised [...]

What is Economic Analysis? Economic analysis is also referred to as social cost benefit analysis and is concerned with evaluating a project from the larger social point of view. In such a judgment the focus is on the social costs and benefits of a project which may usually be different from its economic costs and [...]

What is Financial Analysis? Financial analysis tries to ascertain whether the planned project will be financially feasible in the sense of being able to meet the saddle of servicing debt and whether the planned project will convince the return expectations of those who provide the capital. The feature that have to be looked into while [...]

What is technical analysis? Examination of the technical and engineering characteristics of a project needs to be done repeatedly when a project is made. Technical analysis seek out to decide whether the fundamentals for the successful commissioning of the project has been considered and reasonably good options have been made with respect to location, size, process [...]

What is Market Analysis? Market analysis is associated primarily with two questions: What would be the collective demand of the planned product / service in future? What would be the market share of the project under evaluation? To answer the above questions, the market analyst needs a broad variety of information and suitable forecasting methods. The [...]

What are the Pros and cons of conglomerate diversification? The protagonists of conglomerate diversification argue that it helps a company in reducing its overall risk exposure. As the business are characterized by cyclicality it is desired that there are at least two to three distinct lines of business in a firm’s portfolio.  This is one [...]

What is conglomerate diversification? Conglomerate diversification involves diversification into unrelated areas, is very common in India. Despite the popularity, conglomerate diversification is considered to be a highly controversial investment strategy. The following are the different aspects of conglomerate diversification: ·         Pros and cons of conglomerate diversification ·         International experience in conglomerate diversification ·         Compulsions for conglomerate [...]