Answered: Why does a company needs financial…

Principles Of Marketing

17th Edition

ISBN:9780134492513

Author:Kotler, Philip, Armstrong, Gary (gary M.)

Publisher:Kotler, Philip, Armstrong, Gary (gary M.)

Chapter1: Marketing: Creating Customer Value And Engagement

Section: Chapter Questions

Problem 1.1DQ

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Question

Why does a company needs financial objectives?

A) to convince shareholders that top management is acting in their interests.

B) because without adequate profitability and financial strength, the company's ultimate survival is jeopardized.

C) to indicate to employees that financial objectives always take precedence over strategic objectives.

D) to translate the company's business model into action items.

E) to overtake key competitors on such important measures as net profit margins and return on investment.

Expert Solution

Step 1

The financial objectives of a business are focused on boosting the sales and profits of the business. However, the focus is also given to investments and economic stability. The financial objectives should be measurable so that the business can track and reach them. These are mainly inclined toward the long-term objectives of the firm.