Purpose of the benefits: reward the risks taken by the shareholder

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Among the different possible goals for a company, the search is an important benefit. The profit of the company (different from profit) is primarily used to remunerate the capital invested. In the case of companies called capitalists, if an investor (one of those who finance the company) decides to invest in a company rather than to conserve is the wish that the money placed in the company brings in more. If a company does not generate sufficient profits distributed as dividends, its tarnished reputation and attract more investors. Its capacity development (usually consumes capital to - for example - open branches abroad or start new innovation programs) or even its survival are so encumbered it, and may even be questioned.

For each industry, there is a level of profit "normal" expected. For example, in the pharmaceutical industry of the 2000s, the average had expected profit of 15% per annum on invested capital. If a company generates less profit, shareholders who have invested their savings (directly or more often indirectly through a bank or pension fund) are disappointed, eventually lose confidence in the investment and sell their shares: the price the company (whether or not the stock market) decreases and the remaining investors lose.

A capitalist firm whose profits are low for too long has no economic justification: it is generally closed or taken over. In the case of social economy company, she endured while making a social value to society (eg, business rehabilitation) and if it finds a suitable donor to fund potential losses (eg local authority). Finally, family businesses - both private and unlisted companies - can find a balance between high profits and social utility, while succeeding in the long term, especially in size to human scale and proximity of management vis- -vis employees.

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nice article

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