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That maximisation of shareholders purchasing power.

In an efficient market, it is the maximisation of the current share price and to achieve maximum wealth while minimizing costs and inefficiencies. This involves increasing the Earning per share of the shareholders and to maximize the net present worth. Wealth is equal to the difference between gross present worth of some decision or course of action and the investment required to achieve the expected benefits. Gross present worth involves the capitalized value of the expected benefits. This value is discounted at some rate, this rate depends on the certainty or uncertainty factor of the expected benefits. The Wealth Maximization approach is concerned with the amount of cash flow generated by a course of action rather than the profits. Profit maximization relates to profits *only* while shareholder wealth also involves total company equity, debt ratios, etc. Management could focus on profit maximization over a longer period of time, while the shareholder would rather see stock values and corporate total value increase immediately. If management focused on short-term profit maximization, say at the expense of long term sales revenues, then shareholder wealth (stock price) could actually decrease as a result of the loss of market share.

Profit Maximization Goal Objective: Large amount of profits Advantages: 1. Easy to calculate profits 2. Easy to determine the link between financial decisions and profits Disadvantages: 1. Emphasizes the short term 2. Ignores risk or uncertainty 3. Ignores the timing of returns 4. Requires immediate resources

Stockholder Wealth Maximization Goal Objective: Highest market value of common stock Advantages: 1. Emphasizes the long term 2. Recognizes risk or uncertainty 3. Recognizes the timing of returns 4. Considers stockholders return Disadvantages: 1. Offers no clear relationship between financial decisions and stock price 2. Can lead to management anxiety and frustration 3. Can promote aggressive and creative accounting practices

Hierarchy below CFO in organization


Chief Financial Officer



Treasury and investments


Planning and budget


Purch asing agent

Pucha sing coord inator

Accou nting assist ant

Assistant Treasure r

F&A Cashier

Payrol l and Tax

Financial Services

Financi al Analyst

Best practice intiative


Purchasing assistant

Administra tive clerk

Administra tive clerk

Administra tive clerk

Administra tive clerk

100 years old companies

S. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Company name The East India Company Saint-Gobain Hudsons Bay Company Barclays PLC Bank of Scotland The Royal Bank of Scotland plc Faber-Castell Jas Hennessy & Co. Bank of Ireland Bank of New York Mellon ITC Limited London Stock Exchange Group Colgate-Palmolive Company Peugeot BMO Financial Group New York Stock Exchange Euronext Johnnie Walker Rose Law Firm DnB NOR ASA ABN AMRO Bank N.V. Cadbury plc JPMorgan Chase Incorporation name The Governor and Company of Merchants of London trading with the East Indies Manufacture royale de glaces de miroirs The Governor and Company of Adventurers of England trading into Hudson's Bay Goldsmith bankers The Governor and Company of the Bank of Scotland Society of the Subscribed Equivalent Debt Faber Enterprise Hennessy Distillery Bank of Ireland Bank of New York Wills & Co. London Stock Exchange William Colgate & Company Coffee Mill Co. Bank of Montreal New York Stock & Exchange Board Walker's Kilmarnock Whisky Rose Law Firm Christiania Sparebank Nederlandsche Handel-Maatschappij Cadbury Brothers of Birmingham Chemical Bank of New York Location UK France Canada UK Scotland Scotland Germany France Ireland USA India UK USA France Canada USA Scotland USA Norway Netherlands UK USA Industry Trading Construction materials Retail Banking Banking Banking Stationery Cognac Banking Banking Consumer goods Stock Exchange Household and healthcare Automobile Banking Stock Exchange Brewery Law Firm Banking Banking Confectionery Banking Year 1600 1665 1670 1690 1695 1707 1761 1765 1783 1784 1790 1801 1806 1810 1817 1817 1820 1820 1822 1824 1824 1824

23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53

Standard Life plc Fortune Brands Schneider Electric Procter & Gamble Co. Tiffany & Co. First National Bank Reckitt Benckiser plc Dun & Bradstreet People's United Bank The Economist Group New York Life Insurance Company Siemens AG Deloitte Touche Tohmatsu Limited Pfizer Incorporated PricewaterhouseCoopers American Express Company Bank of the Philippine Islands The New York Times Reuters Group Limited The Western Union Company PNC Financial Services Group, Inc. Bausch & Lomb Otis Elevator Company Tissot watches Standard Chartered PLC Levi Strauss & Co. Louis Vuitton Malletier UBS AG Aditya Birla Group United Breweries TAG Heuer

Standard Life Assurance Company William Teachers Blended Scotch Groupe Schneider Procter & Gamble Tiffany, Young and Ellis Easter Province Bank Reckitt & Sons The Mercantile Agency Bridgeport Savings Bank The Economist Nautilus Insurance Company Siemens & Halske Deloitte Auditors Charles Pfizer and Company Price accountant Wells, Butterfield & Company Banco Espaol-Filipino The New York Times Submarine Telegraph New York & Mississippi Valley Printing Telegraph Company Pittsburgh Trust and Savings Company Bausch & Lomb Otis Elevator Company Tissot watches Chartered Bank J. Strauss Brother & Co. Louis Vuitton Union Bank of Switzerland Birla Group of Companies United Breweries Heuer Chronograph

Scotland Scotland France USA USA South Africa UK USA USA UK USA Germany USA USA UK USA Phillipines USA UK USA USA USA USA Switzerland UK USA France Switzerland India India Switzerland

Life Insurance Scotch Whisky Electrical Equipment Consumer goods Jewellery Banking Consumer Goods Business Information Banking Publication Life Insurance Communication and power Audit and advisory Pharmaceutical Audit and advisory Banking Banking Publication News agency Financial Services Financial Services Eye health care Elevators Luxury watches Banking Clothing Retail Banking Textile, cement Brewery Luxury watches

1825 1830 1836 1837 1837 1838 1840 1841 1842 1843 1845 1847 1849 1849 1849 1850 1851 1851 1851 1851 1852 1853 1853 1853 1853 1853 1854 1854 1857 1857 1860

54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78

Yash Birla Group Bacardi Bayer AG Royal Bank of Canada HSBC Holdings plc Allahabad Bank BASF SE Thomas Cook Group Nokia Corporation Nestl S.A. Metropolitan Life Insurance Company, or MetLife Tata Group Goldman Sachs, Inc. KPMG Mitsubishi Group Continental AG Ingersoll-Rand plc Kimberly-Clark Corporation Barnes & Noble, Inc. Brihanmumbai Electric Supply and Transport Undertaking (BEST Bus) Morgan Stanley Smith Barney Kohler Company Bombay Stock Exchange Limited Ericsson The Bombay Dyeing & Mfg. Co. Ltd.

Yash Birla Group Santiago de Cuba distillery Bayer AG Merchants Bank Hongkong and Shanghai Banking Corporation Allahabad Bank BASF Thomas Cook and Son Nokia Aktiebolag Anglo-Swiss Condensed Milk Company National Union Life and Limb Insurance Company Cotton Trading Company Goldman Sachs Peat accounting firm Mitsubishi shipping firm Continental-Caoutchouc und GuttaPercha Compagnie Ingersoll Rock Drill Company Kimberly, Clark and Co. Charles Barnes book-printing business Bombay Tramway Company Limited Charles D. Barney & Co. Sheboygan Union Iron and Steel Foundry The Native Share & Stock Brokers Association Lars Magnus Ericsson telegraph equipment repair shop Bombay Dyeing

India USA Germany Canada UK India Germany UK Finland Switzerland USA India USA Netherlands Japan Germany Ireland USA USA India USA USA India Sweden India

Auto-components, power Brewery Pharmaceutical Banking Banking Banking Chemicals Travel agency Mobile phones Coffee, dairy products Life insurance Steel, Power Banking Audit, Advisory Automobile, Industrial goods Automobile Industrial goods Textiles, Paper Retail Transport Finance Plumbing Stock Exchange Mobile phones, Telecom Textiles

1861 1862 1863 1864 1865 1865 1865 1865 1865 1867 1868 1868 1869 1870 1870 1871 1871 1872 1873 1873 1873 1873 1875 1876 1879

79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104

Dow Jones & Company Daimler AG Bulgari NCR Corporation Marks and Spencer plc Dabur India Ltd. AT&T Corporation Unilever Avon Products, Inc. Johnson & Johnson General Electric Company plc Yamaha Corporation Kirloskar Group Nintendo Co., Ltd. Fluor Corporation Emerson Electric Company Koninklijke Philips Electronics N.V. The Coca-Cola Company Eastman Kodak Company Amrutanjan Healthcare Limited Popular, Inc. The Hershey Company Luigi Lavazza S.p.A. Harris Corporation Reebok International Limited koda Auto

Dow Jones & Company Benz & Company Bulgari National Manufacturing Company of Dayton, Ohio Michael Marks & Thomas Spencers stall Dabur American Telephone & Telegraph Company Lever Brothers California Perfume Company, Inc. Johnson & Johnson G. Binswanger and Company Nippon Gakki Company, Limited Kirloskar Brothers Limited Nintendo Koppai Fluor Brothers Construction Company Emerson Electric Manufacturing Co. Philips Company The Coca-Cola Company Eastman Dry Plate Company Amrutanjan Banco Popular Milton Snavely Hershey candy shop Lavazza Harris Automatic Press Company J.W. Foster and Sons Laurin & Klement

USA Germany Italy USA UK India USA UK USA USA UK Japan India Japan USA USA Netherlands USA USA India Puerto Rico USA Italy USA UK Czech Republic

Stock Exchange, information Automobile Luxury goods, jewellery Information Technology Retail Healthcare Telecom Consumer goods Cosmetics Healthcare Engineering Automobiles, electronics Industrial goods Video gaming EPC Electrical goods Consumer electronics Soft drinks Imaging Ayurvedic medicine Finance, Insurance Foods Retail coffee Communication equipment Sports equipment Automobile

1882 1883 1884 1884 1884 1884 1885 1885 1886 1886 1886 1887 1888 1889 1890 1890 1891 1892 1892 1893 1893 1894 1895 1895 1895 1895

105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131

Eveready Battery Company, Inc. Godrej Group The Goodyear Tire & Rubber Company Union Carbide Corporation NEC Corporation Federal-Mogul Corporation Fiat S.p.A. Renault S.A. United States Steel Corporation J. C. Penney Company, Inc. Shalimar Paints 3M Company Harley-Davidson Taj Hotels Resorts and Palaces Ford Motor Company Rockwell Automation HEB Grocery Company, LP Rolex SA American Greetings Corporation, Inc Corporation Bank Kellogg Company Honeywell International, Inc. Rolls-Royce Limited Xerox Corporation SKF Vadilal Industries Limited Royal Dutch Shell plc

American Electrical Novelty & Manufacturing Company Godrej Goodyear factory Union Carbide Nippon Electric Limited Partnership Muzzy-Lyon Company Fabbrica Italiana Automobili Torino Socit Renault Frres U.S. Steel The Golden Rule store Shalimar Paints Colour & Varnish Ltd. Minnesota Mining and Manufacturing Company William S. Harley & William A. Davidson Taj Ford Motors Compression Rheostat Company Here Everythings Better Wilsdorf and Davis American Greetings Corporation Bank Battle Creek Toasted Corn Flake Company Honeywell Heating Specialty Co. Rolls-Royce The Haloid Photographic Company Sven Wingqvist's Swedish patent Vadilal Gandhi soda fountain Royal Dutch Shell Group

USA India USA USA Japan USA Italy France USA USA India USA USA India USA USA USA Switzerland USA India USA USA UK USA Sweden India Netherlands

Batteries FMCG Rubber Tyres Industrial goods Telecom, Consumer Electronics Automotive, Energy Automobile Automobile Steel Retail Paint Adhesives, Abrasives Motorcycles Luxury hospitality Automobile Automation, power Retail Luxury watches Greeting cards Banking Foods Aerospace, Automation and Control Automobile Imaging, Document services Automotive Foods Oil and gas

1896 1897 1898 1898 1898 1899 1899 1899 1901 1902 1902 1902 1903 1903 1903 1903 1905 1905 1906 1906 1906 1906 1906 1906 1907 1907 1911

132 133 134 135 136 137 138 139 140 141 142 143 144 145

CIT Group Inc. General Motors Company Audi AG Suzuki Motor Corporation Bugatti Automobiles S.A.S Maybach-Motorenbau GmbH BP p.l.c. Radisson Hotels Alfa Romeo Automobiles S.p.A. Hallmark Cards Hitachi, Ltd. Samsonite Corporation IBM Whirlpool Corporation

Commercial Credit and Investment Company General Motors Corporation Horch Automobil-Werke GmbH Suzuki Loom Works Bugatti Auto Luftfahrzeug-Motorenbau GmbH Anglo-Persian Oil Company Radisson A.L.F.A. Hallmark Hitachi Shwayder Trunk Manufacturing Company Computing Tabulating Recording Corporation Upton Machine Company

USA USA Germany Japan France Germany UK USA Italy USA Japan USA USA USA

Financial services Automobile Automobile Automobile Automobile Automobile Oil and natural gas Hospitality Automobile Greeting cards Consumer electronics Luggage goods Information Technology Consumer electronics

1908 1908 1909 1909 1909 1909 1909 1909 1910 1910 1910 1910 1911 1911

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