Question

Which of the following best matches the primary goal of financial management?

a) increasing the market value of the firm
b) increasing the dollar amount of each sale
c) increasing the firm's liquidity
d) transforming fixed costs in to variable costs
e) increasing traffic flow within the firms stores

Answer 1

The primary goal of financial management is to increase the market value of the firm, which is reflected in maximizing shareholder value.

Step-by-step explanation:

The primary goal of financial management is to increase the market value of the firm. Among the options provided, the one that best matches this goal is a) increasing the market value of the firm. The key objective for financial managers is to make decisions that maximize the firm's value to its shareholders, which often involves maximizing share price over time. Increasing sales, improving liquidity, and adjusting cost structures may all be tactics used to reach this overarching goal, but the ultimate measure of a firm's success in financial terms is often reflected in its market value.