Financial management Essay Example | Topics and Well Written Essays - 250 words - 1

Financial management - Essay Example The Return on Equity, ROE, measures how much profit a company earned in comparison to the money shareholders have invested. Generally, the higher it is the more promising a company is. Potential investors rely on ROE when deciding whether or not to invest their money in a company. Furthermore, financial institutions use the ROE to assess capability of a company meeting its loan repayment obligations (Bull, p.29). Net profit margin is the ratio of net profits to net sales of a company.   This ratio reflects companys efficiency especially within its industry.   Investors are attracted to stocks of companies with high net profit margin (Moyer, James and William, p.70) It is the ratio of company market share price to Earnings per share and is mostly used as a valuation of investments indicator. P/E reflects the premium paid for a share and thus growth investors look for higher P/E ratios in contrast to value investors. It reflects future earnings growth of a company and consequently implying it has no debt risk to banks. . It is important for investors and financial institutions to note that financial ratios are subject to weakness in accounting methods. In addition, some ratios on their own are meaningless and thus need to be combined with others to draw a conclusive financial decision. Thus, in my opinion financial ratios should be used as indicators and not as complete evidence of company financial position (Beyer,

Corporate Social Responsibility Essay Example | Topics and Well Written Essays - 2500 words - 2

Corporate Social Responsibility - Essay Example For long-term benefits to the organization, CSR should be made a part of the firm's strategic perspective and operations. This paper proposes to discuss Corporate Social Responsibility (CSR), taking into account various factors including consumer rights, the significance of ethical consumerism, fair trade consumerism, ecological sustainability, and the cause commerce approach which promote the implementation of CSR. It has been recognized that the activities of an organization influence the external environment, hence it is important that the organization should be accountable to not only its stakeholders, but also to a wider community. This concept initially took root in the 1970s, and grew as a concern for the company as a member of society, with a wider view of company performance including its social performance (Crowther & Rayman-Bacchus, 2004: 3). Though community accountability was acknowledged as essential, the focus of big business on financial results was observed to be an impediment to social responsiveness, especially in the early years of the accountability concept taking shape. There is now an increasing move towards accountability of companies towards all participants, and this recent phenomenon of corporate social responsibility is becoming the norm with all organizations (McDonald & Puxty, 1979: 53).Corporate social responsibility (CSR) refers to a company including in its deci sion making and operations, ethical values, employee relations, compliance with legal requirements, transparency, and overall respect for the communities in which they operate. CSR is more than occassional community service action, it is a corporate philosophy that is the driving force behind strategic decision making, selection of partners or collaborators, hiring practices and ultimately brand development (Werther & Chandler, 2006: 8). CSR includes how businesses and organizations manage the impact that they have on the environment and society: particularly how organizations interact with their employees, customers, suppliers, and the communities in which they operate. Also significant is the extent to which they attempt to protect the environment, and solve new corporate problems such as the exploitation of child labour which may be occurring thousands of miles away as part of the corporate activity (Crowther & Green, 2004: 174)."Corporate social responsibility encompasses the ra nge of economic, legal, ethical and discretionary actions that affect the economic performance of the firm" (Werther & Chandler, 2006: 10). This includes legal or regulatory requirements faced in day-to-day operations. Being socially responsible and adhering to the law is an important aspect of any ethical organization. However, legal compliance is only a basic condition of CSR; strategic CSR gives priority to the ethical and discretionary concerns that are less precisely defined and for which there is often no clear or collective consensus from the part of society. Corporate social contract is related to the social responsibility that companies have towards the consumers and to the society at large. Thomas Hobbes' concept of social contract regards corporate activity as morally good if it maximises human welfare, in which collective welfare would be considered above