Primary Objective

Hi John,

Might sound like a silly question – I’ve just completed one of the mock exams on the portal and one of the questions was;

Which of the following statements describes the main objective of financial management

A. Efficient acquisition and deployment of financial resources to ensure achievement of objectives.
B. Providing information to management for the day-to-day functions of control and decision making.
C. Maximisation of shareholder wealth.
D. Providing information to external users about the historical results of the organisation

I chose C – but this was wrong, with A being the correct answer.

It stated that C would be right if it was just for a profit making business but does not take into account not-for-profit organisations.

I’m slightly worried that if this question comes up in the exam I’ll get it wrong by selecting C as it’s pretty much drilled into me that we are always trying to maximise shareholder wealth.

Thanks
Graham