Please can i get a feedback on this discussion post below. thank you

What is the rational for wealth maximization as a goal for a firm?

Wealth maximization as a goal is meant for financial investment decisions to be made based on business revenues for a long period of time. It accounts for risk factors to help minimize errors in the business over a long term period. It involves cash flow and risk so decisions can be made to increase wealth.

3.What is the purpose of ratio analysis?

Ratio analysis conducts a proper analysis of available financial statements. Financial institutes, banks, and other similar entities are able to make decisions based on the financial outlook of the company being evaluated. The efficiency of the company is based on management and operations shown by profits and assets earned. The performance of the company gets evaluated and compared to previous years. Overall, ratio analysis provides perspective as to whether or not a company is fiscally improving compared to previous years.

5.Why understanding of time value of money is important?

The understanding of time value of money is important because it aids the evaluation of the present value of cash flow (the incoming and outgoing of physical money as opposed to value depreciation or stock spikes). It also evaluates the value of an asset in the future. It can conduct capital budgeting, stock valuation, and more. It also shows future value through evaluation of funds received for an investment made in present time period that is meant for the future.

Ehrhardt & Brigham (2017). Corporate Finance (6th Edition). South-Western