Shareholders are puzzled this year. Last year the company has reported an increase in sales and together with cost-cutting measures, the company announced an increase in net profits. However, there was not much impact on the share price of the company, and in fact, it has decreased. What explanations can you give to the possible cause of the situation? How useful is information from Financial Statements to be used in decision making? Is it sufficient for companies to just increase profits as their objective?

Prepare a 3-to-5-page submission (exclude the reflective task question and reference). Answers with verbatim quotations from references will not be accepted.

Answer rating: 100% (QA)

The share price of the company is influenced by the state of the market as a whole Businesses cannot merely focus on increasing profits as their goal When making decisions the business should also tak... View the full answer