MGTA05H3 Study Guide - Midterm Guide: Sole Proprietorship, Tax Haven, Shell Corporation
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MGTA05H3 Full Course Notes
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The surplus between revenue and expenses (profit = revenue expenses) Can be given to shareholders/owners as dividends or be reinvested into the company. Realized when there is a business transaction such as a sale. Maximizing shareholder value means making as much income as possible. Can be used as a measure of return on the amount the owners invested in the business. Paying them for their investment and risk in investing. Profits happen because the business produced something valuable for the customers. Owners have the power to dispose of the profit made by the business enterprise. You can view profit as revenue expenses or value generated in the business that is allocated to the owners. (cid:862)a(cid:374) e(cid:272)o(cid:374)o(cid:373)i(cid:272) e(cid:374)terprise that (cid:272)reates (cid:448)alue (cid:271)y produ(cid:272)i(cid:374)g its goods or ser(cid:448)i(cid:272)es or (cid:271)oth, realizes that value through market transactions, with the intent of producing a profit that it allo(cid:272)ates to its o(cid:449)(cid:374)ers(cid:863)
