Shareholders Value Essay Example | Topics and Well Written Essays - 1500 words

Shareholders Value - Essay Example The entries are counterbalanced so that the assets always equal the liabilities and owner's equity. The balance sheets of the company are examined by shareholders. The fundamental principles of economics are optimization and market equilibrium. The optimization principle says that people choose the best consumption patterns that they can afford. The market equilibrium principle states that prices adjust till demand equals supply. A supply curve measures how much of a good will be supplied at a given price. Suppose we reach a price p for the supply of a quantity x. The producer would be willing to supply a smaller amount at a lower price. However the entire quantity is sold at the price p. The producer's surplus measures the gains to the firm by selling all the goods at the higher price p. The concept of surplus enables us to determine the gains and losses for the firm. The consumer's surplus is the difference between the gross benefit of consuming the good and the price paid for that good. This perspective lets us understand the firm from economics theory. The concept of producer's surplus is closely linked to the concept of profit. 9. The accounting approach does not measure the large gaps between the true value of the firm and the observed market value. The economics perspective considers all the variables that influence the market till we find a match between the actual and the calculated market values of a firm. 10. Shareholders in a firm rely on accounting practices more that economic calculations because accounting numbers are easily available for analysis. 11. Every accounting decision has an economic consequence while the changes in the economic picture are not necessarily reflected in accounting. 12. While accounting is a simple process based on conventions and numbers available with the firm, economic considerations are very complex and involve many variables. The values of economic variables are not readily available and are many times external to the firm. 13. While accounting is by nature a short term activity, economic analysis is a long term activity. 14. Accounting has methods in place for auditing the firm. Economic methods do not have established audit procedures in place. 15. While accounting

Questions & answers Assignment Example | Topics and Well Written Essays - 500 words

Questions & answers - Assignment Example As the CMO, Dr. Yeasted is on the finance body making suggestions and approvals for any budgeting to be carried out. In his role, he has to prioritize issues in order for the most important and necessary at the moment to take precedence in the budget and also have to explain the same to the staff. The strategic plan at the moment in the hospital is that of trying to streamline the hospital activities and quality with the new health care policies such as the managed care and affordable care act. This is still what he worked on and the success is starting to be evident. Prior to him becoming a CMO, Dr. Yeasted was a Board member of the same hospital and hence has a cordial relationship with the board members including the chairman. This relationship is free of tension as they have known each other for long and have also worked together as physicians. The most enjoyable thing is that he gets to change the life of the community by simply making the correct decisions and implementation of the policies which is part of his job as a CMO. The least enjoyable is attending and participating in meetings which take up majority of his time (Kassel, 2015). I was surprised that the CMO had many roles up their sleeves and sometimes even did not find to practice medicine. I thought their life was just easy as there were other administrators and the Board in the hospital and hence he only had to do the approving and nothing else. According to Dr. Yeasted, in as much a health care administrator is busy with office work and meetings, he or she needs to set aside side time to visit the patients and interact on an informal basis with the staff to not only create rapport but learn more about the hospital. The CMO advices the students who wish to become administrators to become conversant with the issues of finance and take precaution about it. The finances are different from other organizations and hence need different strategies to handle them as well as know how to