Short Term or Long Term View?
After reading the first two chapters of your textbook, evaluate the following statement:
Managers should not focus on the current stock value because doing so will lead to overemphasis on short-term profits at the expense of long-term profits.
In your post, explain what is meant by this statement. Describe how management might decide whether to focus on short term or long term goals and how that decision impacts the organization. Next, using the financial balance sheet as displayed in the text, compute an example of how focusing on short term profits can be detrimental to long term profits. Share your opinion regarding whether you feel it’s a better option to focus on short term or long term goals. Use evidence from the text or external sources to support your position. Your post should be 200-250 words in length.
Guided Response: Review several of your classmates’ postings. Respond to at least two classmates by sharing whether you agree or disagree with their view of managerial profit focus and provide advice on how to overcome the challenges they have identified.
Byrd, J., Hickman, K., & McPherson, M. (2013). Managerial Finance. San Diego, CA: Bridgepoint Education Inc.