Maximizing Profits and Maximum Profits - Profit Maximization Theory
Profit maximization theory is generally regarded as one of the most important concepts in management theory. It is a theory that has been developed by numerous researchers over the decades. The concept focuses on analyzing the process by which value is created and determined and then realizing the resulting value. This theory also focuses on the nature of the process itself and how it impacts the organization's internal processes and framework. Profit maximization is essentially the main objective and the first principle of financial management. It implies that each decision related to company operation is analyzed in the light of anticipated future profits. All the relevant decisions with regards to making new investments, acquisition of productive assets, expansion of existing ones etc are all studied in relation to their potential effect on future profits and hence profitability. The focus of the theory is therefore not only on the dimension of profit but also on the dimension