Showing posts with label Is your company prosperous?. Show all posts
Showing posts with label Is your company prosperous?. Show all posts

Saturday 8 August 2009

Stockholders should know whether their company is a prosperous and successful one.

  1. Stockholders should know whether their company is a prosperous and successful one. The standard test here is average earnings on invested capital.
  2. If the company is prosperous, the stockholders should insist on a dividend policy which will give them an adequate return on the intrinsic value of their investment.
  3. If the company is not a prosperous one, the stockholders should insist on knowing why.
  • They should try to find out whether the management is competent; if it is not, they should insist on changing it.
  • If the earnings, the dividend returns, and the average market price of their shares are unsatisfactory in relation to the minimum value of the enterprise, they should constantly raise the question as to what changes should be made in policies, in corporate setup, or in the enterprise as a whole, in order to improve the position of the owners of the business.