Objectives Of Low and Bonar
A investment is a input of recourses that should bring long term advantages. The nature of a investment may be to Purchase capital goods, be used in production of goods, to replace worn out items and to Invest capital into expenditure likely to yield high return. However a investment does not always bring benefits to the company, it is a risk took by the business that aims to bring in a bigger profit but can also result in a loss.
A investment may require capital in which it may have to use its own assets or take out a loan from a financial institution, some may require other recourses such as materials, training schemes for workers, public relations skills etc. Business decide to invest in certain areas when they set there objectives. If they feel that a area of there business is not doing as well as it possibly could then they may decide to invest in developing it.
Product innovation is the development of new products, it is also the changes in design of established products, or use of new materials or components in manufacture of established products. Anything which is new to a business and its product range is counted as innovation, even if similar products are available elsewhere. Many firms have a high commitment to product innovation as it enables them to diversify, market new products, expand there business and make a larger profit.
This is why many firms invest in product innovation as it can be a small investment to make with a high return as it can be a slight modification to a established product. Capital Equipment is an article of property that is not permanently attached to buildings or grounds and that has an acquisition cost of $2,000 or more (exclusive of sales and/or use tax, freight, and installation) and a life expectancy of one year or more. They are used to make consumer goods. Business demands for capital equipment increase when the demand for the consumer goods that they produce is increasing.
They may also be demanded if capital equipment is worn out or is out of date. A growth sector is a area in a business that is expanding in order to make a bigger profit. This may be due to a increase in demand, improved production facilities, investment from management etc. Growth sectors are often carefully measured to ensure that they produce the best possible results for the business. As a result of this business invest in marketing and production so that they can expand the area to its limit and ensure they will be making a profit.
When sectors grow Business reconsider the prices for they products, they often look at the consumer surplus charts to see how they can maximise there profits. New products are ways in which Business can diversify, expand and become better known. They result in high profits being made in most cases and they help there previous products become better know as the business starts to become widely recognised. New products can raise the prices of shares which helps invest confidence into the business as well as being better credited by financial institutions.
New products can be long term of short term depending upon the market for them. They are often well researched to ensure that they have a good chance of selling and this gives them a idea of there target market and production numbers. There People Our People, a aim by most business is to spend time and money on there staff, workers and other people involved within the business who help run how business operates. They train staff to operate new machinery, improve there skills and gain new qualifications.
They support others involved within the business and ensure that there staff get a small share of the benefits that the company get from high production levels. By using this there are high levels of morale so it is important that business try to achieve this resulting in high production levels and get a good view in the publics eye. By this they can also expect a ‘return favour’ in hard or busy times for the business. Make a profit by achieving low cost production Profit is the amount of money made when the costs are taken away from the revenue in a business in a certain time period.
Low and Bonar aim to keep costs of labour, raw materials, and running costs to a minimum(low cost production). There for they aim to closely control they amount of capital leaving the business. Business make a high revenue if they can sell there goods and services at a higher price than the cost of production. If they succeed in this they should make a profit. Ensure shareholders receive high dividends Ensure shareholders receive high dividends, This means that the business aim to make a large profit so that they can give good returns to there shareholders.
Dividends are paid after the profit has been calculated from the revenue and other costs are withdrawn from this. The profit left over is then divided into the number of shares and designated appropriately depending upon the number of shares held per person. This is a objective set to ensure the future for the company as if mass number of shares are sold then share prices may drop and the result in having a poor credit rating by financial institutions if the business should get into financial trouble. As Low and Bonar are a PLC