The new role of the going concern concept in corporate finance management

• Authors: Gintaras Černius
• Languages of publication: EN

Abstracts

EN

This paper tackles different issues related to the development of the system of the objectives of a company's financial management that also includes its sustainability. Prior to the recent financial crisis the formulation of the corporate finance management objective focused only on the company’s finances that were reported and measured using the company's profit and its worth growth ratios. The financial crisis has highlighted an additional aspect in corporate management, i.e., a need for the company, as an object of the owners' investment, to generate the economic benefit for a prolonged period of time. For the purpose of formulation of the corporate financial management objective it is appropriate to refer not to a single objective or a set of same-level objectives; a much more expedient approach is a creation of the so-called objective tree integrating the requirements of the entity's going concern. The present article analyses certain factors affecting the financial performance of a company, discusses different ratios facilitating the quantitative effect of the factors upon the final results, and practically applies the management by interference model with a view to ensuring the operations of the company for a sufficiently long time.

Keywords

EN

corporate finance; management objective; going concern

Discipline

• ECONOMICS: ECONOMICS

• Publisher: Prague Development Center, Czech Republic
• Journal: Perspectives of Innovations, Economics and Business
• Year: 2012
• Volume: 12
• Issue: 3
• Pages: 76-85

Dates

published

2012-11-23

Contributors

author

Gintaras Černius

• Faculty of Economics and Finance Management, Mykolas Romeris University, Lithuania

• Prague Development Center, Czech Republic

References

• Brigham, E., Ehrhardt, M., 2008. Financial management: Theory and practice, Mason, OH: South-Western Cengage learning
• Brooks, R., 2010. Financial management: Core concepts, Upper Saddle River (N.J.): Pearson education
• Callan, S., Thomas, J., 2011. “Executive compensation, corporate social responsibility, and corporate financial performance: A multi-equation framework,” Corporate responsibility and environmental management, Vol.18(6), pp.332-51
• Capon, C., 2008. Understanding strategic management, Harlow: Pearson: Prentice Hall
• Chalmeta, R., Palomero, S., 2010. “Methodological proposal for business sustainability management by means of the Balanced Scorecard,”Journal of the operational research society, Vol.62(7), pp.1344-356
• Conyon, M., Judge, W., Useem, M., 2011. “Corporate Governance and the 2008-09 Financial Crisis,” Corporate governance-an international review, Vol.19, pp.399-404
• Černius, G., 2011. “Problems of management of different types of investments and evaluation of their performance,” Journal of international sientific publication: Economy & business, Vol.5(1), pp.383-95
• De Bussy, N., Suprawan, L., 2012. “Most valuable stakeholders: The impact of employee orientation on corporate financial performance,” Public Relations Review, Vol.38(2), pp.280-87
• Dutta, S., Lawson, R., Marcinko, D., 2012. “Paradigms for sustainable development: Implications of management theory,” Corporate social responsibility and environmental management, Vol.19(1), pp.1-10
• Kalčinskas, G., Černius, G., 1997. Financial and management accounting [Finansinė ir menedžmento apskaita], in Polish, (Vol. 1), Vilnius, Pačiolis
• Kanter, R., 2011. “How great companies think differently,” Harvard business review, Vol.98(11), pp.66-95
• Pearce, J., Robinson, R., 2009. Strategic management: Formulation implementation and control, Boston (Mass.); New York (N.Y.), McGraw-Hill / Irwin.
• Ross, S., Westerfield, R., Jaffe, J., Jordan, B., 2009. Corporate finance: Core principles & applications, Boston (Mass.): McGraw-Hill / Irwin.
• Verninmen, P., Quiry, P., Le Fur, Y., Dallochio, M., Salvi, A., 2011. Corporate finannce. Theory and practice, UK: Chichester, John Wiley & sons

Identifiers

DOI

http://dx.doi.org/10.15208/pieb.2012.18