Introduce yourself with the world of finance | Md Mohan Uddin | Skillshare

Introduce yourself with the world of finance

Md Mohan Uddin, Professor of Finance

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5 Lessons (48m)
    • 1. What is Finance

      8:52
    • 2. Financial manager

      11:00
    • 3. Goal of financial manager

      11:19
    • 4. Why profit maximization is not the ultimate goal

      9:51
    • 5. Owners' wealth versus other stakeholders' interests

      6:28

About This Class

Almost everyone has to make financial decisions. Even if one is not a business manager or portfolio manager, s/he must make financial decisions appropriately for his/her personal financial well-being, which necessitates a good introduction with the subject matter of finance.

Every learner of finance should start their lesson by being introduced with the basic definition of finance, goals of financial management, and the areas of financial decision-making.

After completing this course, a learner would be able to define finance, recognize the specific areas of business finance, identify the role, tasks, scope, and challenges of a financial manager, recognize the primary goal of financial decision-making, align the shareholders wealth maximization with other stakeholders interests, compare and choose between profit maximization and share price maximization as the primary goal of financial decision-making, and plan the pathway of learning finance.

This course is suitable for anyone who wish to achieve financial literacy and/or has the interest about the interesting world of finance. More specifically, entrepreneurs, managers and executives who are going to start learning finance, business students who are going to start learning finance, and anyone who has involvement with financial decision-making would be benefitted from this course. This course is also suitable for absolute beginners who have never attended a finance course before, and may continue learning finance at an advanced level in future.

Transcripts

1. What is Finance: Hi. Welcome. What is finance in this lecture? We're going to discuss about the definition off finance and then we'll see the finance from different contexts and also will focus on the areas off business finance And last but not least, we'll try toe discuss how we can waken relate the different areas of finance with balance sheet model of a farm. They start the finance can be defined as the signs and art off managing money. In order to achieve the appropriate objective, you can see that there are two components to important components in the definition one is managing money, therefore, fair finance involved with managing money and the other component is appropriate objective . That means finance involved managing money with an appropriate objective in mind in this course will discuss different aspect off managing money as well as about the appropriate objective. What should be the appropriate objective in your mind when you are managing money, finance is a wide area on It can be. It can be thought in different contexts like from personal context. Godman context our business context from personal context. If you think about finance, it is the management of money for personal objective. For example, if you are thinking about personal finance, perhaps he will. Perhaps he will think about how toe aren't adequate amount of money, how much money to spend and save how much to borrow if necessary. How much money to invest if you have extra and if you want toe, increase their consumption in future, where they where to invest the money when doing, Because the money So these are. These are some examples off questions that you will answer if you are dealing with personal finance. Goldman Context in Government context The finance will be dealing with generating government revenue, for example, by deciding how much to tax public spending. The amount of public spending budgeting, government depth, production, distribution of public goods. And if we think about business, context or finance, then it will be dealing with, For example, in what fixed assets should we invest our money? How to raise money for the investment of the business, how to manage the short term cash flows, how much to reinvest in the business if you want to expand the business. So these are the different context off finance, but now we're going to focus on business finance and learning about business. Final can also help you to understand the finance in other contexts. So what are the areas of business finance? One is capital budgeting, capital budgeting answers in what fixed asset and when our farm should invest. The other related related area is dividend policy. When a form makes profit, the farm will normally distribute the prophet to the owners. But if the From decides to reinvest how much off the profit should be reinvested, so even from reinvest the dividend will below or so these kind of decisions are the area off dividend policy. Then again, the area of capital structure which deals with raising money, how to raise money for the investment. And it also involved deciding when to raise the money from which sources the farm should raise money should it should. The from raise money. More from the owners are more from the creditors and the other area off finances. Working capital management, which is related to the management of short term assets more particularly short term cash flows. So it it involved, for example, cash budgeting, managing off current assets, managing up current liabilities, etcetera. So these at the areas of finance, which can be related with the balance shit off business organization. You know that the balance sheet off a business organization has two sides. The left hand side contains the assets and the right hand side condensed the liabilities and owner's securities. In other words, we can say that liabilities and owner's securities are the sources off fund, because when you are liable to someone, that means you are supposed to say that you have other people's money borrowed from them, and equity is also other people's money. But it is the owners money that you have in your business. Okay, so we can sit at the right hand side of the balance sheet. Actually indicate the sources of money the business organization has, and the left hand side of the balance sheet contains the assets, which are essentially that uses of money, because how do you use the money normally you by different types of assets, So this type of assets are contained in the left hand side, so ah, business organization can have assets on Lee. If the business organization has money in the first place, then the organization then the farm can use the money to buy assets. This is why the sources of money and the uses of money should be equal. And this is why the left inside and the right inside of the balance sheets balance sheet are equal. If we focus on the left hand side of the banish it, we have assets, as this can be classified into two types. Current acid and fixed asset. So the current assets or the assets having shorter lives usually less than one year, for example, cash accounts, receivables and inventories. The other type of asset is the fixed assets, which has longer lives. For example, equipments, missionaries building batons. These assets normally have life more than one year. Now, if we focus on the right hand side, the first thing is current liabilities, which contain the liabilities off the farm that must be repaid within one year period. For example, accounts payable among the long term depths we can give example like corporate bonds are long term boring from the banks. OK, so these are the liabilities that does not have to be repaid within one year, and the owner security are essentially the claims of the owners. OK, maybe it is their investment or maybe the profit generated from their investments for example, common sock or retained earnings. So these are the components off the banish it, and these components can also be related to different areas of finance. For example, the fixed assets are related to capital budgeting because when the farm decide in which assets which long term assets that form should invest, they actually determined the fixed asset component off the business organization. So this is related to capital budgeting now the Long Term Dept and owner security. This part of the balance sheet is related to capital structure decision because either from decide how much to borrow and how much to get from the owner of that is essentially the capital structure up the from now the remaining portion current assets and current liabilities get Both of these two have shorter lives less than one year, one year or less. Okay, so the management off current answers and current liabilities. This is related to the Working Capital Management area off business finance. I hope that you have understood what is finance which areas are within the scope off business finance and also how we can relate the balance sheet off form with the area's off finance. Thank you very much. See your game 2. Financial manager: Welcome again. This'll Lecture is about financial manager, financial managers, manners all financial affairs off the farm. I hope that you have already understood what are the financial affairs off our farm? The financial efforts involved the collection off funds and that uses off fund in other words, raising capital. It realizing it for the best available alternative investment and also some other activities like working capital management, like dividend policy and so on. So these are the financial affairs. So the manager who is responsible okay for for managing all the financial affairs of the farm is called the financial manager. Now what are the costs off Financial manager? Okay, so at first, the task of financial managers related to investment decision. So you can understand that this is about utilizing the fund utilizing the capital in an appropriate manner, or are for appropriate asset for purchasing appropriate asset, not only purchasing a prepared asset timing off, purchasing that all these are related to investment decision. So two examples are evaluating investment alternatives and formulating corporate strategies , so these two are essentially related to utilisation off fund our investment. Another area of the task is related to the financing decision off the farm. So you know that financing decision means how the farm will raise it's necessary capital. So the three examples off tasks related to financing decision are determining the capital structure. How much money should come from the goody, how much money should come from depth and so on, dealing with the security issuing process. You know that when the farm wants to raise capital, the farm may have to issue some securities like shares our, um, our bones. Okay, so the security issuing process should be handled by the financial managers and also arranging other forms of financing. Okay, If any other forms of financing are necessary, then financial manager will also take care of that. After that, we're going to discuss about the task off financial managers related toe working capital management. You know that the working capital management is is the management off current assets and current liabilities? So any task that involved the management off current asset or canon liabilities will will be an Under this area, for example, the financial managers will manage the cash balance of the farm. They will manage the credit. How much credit to extend went to extend on to home to extend that credit and so on, and also management off foreign currencies, eat their farms activity involved in foreign currencies, then managing those foreign currencies is also part of the financial managers task financial manager. Also perform their tasks related to dividend policy. Dividend policy is very important because if the farm distribute distributes all the profit as dividend than the farm will not reinvest their profit, reinvest its profit. Okay, so a dividend policy is a very important decision, which is also made by the financial managers and also for for performing all these tusks. Financial managers should plan and to make a good plan. They should also conduct necessary analysis. Okay, so financial analysts and planning This is also one off the task off a financial manager now in managing the financial affairs of financial manager, plays very important role between the farm between the farm and the financial market. Let us try to understand this role using a figure the financial manager manager performs his or her duty within the farm and the financial market is within, is outside the farms environment, that is, it is that it is in the external environment off the farm. So in financial Man market, we have investors who may invest in our form creditors who may give credit. That means lend money for us. We have financial intermediaries who will help us to get the savers money for, for making a big amount of investment. We have regulators will take care off the soundness of the market, and we have different types of financial securities in the financial market. So financial manager actually helps the farm to get the help of the financial market through various ways, which we're going to discuss now. Okay, so we know that one of the most important task off financial manager is to raise capital. So financial manager normally collect our raise capital from the investors are creditors from the investors or creditors, for example, by issuing shares are by issuing bonds. Okay, so after collecting that fund, financial manager also decide where this fund should be invested, that missing in which assets a shoot the farm, invest this capital. So after that investment is done, the farm continues its operation, and normally we expect that at the end of the farms operation, the acid will generate some return. Okay, and this return are again given back or returned to the investors are creditors if they're the owner in the form of dividends or if they are the creditors in the form of interest payments and principal repayments, we should not forget that financial manager also perform Anna that us, sometimes they do not give all the profits to the shareholders are owners. Rather, they also decide they may also decide to re invest a portion off the profit. But that is also very important financial decision. It helps the farm to grow easily so you can see that the financial manager is really performing a very important role, a very important role between the farm and the financial market. Recently, the task off the financial managers has become more complex and challenging due to two factors. One is the globalization and the other one is the financial crisis that we frequently observed. Let me give you two examples. One example is the financial managers now have to manage higher volume off foreign currencies on Everest because the world is now becoming globalized and and and many of the business organizations they simply cannot avoid their international operation. Okay, so Sometimes they they get their customers in another country and the payment is made in another currency. Okay, so on also, maybe they are collecting their supplies from another country again. They have to pay in other countries. So financial managers also have toe manners. Higher volume off foreign currency. That is one example. Another example is managing greater degree off risk. You know, financial crisis is related to risk. So as a whole, we can say that the the world economy has become more risky. So financial managers should be aware about that about the greater degree off risk. And they should also be very careful in performing their different tests. Now, let us have a look at the position off the financial managers in the corporate organizations. You can see this is this is a typical organization structure, OK, off off, corporate formal organization at different corporation may have different. They may have a variation from this one, but this is just an example. Okay, so from this example, you can see that the first latest look at the bottom. Okay, at the bottom, we can see that we have here. Cash manager, Credit manager. Look, you can Perhaps you can understand that they are. They are involved with working capital management kind of thing. Okay. An investment manager involved with capital budgeting Financial planning manager. Okay. Involved with planning and analysis. Capital raising manager involved with the financing activities, Foreign exchange manager again, apart off the cash manage Mannesmann. But it is foreign exchange foreign currency management. So all off them, all of them are actually doing dealing with the financial efforts off the farm. And they work under the treasurer off the from they work under the treasurer off the from who is responsible for all these things kind of financial affairs. And the treasurer works under the chief financial officer. You can also see that there is another person who is the controller. OK, but remember, basically, controller is responsible with the Financial accounting affairs off the farm. Okay, So this is why we are we can we can say that the finance function is is performed by this whole set off individual managers. Okay. Treasurer and chief financial officer. I hope that he have understood about about the test off a financial manager and also how the financial manager or from in a corporate organization, thank you very much. I hope to see you again. 3. Goal of financial manager: goal off financial management decisions involved choosing among alternatives. If you are making a decision, let's say you have three alternatives. What you are doing is they were analyzing which alternative has what outcome okay, and then selecting the best one. This is the decision making. Now. Different alternatives may lead to the achievement off different goals. This alternative may lead to achieve one goal. The other unrelieved may lead to achieve another goal and the other 1 may lead to achieve a different goal. So it is important which alternative you are choosing, and also whether the alternative is directed toward achieving the right goal or not. So in case of financial decisions, financial decisions must be targeted toward achieving an appropriate goal. An appropriate gold can also help to measure the success of financial management. Let's say we have three alternatives and this is the This is the alternative that you have chosen as a decision maker. OK, so if you have, if you have a particular goal in your mind a killer. So this is the goal in your mind. And for achieving this goal, you have found that these alternative is the best one. Okay, so after you have choosing this alternative, then the people are the party that appointed you as the manager. They can assets whether you could really achieve this goal. ANOC, so keeping an appropriate goal in mind, are setting an appropriate goal before making. The decision is also helpful to assess whether the management is performing well or not. So before we, before we discuss about the most appropriate cool off financial management, let us think about possible alternative goals. One goal can be customer satisfaction that this is a possible well, we'll see later on that ultimately one goal is considered or well accepted as the ultimate as the most appropriate ical. Okay, so before before discussing about that, we can think about what are the possible. For example, as some people might argue that, well, the goal must be customer satisfaction. That is, the decision must be made in a way so that the customers are satisfied. Another alternative can be employee motivation. Okay, That means if this is the goal in the mind off, a financial decision maker than financial decision maker will always choose choose definitional eternity that will result in the highest level of employee motivation cost minimization. This is another example Off a goal. OK, That means if cost minimization is your goal, then you will always make a decision that will result in minimum cost of production profit maximization. Okay, it sounds that very well known goal. So if you're if you think that profit maximization is your goal as a financial decision maker, then he will always make a decision that will result in the maximum profit. And last but not least is the shareholder's wealth makes immolation. This is an other goal. If this is the goal in the mind of the financial manager than financial manager will always choose the alternative that will result in maximum wealth up the shareholders. That means that Warners before we discuss about the most appropriate goal, we need to think about the Warners owner because owners actually appointed the financial manager. Therefore, we must think, What does the owners want? Warners are shareholders delegate the financial decision making to the financial managers who will make the financial decisions so financial managers should act at the best interest off home. Off the shareholders are the owners. A case of shareholders are donors because they are working for the winners. What does the shareholders want? We have to know that probably share. Older school would not mind to be richer. Today will always like to be teacher because this is why they have invested their money. If they invest $100 there will always like their investment to have a higher village. OK, which we call here as they want to be Reacher Sherrod Lawyers also like to consume according to their own preference and time pattern. Okay, for example, let's say the shareholder has additional money on now on this line is representing time. So this is time equals zero. That means now, and let's that they want to consume after one year. That means 20 is a close to one. So if they have a surplus money off 100 they are investing in the company as a shareholder because perhaps after one year they want to consume for $110. They are expecting 10% return on. They think that they will. They can can consume, at least for $110 if they have this in their mind, and shareholders should work for satisfying their need and the third example is that a day want to tolerate risk according to their own risk preference. It is very important. Not all people like to take risk. Some people, like some people, like to take high res. Some people like to avoid risk. Okay, so the shareholders will always preferred toe make use of their invested money at the risk level off their preference. So these are the some examples of what shareholders want. But we should remember that there are different types of people who are becoming the shareholder of the company and different people will have different type of desire. OK, there there wants will also be different. So we can say that the different shareholders may have different objectives off investing in the business. They may have different objectives off investing in the business. So is it possible for the manager to satisfy different object types of different shareholders? No. This is why financial managers should work for work for a common objective that may be acceptable by all shareholders are that may help toe different desires or different ones to be satisfied. So we'll try to find that kind of objective. Okay, So if the financial decision lead to increasing share price. So let us let us think about I think about increasing share price. What happened? If we try to increase the share price and that is what will happen, the shareholder will be reacher shareholder will be richer, nor shareholder will be unhappy to be reacher. Okay. And also they can sell a portion of their shares held according to their personal preference off consumption or risk. For example, if the share price is higher. One shareholder wants to consume only $5 after one year. But the other, Cheryl ER, wants to consume $20 after one year so they can sell a fraction off their share according to their preference off consumption in in year one. You can also eat the shareholders a thing that the investment is made in a very risky project. Okay, then what they can do? They can sell a significant portion off the share up this company and use the money to buy a safer company share or very safe government reserve a bill or something like that. Okay, so So if the manager actually tried to increase the share price that will help, that will help to achieve any objective or any preference off by any shareholder. So what is the ultimate goal of financial management? The ultimate goal should be maximized. The Warners weld are, in other words, maximize the shareholder's wealth. Now how do we measure the shareholder swelled the best measure of shareholders? Well, thes farms share price because this is the this is the direct way off increasing shoulders wealth. If the share price is higher, the Shah ruler can sell the share and get the higher well off their investment. Very simple. So financial managers should make our decision with the goal off, increasing the share price. That means the choose an alternative Onley win. The alternative compare to other alternatives may result in the maximum increase off the share price. So let's say we have three alternatives again. OK, so if choosing this alternative result in decrees off share price by $10. If this alternative resulting increase of the share price by $20 this alternative result in increased off share share prize by $15 then which one is the best alternative? Which alternative shoot the manager Jews or which decision should the manager make they should choose these alternative so that the share price becomes maximum. Ah, good decision will result in the increase up the share price. Should all good decision includes the share price or is it on lee the condition that will increase the share price? No, the answer is no. Why? Because there are many external factors that also influenced the share price. For example, economic condition sentiment up the investors interpretation of the farms decision by the investors. These air some example of external factors that may also influence the share price. Let's say the financial manager has made a good decision, so share price is supposed to increase. But because off one off these external factors, the share price is still may not increase. So how to deal with that? How to deal with that? The answer is, the financial manager should focus on what effect their decision should have on the share price. So the effect that should have on the share price this is this should be kept in their mind . Guess what? They should always think the decision that should have a Boston impact or the maximum increasing in fact, under sharp rise. Thank you 4. Why profit maximization is not the ultimate goal: why profit maximization is not the ultimate goal off financial management. We know that the ultimate goal off financial management is to maximize shareholders. World are the share price, but why not profit maximization? So we're going to discuss why the profit maximization is not the ultimate goal off financial management. In this lecture, you know that profit maximization is a very non thing, and it sounds a reasonable goal. In fact, shareholders will never say that they do not want to see ah higher profit figure off their company. However, profit maximization is not well defined objective for financial decision making. So although each sounds reasonable, but the problem is, it is not well defined, it is not well defined. This is the problem with this cold. So we're going to discuss what are the problems with the goal off profit maximization so that we should rather try to maximize the share price in making financial decisions. One weakness off profit maximization is it considers Onley the return, but not the timing off the return. Okay, so profit maximization does not say when you should get the prophet. That means getting the return earlier is more valuable than getting it letter. This fact is not recognized When we said that our objective is to maximize profit therefore lifts it. We are thinking about profit maximization. We're considering that profit maximization is our goal Now this is time zero. That means now and this is time one. So these gold does not tell us where profit off. What time should we maximize profit off now profit off after one year are the profit of the second year If this is stick, waas too do so This is the This is one of the weaknesses are profit maximization as a call The 2nd 1 we're going to discuss is profit maximization as a goal ignores the effect of reinvestment. We know that when we aren't profit, we can also reinvest the profit for growing our business and generating higher profit in future. So you know that some off the companies choose to distribute the most out of the prophet as dividend again so IV If if even all the profits all the profits is distributed as dividend , then perhaps the company is not trying to grow itself and is not trying to reinvest the profit so future profits profits will not increase as a result of reinvestment. But think about a company that Jews toe cut current dividend and reinvest the most solicitous. This circle is showing you the amount of profit and the company distribute on Lee. A little part the dark part, this part as dividend okay as dividend and invest the remaining profit, reinvest the remaining profit for for the growth of the farm or for for utilizing the investment opportunity. So what will happen for these business? Even though the current profit, our near future profit, will be lower but a distant future profit will be higher. So if you think that profit makes mention is the goal, it is not clear it is not clear whether the first case are the second case will be effort. We know that an appropriate goal is also useful because it can help us to measure the performance off the decision maker. So profit maximization also has weakness. As a measure of performance. For example, profit is not necessarily available to the owners of the farm. Why, because you know that even if we even if we are a lot of profit, even if the farm get a lot of profit, it may not be distributed to the owner right now. It may be distributed in future. It is the decision of the managers, so it is not necessarily available to the owners of the farm. So the owners of the farm may not consider it. Consider it as as a measure of good as a measure off satisfying them because they're not getting it now. Perhaps the preferred to get it now so they will give more credit to the two other from, which distributes the profit now because it satisfies their preference. The 2nd 1 is it is an accounting estimate off performance. So accounting estimate why the accounting estimate can be considered as the weakness in dumps off being a measure of performance because accounting estimate is inference by accounting choices, There are some choices about how you do the accounting, for example, whether you record the inventories based on the current price or past price. First in, first out or last in first out what the precision matter use so simply at the variation off the accounting practices can result in different amount of profit. So you cannot precisely say that this is the major off the performance. The last one in our discussion is the part off. The profit is subject to realization in terms of future Gasol, because a part of the profit men are may not be available to the farm because perhaps it is still in the form off accounts receivable. Profit maximization ignores the cash flow, which should not be ignored. Why? Because this cash flow is the thing that is directly available to be distributed to the owners. So if our farm does not have any cash flow, the farm cannot distribute dividend to the owners even if the Palm wants. But if the farm has cash flow, then the farm is able to distribute. But this is not the case off a case of the Prophet. Even if the farm has profit. The farm minute give it to the shareholders are owners because simply it may not have been collected yet from the customers. And also cash flow is the direct measure off the forms ability to pay, repay and reinvest. So if you have cash on Lee, then you can reinvest if you have cash on Lee than you can repay your depth. If you have cash only Then you can pay your dividends and all this thing or interest payment. So cash flow is very much important, which is ignored when you consider that profit maximization is your primary goal. It also ignored the uncertainty. It also ignored the uncertainty off the prophet Ah from May show the possibility of Arning a maximum profit, but still it may be too risky. So if you think that your goal is to maximize profit and to maximize the profit, if you take too much risk that men would be acceptable to the shareholders, Brother Ah, moderate but not maximum profit may be desirable if it is reliable. So if you consider that profit maximization is the primary goal of the farm okay, then you are also not considering the uncertainty aspect. Therefore, we can say that there are many reasons why profit makes immolation is not the ultimate goal off financial management. The ultimate goal is maximized. Shareholders wealth or, in other words, maximize the share price by making appropriate financial position. Thank you very much. 5. Owners' wealth versus other stakeholders' interests: owners wealth versus other stakeholders. Interests owners are also the stakeholders. But in this lecture we are going toe discuss about other stakeholders. Who are the other stakeholders? That is a very important questions. We know that stockholders are shareholders. Are are one off the stakeholders. But who are the other stakeholders? To define the other stakeholders? We have to know the definition off stakeholder stakeholders at the individuals or entities having their interests linked with the farm's activities. All performance. Okay, so they are economically related to the farms, activities or performance. So if we think about a few examples, it will be clear. Think about the customers. They are economically linked with the activities and performance of the form, how it the from produced good quality products and services. Then the customers become satisfied. They get good value, they get better value. Also think about the employees. Employees are also affected by the activities Are performance of the farm either from perform well increase its size are become renowned company. Rocketdyne employees are benefited in many ways and also suppliers sub with the interest of suppliers is also linked with the farms, activities or performance. Because if the from pay the dues in time. Then suppliers suppliers are benefited. If the farms do not pay the accounts payables than the sub suppliers will suffer. So this is how the interest of customers, employees and suppliers are linked with the activities or performance of the company. So shareholders are also the address of shareholders are also linked with the performance or activities off the company. We can give some more examples like even the community. Even the community who stays near the plant of the farm are nearby the farm. They are also affected by the activities after off the from so stakeholders are anyone are any entity that are affected by the activities? Are the performance off the from? So the point of discussion in this lecture is Should we only think about only one stakeholders interest? That means the shareholders just because they're the owner and should we ignore all other stakeholders interest? So this is a very important question. OK, so let us think about that. The question here is should the financial manager maximize shareholders wealth at the expense off other stakeholders interests? To answer this question, I will ask another question. Is it possible to maximize shareholder swelled by ignoring the interests of the other stakeholders because we know that other stakeholders are linked with the activities and performance of the company. So perhaps if their interest is not satisfied, they will respond to the company in a different way. So should it be supportive to maximising shareholders wealth? So let us think about this question. Share price depends on future dividends, you know, because if a company pays higher dividend future, the share price will be higher because there will be higher demand for the shares of the company in the stock market. Okay, so a company can pay high dividend on Lee if the company has high profit. So we can say in a word that higher profitability is associated with higher future dividends. So latest think about some situation, okay about linking with the customers employs and the suppliers as three examples. Is it possible that our farm would be profitable if the customers are not satisfied? Is it possible that our farm will be profitable if the employees are de motivated? Is it possible that our farm will be profitable without having a good and long term relationship with the suppliers. You know that the answer answer for all of these three questions is simply no, because ive the customers ive the customers are not satisfied. They're not going to buy your product by the production here from our services off your farm. So how can you generate revenue and how can you aren't profit? And how can you be hired evident? And how can the share price will be maximized if the employees are not motivated? Then again, what happened? Your company become inefficient. Okay, So again, it cannot help you to maximize shareholder wealth. And again, if you do not have good and long term relationship with the suppliers, your production cost is going to increase, which again will reduce your profitability. Therefore, we can say that the managers must satisfy other stakeholders, must satisfy other stakeholders in order to maximize the shareholder's wealth. So, shareholders, well, in this case is the primary goal. Okay, So achieved this primary goal. You should not also just forget he should not forget about other stakeholders Interest. Thank you very much.