How can financial management help to maximize their primary focus? ”The principal focus of finance is on decisions and actions which affect the value of the firm.”

Expert Answers
Karyth Cara eNotes educator| Certified Educator

One means to maximize the primary focus is through what is called "The Financing Principle." According to this principle, the primary focus of business through decisions and action is maximized when:

  • the "financing mix" of business capitalization investments is a mix of equity and debt (stock and bond) instruments.
  • the financing mix matches the "nature of the assets being financed." (New York University)