Long Term Goals Analysis

Establishing long term goals is vital for any corporation either large or small. By establishing long-term goals, the corporations will be able to help all stakeholders and members of the corporation acknowledge and understand the long-term vision of where the corporation seeks to be. Examples of long-term goals for any corporation should include dividend growth, increase in profits, an increase in returns on invested capital, a more diversified revenue base, earning per share (EPS), and increasing cash flow. In this assignment, I will further explain the importance of financial planning for a corporation. While explaining the importance of financial planning, I will be using Nike, Inc. as an example of how a corporation can benefit from financial
Establishing long-term financial goals will give employees something of significance to work towards. After achieving a major milestone as a company, the employees will have a sense of accomplishment knowing that they played an intricate part in making it possible. Also, the established long-term financial goals will help to inform the shareholders the direction that the company is heading. When Nike announced that the company is aiming to increase to $50 billion in revenues, increase dividends payout ratio to 25%-35%, and increase ecommerce revenue from $1 billion to $7 billion, the company help to reassure to the stakeholders that management is constantly looking for ways to improve the company and has the stakeholders best interest in
When Nike establishes long-term goals, the company is really measuring the success of the company. Long-term financial goals such as generating $50 billion in revenue, increasing e-commerce revenue to $7 billion, and increasing women’s apparel revenue to $11 billion by 2020 means that Nike is planning on achieving a major amount of success. (Olundp, 2016) Nike will not be upset if the goal is not accomplished if the company gets close to the goal. Generating $48 billion in revenue, increasing e-commerce revenue to $6 billion, and increasing women’s apparel revenue to $10 billion by 2020 means that the strategic plans the company has in place is working and that Nike is moving in the right direction. In general management can be satisfied knowing that the employees really tried and gave there all and the shareholders can be satisfied knowing that the company is growing stronger. In conclusion, establishing long-term financial goals are vital to any corporation regardless of the size of the corporation. Establishing long-term financial goals can provide several benefits for the corporation. Reducing the amount of risk the company will be exposed to, provide direction and motivation, eliminate distractions, and measure success are just a few examples of the benefits a corporation can receive by establishing long-term financial