Wealth maximization is a financial management goal that seeks to increase the monetary value of an asset or portfolio over time. It is the concept of increasing a firms worth to increase the value of stockholders shares. Wealth maximization is also known as net worth maximization, and it requires a companys management team to continually search for the highest possible returns on funds invested in the business while mitigating any associated risk of loss. The most direct evidence of wealth maximization is changes in the price of a companys shares. Wealth maximization is generally a long-term objective, in contrast to profit maximization, which may target short-term earnings.

Wealth maximization is a modern and better approach for corporations to set as their primary objective. It is a strategy that focuses on increasing the value of a firms assets, and it is opposite to profit maximization, which focuses on maximizing profits in the short term by cutting costs and reducing investment in long-term projects. Wealth maximization aims to maximize shareholder value, often reflected in a rising stock price or increased dividends. It accounts for the time value of money, considering the present value of cash flows that an investment will generate in the future.

Wealth maximization has both merits and demerits attached to it. It is a very important factor for every investor before one invests in a company. They bring about happiness by generating good returns to their shareholders, and they tend to invest more in such companies, which may be required for their expansion or growth. However, the concept of wealth maximization has been criticized since it tends to drive a company to take actions that are not always in the best interests of its stakeholders, such as suppliers, employees, and local communities. For example, a company may minimize its investment in safety equipment to save cash, thereby putting workers at risk. Because of these types of issues, senior management may find it necessary to back away from the sole pursuit of wealth.