Principles of Finance: Aveo Investment, CSR and Share Price

This report delves into the financial performance of Aveo, exploring its share price fluctuations, corporate social responsibility (CSR) initiatives, and the impact of financial decisions on sustainability and business ethics. The analysis covers Aveo's organizational goals, including profitability, market share, productivity, and social responsibility, alongside a review of its share price history and the causes behind its volatility. The report emphasizes the importance of CSR, ethical business practices, and transparency in maintaining stakeholder confidence. Recommendations are provided to improve Aveo's investment potential, focusing on the integration of ethical considerations and good corporate governance to enhance investor trust and long-term sustainability. The report also examines the role of financial social responsibility (RSF) and its impact on a company's financial position, concluding that Aveo needs to prioritize transparency and ethical conduct to regain customer trust and ensure its financial success.

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Principles of Finance
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Contents
Introduction.................................................................................................................................................3
impact of financial decisions on sustainability and social responsibility.....................................................4
Business Ethics............................................................................................................................................4
Corporate Social Responsibility..................................................................................................................5
Aveo as an investment. Considerations and recommendations....................................................................6
Recommendations...................................................................................................................................7
Share price history for the past 2 years........................................................................................................8
Causes of fluctuations in the share price and the volumes traded................................................................9
Conclusions.................................................................................................................................................9
References.................................................................................................................................................11

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Introduction
The goal of this paper is to bring to light the ramifications of their financial decisions, the
corporate goals and recommendations. The purpose of this paper is to find out the importance of
CSR to AVEO and why its share price has been fluctuating for the last two years (Allouche,
2006). The sources used in this paper are the company’s website, newspaper articles relating to
the company and books that give insight to the topic. The conclusion suggests that the company
share price has been fluctuating as a result of bad public image. It is also important to that the
company engaged in CSR activities (Berk and DeMarzo, n.d.).
We start from the conviction that the activity of the company must not only serve its own
profitability objectives, but must also consider the impact of its activities in the environmental
and social environment, supply chain, distribution, communities , etc. The company is a social
agent that plays a relevant role in the environment where it operates. The strategy of a company
that wants to be sustainable seeks lasting relationships of trust and reciprocal commitment to the
agents involved in its activity or affected by it-stakeholders or not-and it does not only pursue
economic and financial profitability - fulfill the expectations of the investors or shareholders
(Cassedy, 2004). Confidence between managers, shareholders, employees, customers and
suppliers is an intangible asset that generates positive synergies and adds value to the company.
This is in line with other ethical principles guiding the business such as Trustworthiness, respect,
fairness, caring and citizen ship.
Social responsibility must be an integral part of a company's business strategy; so that it is not
reduced to isolated actions of different departments but, based on the conviction of management,
permeate the culture of the entire organization and integrate into different strategies, practices

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and management systems. It must have tools to assess the level of compliance with sustainability
commitments and must report on the results of its internal and external management -
transparency. Internal communication and dialogue with stakeholders will help redefine
sustainability objectives and foster innovation and continuous improvement (Corporate Social
Responsibility, Corporate Restructuring and Firm's Performance, 2010).
impact of financial decisions on sustainability and social responsibility
Aveo’s organizational goals are as follows; One, is profitability, the company seeks to increase
its profitability. Second, is to increase its market share, third, is to improve its productivity and
lastly is to be socially responsible.
Aveo should invest in mending the relationships with its customers, in addition to pursuing
profitability and applying the traditional investment criteria, meet environmental, social and
good governance criteria, to improve sustainability (Dalton, 2013). They are the ethical funds-
investment in companies that fulfill requirements related to corporate social responsibility- and
solidary investment funds -funding of social or development projects and microcredit. However,
it is not right the company treats the vulnerable in a wrong manner and expect the profits to rise.
Its products are not conditioned solely by criteria of speculation in the financial markets, nor do
they seek only the maximum profit (Shaw, 2017).
Business Ethics
Transparency is also a fundamental tool to maintain credibility and trust in ethical business. In
fact, they offer broad access to information on beneficiary projects. The shareholder activism or

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active participation in the meetings of shareholders of companies, to maintain a dialogue with the
management team in order to improve the ethical practices of the company.
Corporate Social Responsibility
When we talk about Corporate Social Responsibility (CSR ) and Socially Responsible
Investment (SRI), why not also talk about Financial Social Responsibility (RSF)?Financial
Social Responsibility (RSF) refers to the financial activity carried out by the company. This have
an effect on the financial position of the company.
The strict regulation and supervision that the company has is a normative institutionalization of
the interests of two essential groups: the clients and the society. Despite this, there have been
failures that have led to the crisis of the sector along with its current process of restructuring,
adding the challenge of developing a satisfactory CSR.
Given this situation arise the following research questions: what is understood in companies by
CSR? Is it necessary, in the opinion of the participants, for business success? Are your
companies socially responsible? What CSR actions do they carry out? Do companies get benefits
for being socially responsible? Does your situation improve a company that adopts practices and
actions of CSR? The objectives of the present work are to identify if the managers of the
companies recognize the necessity of the CSR; verify what they understand by this concept and
whether they are aware of the importance of incorporating CSR actions in their organizations and
the benefits that can bring them. It was also investigated whether the interviewees know
companies that are, in their opinion, successful and socially responsible at the same time.

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Besides the financial management and the fulfillment of its own objectives of financial
profitability -expectations of the shareholders- and of solvency - closing the outstanding debts -,
take into account the impact of their activities, in this case financial, in the short and long term,
in the social environment, in the supply chain. The company as a social agent also seeks lasting
relationships of trust and reciprocal commitment with the agents affected by its financial activity:
managers, shareholders, employees, clients, suppliers, financing entities or companies, etc. With
respect to the environmental impact, Aveo can consider as an expense the liability requirements
in this regard. However, they have to see that responsible environmental management can bring
opportunities to generate value, such as greater ease in finding financing.
Aveo as an investment. Considerations and recommendations
Aveo as an investment is a highly profitable business and has shares that are worth a lot. As a
pharmaceutical company, the share price has taken in a hit after it was accused of ripping of off
their customers. Most of their customers are the elderly and the vulnerable and so the public has
lost confidence due to the perceived evidence of rip off.An Aveo investment is running down the
drain. This is because people are not willing to invest in the share anymore. Sometimes corporate
governance dictates that the investor will always refrain from investing in a company that has
malpractices and treats its customers unfairly.
In June 2014, the introduction of the share trades at between $1.99 and $2.3o. it however
fluctuates between the two price figures. It has the highest trading price of $3.65 between April
and November 2016.

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Recommendations
It is recommended that for the share price to be at its best or trade at its highest, Aveo must act
at its best. The corporate management practice must be withheld to the latter and all rules,
principles and practices of good corporate governance must be affected (Financial performance,
2013). This is only for ensuring that the investors have maximum confidence in the management,
board and running of day to day activities of the company. It is true to say that any negative
practice will affect the company’s share negatively. The Aveo share will fluctuate depending on
the type of information that is released out there in the market. It may either affect the company’s
share positively or negatively (Gitman and Zutter, 2015).As in many cases, addressing the
negative definition of CSR helps to better understand the true meaning of the concept and avoid
terminological confusion that is common in CSR of the company.With this aim, we will briefly
comment on some concepts that are related to CSR but which are not CSR.Social action is a
complement to CSR practices and can never replace them. A company can be socially
responsible without doing social action and can be irresponsible even if it allocates large
amounts of money to social action (Haerens and Zott, 2014). Social action is, the icing on the
cake, the culmination of a whole series of good business practices.
Sustainable development. Idea born at the Rio summit in 1992 and that advocates harmonious
development in the economic, social and environmental fields so that current development does
not limit the development possibilities of future generations.
The Club of Excellence in Sustainability defines sustainable development as one that, based on
continued economic growth, contributes to social development and the proper use of the natural

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environment, making it possible to increase the value of companies for all interested parties.
spectacular development of CSR, the growing interest in these issues and the implementation of
sustainable management in companies originates in a series of causes that have driven this
phenomenon (MORRISON, 2016). Some of the main reasons that strengthen the development of
CSR are: The ethical origin of the RSCT has traditionally been thought that the world of the
company was independent of the moral sphere and that the economic rules were different from
the moral ones: "businesses are business". However, the stakeholders of the company have
broken with this dissociation and require the company to make the economic benefits compatible
with conduct based on strong ethical values (Financial management, 2014).
Share price history for the past 2 years
In June 2014, the introduction of the share trades at between $1.99 and $2.3o. it however
fluctuates between the two price figures. It has the highest trading price of $3.65 between April
and November 2016 (Manos and Derori, 2016). This may be because the company share has just
been introduced for trading and its still weak before it can become better. In August 2015, the
company share price was valued at slightly above $2.8 as it continues to strengthen. In April
2016, the company’s share continues to trade in a bullish way at $ 3.2 which is a good sign for
investor confidence in the company (MORRISON, 2016). Between this period and November
2016, the company trades at its highest recording an incredible $3.65 but starts to plummet after
that. By June 16th 2017, the company’s share has plummeted to a low of $ 2.8 and its still

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plummeting. This is because of the news that the company is treating its customers with
contempt and neglecting the vulnerable.
Causes of fluctuations in the share price and the volumes traded
The effect of changes in share prices on investment project decisions in terms of delays,
cancellations and successful terms is analyzed. In particular, legit and duration models are used
to study a database of investment projects classified by economic sectors (Financial
performance, 2013). The analysis framework is the model of real options where commodity
prices are used as a variable associated with future income while price volatility is associated
with uncertainty about such income (Penning, 2012). Share fluctuates due to market forces,
political environment, competing shares in the same industry and internal operations of the
company.The series of scandals derived from bad business practices that have jumped public
opinion and caused great losses to small investors have been a trigger to require companies to
conduct appropriate behavior to regain confidence in them and in the rules of the market.A clear
example of stakeholder pressure is the activism of shareholders or the demands of employees
(Perrini, Pogutz and Tencati, 2006). Increasingly, shareholders make their decisions taking into
account, in addition to the financial results of companies, their performance in the social and
environmental fields. In addition, this trend is strengthened by the leading role these issues are
having in the General Shareholders Meetings.
Conclusions

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Aveo has to make its internal business ethics and practices very open and transparent in order to
regain the customer’s confidence (Perrini, Pogutz and Tencati, 2006).Ethics does not question
profitability but how companies earn their profits . In short, also in the world of business, the
principle "the end does not justify the means" applies. This growing ethical reflection on the
performance of companies and their management has strongly fueled CSR (Schreck,
2009).Investors have preferred to leave their assets quiet and wait for the days of crisis to pass.
This can be evidenced in the decrease in the volume of trading in the market. It is only good
ethics and corporate social responsibility that can positively affect the company’s performance in
terms of share prices and possibly its profitability.

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References
Allouche, J. (2006). Corporate social responsibility. Basingstoke [England]: Palgrave
Macmillan.
Cassedy, P. (2004). Finance. San Diego, Calif.: Lucent Books.
Corporate Social Responsibility, Corporate Restructuring and Firm's Performance. (2010).
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Dalton, H. (2013). Principles of Public Finance. Hoboken: Taylor and Francis.
Financial management. (2014). London: BPP Learning Media Ltd.
Financial performance. (2013). Québec, Québec: Investissement Québec.
Gitman, L. and Zutter, C. (2015). Principles of managerial finance. Boston: Pearson.
Haerens, M. and Zott, L. (2014). Corporate social responsibility. Detroit: Greenhaven Press.
Manos, R. and Derori, I. (2016). Corporate responsibility. Basingstoke, Hampshire: Palgrave
Macmillan.
MORRISON, M. (2016). PRINCIPLES OF PROJECT FINANCE. [Place of publication not
identified]: ROUTLEDGE.
Pandey, I. (2015). Financial management. New Delhi: Vikas Publishing House PVT LTD.
Penning, A. (2010). Financial performance workbook. Worcester: Osborne Books.

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Perrini, F., Pogutz, S. and Tencati, A. (2006). Developing corporate social responsibility.
Cheltenham, England: Edward Elgar.
Schreck, P. (2009). The business case for corporate social responsibility. Heidelberg: Physica-
Verlag.
Shaw, W. (2017). Business ethics. Boston, MA: Cengage Learning.