The Evaluation of the Investment Opportunity by Analyzing the Financial Structure Influence on Company Value

Abstract

Triggered by the need to make decisions concerning the purchase or investment in new economic entities, with correct and detailed information on their status and economic development conditions, the due diligence process identifies ever better its role and meaning. Knowing the impact generated by the financing strategy on organizational values, as well as the factors that play a role in the process of evaluating the financial structure are essential elements that contribute to the success of such an approach. Based on a sample made up of 60 companies quoted in the Bucharest Stock exchange, this study aims to draw a series of mathematical models that could be used as instruments for the identification and quantification of the influences generated by the financial structure on the companies’ value. At the same time, this study attempts to identify the internal factors, specific to the company, that determine the composition of the financial structure, as well as the sense and intensity of their actions upon financial leverage. This paper introduces in the analysis the influence of specific activity to the indebtedness, reflecting the need for assessing the adequacy of financing strategies based on the activity filed of the enterprises. To obtain the research results, methods of data analysis were used such as: ratios technique, multiple linear regression analysis and linear regression analysis with alternative independent variables, ANCOVA type. Data processing was performed using SPSS 19.00 and AMOS statistical software.