THEORETICAL ANALYSIS OF BUSINESS VALUE ADDED VALUATION MODELS

Abstract

The purpose of this study is to conduct a theoretical analysis of scientific models of business value added management, based on the estimated indicators of evaluation in the current unstable conditions of economic activity. In addition, among the objectives of the study was an analysis of the reasons and preconditions for the owners and stakeholders to assess the value of the business, identified the components, effective management of which will increase its value and capitalization. The focus is on management models such as economic value added, market value added, shareholder value added and value added cash flow. It is established that each of the indicators used in the model has its own characteristics, which are its advantages and disadvantages. For example, it was found that the indicator economic value added is the most used among all indicators due to the availability of analytical data, taking into account many aspects of the enterprise, which provides stakeholders with the necessary amount of information for decision-making. At the same time, its calculation requires performers of high analytical accuracy and meticulousness. In addition, this model is similar to the joint-stock management model. Both focus primarily on foreign economic, market factors influencing asset value and investment attractiveness among potential investors. It was found that the value-added model of cash flow allows to better understand, based on finding the net cash flow, the initial value of net assets and the weighted average rate of capital financing, how cash flow from investments exceeds the cost of attracting them, informing owners, shareholders and others liquidity of the business and prospects for its value growth. Therefore, a conclusion is made on further research on improvement, unification of existing management models in conditions of instability.