Enterprise Value Management Research Articles

SOCIALLY RESPONSIBLE PRACTICES IMPLEMENTATION IN THE ENTERPRISE VALUE MANAGEMENT TAKING STAKEHOLDERS' INTERESTS

Building an enterprise value management system requires analyzing and evaluating results of this system, as well as the programs and projects carried out within the framework of Sustainable Development Goals (SDGs). Current assessment tools are mostly based on comparing actual and target values of each sustainable development goal. In practice, to improve the existing developments regarding the evaluation results of SDGs implementation, an author substantiates legal and methodological approach to assessing the implementation status within SDGs implementation, involving diagnostics based on the value creation stages, including the criteria of efficiency, compliance to the interests of stakeholders and their benefits.

Enterprise value management: directions, key factors and growth tools

Methods. The theoretical and methodological basis of scientific research was the work of scientists on the assessment and management of enterprise value. The main results are obtained through the use of general scientific and special methods, namely: theoretical generalization – during the study of the enterprise cost management process; analysis and synthesis – to substantiate the company’s cost management directions; a systematic approach – in the formation of key factors contributing to the increase in value and determining the tools that can be used to achieve this goal. Results. The results of the study shed light on issues related to the areas of enterprise cost management. The application of various approaches, namely: financial, economic and strategic approaches to determining the value of the enterprise by scientists is revealed. The main factors that affect the increase in the value of the enterprise are highlighted: increasing profitability, optimizing the capital structure and increasing the efficiency of operations. Novelty. The study points to the importance of combining different business valuation methods to obtain more accurate and comprehensive results. This allows better understanding of the current state of the enterprise and developing more effective cost management strategies. It has been proven that cost management becomes a tool that helps enterprises to effectively respond to changes in the international business environment and use new opportunities for development. Practical value. The results of the research can be useful for business entities and investors. They can use the recommendations and tools provided in the article to improve the cost management of their enterprises, increase their competitiveness and attractiveness to potential investors.

ПОДАТКОВА ОПТИМІЗАЦІЯ У РАМКАХ ФОРМУВАННЯ ФІНАНСОВОЇ СТРАТЕГІЇ СТАЛОГО РОЗВИТКУ ПІДПРИЄМСТВА

Methodological provisions and practical recommendations regarding the formation of a financial strategy for the sustainable development of the enterprise, including through the optimization of taxation and the growth of business value in a strategic perspective, were further developed in the article. Correspondence and differences between the categories of "financial and economic stability", "potential for financial and economic stability" and "financial balance" were considered, which made it possible to identify the system capabilities of the enterprise to form and distribute resource flows with the greatest economic benefit and minimal risk. Formulated approaches to determining the main parameters of enterprise value management, which involve determining the possibilities and limits of its growth, qualitative requirements for the choice of capital structure and limits of financial stability. A conceptual model for the formation of a financial strategy for the sustainable development of an enterprise is proposed, the main blocks of which include the positioning of long-term economic prospects, the diagnosis of its current state and the amount of resource potential in the future, optimization of the capital structure, planning of financial activities, etc. As part of strategic financial planning, an approach to simulation modeling of tax payments is proposed, the results of which will allow determining the directions of maximizing net cash flows, minimizing the outflow of financial resources, reducing the tax burden with the aim of increasing the value of the enterprise in the future. The expediency of using tax optimization tools in the process of forming and implementing a financial strategy for the sustainable development of an enterprise, which has a multi-operational economic nature and includes the choice of the method of amortization of fixed assets, variable forms of asset acquisition, rational pricing, various types of financial preferences, methods of rationalizing tax accounting, is indicated. Conclusions were made regarding the formation of an adaptive mechanism of the financial strategy of the enterprises sustainable development as a tool for increasing the efficiency of financial management.

Theoretical foundations of enterprise value management

Theoretical foundations of enterprise value management

Strategic management of enterprise value in the conditions of innovative development

Methods. When conducting a study of strategic enterprise cost management under innovative development, the method of scientific abstraction was used – in determining theoretical and methodological approaches regarding the essence of the concept of «enterprise cost management»; system approach – in the formation of a methodical approach to comprehensive assessment of the effectiveness of enterprise cost management. Results. It has been demonstrated that the new management paradigm, which is based on a strategic approach, has led to a change in the goals and criteria of the company's activity, namely: the criteria for the success of the its activity and the basis for determining its mission are the cost, which allows for a quantitative assessment of both strategic goals and the level of their implementation. It was found that despite the presence of a wide arsenal of methods for estimating the value of an enterprise, none of them take into account its specificity, as well as the factors that shape the value. Work was carried out on the formation of an applied methodical approach to strategic management of enterprise value. Novelty. A methodical approach to strategic management of enterprise value is proposed, which is based on a comprehensive approach to estimating its value and is characterized by ease of application. The developed approach is universal for any enterprise and ensures consistency in the implementation of principles and methods. It takes into account all stages of strategic management of the enterprise's value, as well as other criteria, in particular, the volume of production, profit. Practical value. The obtained results of the scientific research proved the need to develop a comprehensive assessment of the value of the enterprise under innovative strategic management in order to diagnose the state, trends and determine the factors that contribute to the growth of its value and potential. Since the main component of the increase in the value of equity capital is the steady rate of growth of profitability and the amount of cash flow, the main attention is focused on indicators of profitability. Accordingly, the cost is a key point of the strategic management system of the enterprise and is used both for the formation of its specific goals and objectives, and serves as a criterion for evaluating the success of strategy implementation.

ОБЛІКОВО-АНАЛІТИЧНІ ТЕХНОЛОГІЇ ФОРМАЛІЗАЦІЇ ЦІННОСТІ ПІДПРИЄМСТВА В УМОВАХ ДІДЖИТАЛІЗАЦІЇ

The article is devoted to the search for ways to increase the effectiveness of accounting and analytical technologies for the formalization of enterprise value in conditions of digitalization. It is substantiated that the transformation of today's value priorities and the dynamic development of information technologies require a rethinking of approaches to assessing the effectiveness of enterprise activity. The purpose of the article is to improve the accounting and analytical technologies of the formalization of the value of the enterprise in the conditions of digitalization. To achieve the goal, the following research methods were used: analysis, synthesis, comparison, logical generalization. A detailed analysis of accounting and analytical computer programs made it possible to improve their classification. A new classification feature "suitability for digitalization of accounting and analytical support for enterprise value management" is proposed. According to this characteristic, three groups of software products are distinguished: 1) those that have the possibility of comprehensive digitalization of accounting and analytical support for enterprise value management; 2) those that have the possibility of partial digitization of the accounting and analytical support for enterprise value management; 3) those that do not have the possibility of digitization of the accounting and analytical support of enterprise value management. In order to formalize the value of the enterprise for various stakeholders, a conceptual model of accounting and analytical support for managing the value of the enterprise has been developed. Proposed practical recommendations for improving the technology of automating the formalization of indicators for each of the blocks of the conceptual model of accounting and analytical support for enterprise value management (the basic algorithm of the technology is based on the Pareto principle). The implementation of the proposed automation technology for the formalization of indicators for each of the blocks of the conceptual model of accounting and analytical support for enterprise value management on the basis of modern ERP programs will create the prerequisites for the effective digitization of accounting and analytical support for enterprise value management. The practical value of the article is realized through the creation of scientific prerequisites for optimizing the modular structure of accounting and analytical software.

Analyzing the Impact of Corporate Governance Factors on Enterprise Value and Capitalization

Subject. The article focuses on business valuation methods and factors with reference to corporate governance principles. Objectives. I analyze how corporate governance factors influence the value and capitalization of public joint-stock companies, and make my suggestions concerning financial and administrative decisions in line with value-based management. Methods. The study is based on methods of synthesis, deduction, induction, statistical analysis, comparison and generalization. Results. Having analyzed the impact of such factors, as revenue, dividends paid, return on sale and equity, for an 11-year life span (2009–2019), on capitalization and value of the population made up of 20 Russian public joint-stock companies from four sectors, as classified by the number of owners and State interest, I figured out that capitalization enterprise value in Russia most of all depend on indicators of companies if it has 11 owners and more (71%), companies without the State interest (67%). As for basic factors, these are revenue and dividend policy that have the strongest effect on enterprise value, while capitalization depends on all the analyzable factors. Conclusions and Relevance. Currently, business valuation and business valuation management are critical for making correct strategic administrative decision. Doing so, the appraiser shall not only measure enterprise value with available financial results, but also consider its various non-financial indicators, which inter alia include corporate governance. Based on corporate governance principles set forth in the Letter of the Bank of Russia, I pointed out that definitely influence the enterprise value. Based on the above analysis, I determined what best results the Russian public joint-stock companies can attain in their corporate governance by sector, the number and quality of owners. Following the findings, I suggest how financial and administrative decisions on enterprise value management should be made, in line with the value-based management principles.

Enterprise value management based on the stakeholder approach

The need to ensure the growth of enterprise value in the context of strengthening intangible factors’ role in its formation and maintaining sustainable development of society requires the introduction of new value-oriented management models, taking into account the interests of a wide range of stakeholders.The paper aimed to develop an approach to enterprise value management based on the stakeholder approach. Based on the presented conceptual vision of the enterprise as an SRPR system (stakeholders-resources-processes-results), a two-level system of SRPR value indicators for the main stakeholder groups has been developed, as well as an integral indicator of sustainable economic value added (EVA), which allows assessing the potential growth of enterprise value through a sustainable network of stakeholders. The possibility of using SRPR indicators in the process of planning activities has been substantiated: a model for maximizing EVA is formulated subject to a number of restrictions reflecting the standards of relationships with stakeholders, its transformation into a matrix of SRPR indicators.The results of approbation of the proposed approach by questioning processing and wholesale trade enterprises in the B2B segment are presented, confirming the compliance of the proposed system of indicators with the interests of stakeholders and implementation at Europroject Ukraine LLC, which proved its practical value.The need for further empirical studies of the dependence of EVA on changes in indicators of satisfaction of stakeholders’ interests is emphasized.

Research on Enterprise Value Management of Emerging Industries in the Age of Artificial Intelligence

The arrival of the era of artificial intelligence is both an opportunity and a challenge, and the main research of artificial intelligence enterprises, belongs to the emerging industry, it is very different from the traditional industry. How to measure its enterprise value, has become a controversial issue. This article from the artificial intelligence industry analysis, combined with its particularity, through comparative analysis of all kinds of enterprise valuation method, choose the real options method to measure the value of the company, applying Schwartz - Moon model combined with Monte Carlo simulation to evaluate the enterprise value of Robots(300024), find out the reasonable artificial intelligence class enterprise value evaluation model, and gives the corresponding Suggestions, helps to guide the orderly development of the industry, promote the development of artificial intelligence and innovation.

Information and communication support of project management processes and enterprise value

The primary task for Ukrainian business at the present stage of it development is the development and implementation of effective mechanisms to improve the welfare of owners, which can be achieved through the management of investment projects. The realization of the outlined tasks depends on the investments that owners and investors are ready to invest in the development of business entities. The urgency of the issue of information and communication support of project management processes and the value of the enterprise is amplified in the context of the spread of information technology in all areas of enterprise activity. The place of information and communication support in the process of managing the value of the enterprise and projects is specified. Modeling of the business process of enterprise value management is carried out. The tools for improving the efficiency of enterprise project management taking into account project constraints are systematized. The expediency of using information and communication support of project and project management processes for the development and implementation of enterprise cost management strategy is proved. The study results allow combining the approaches to enterprise value and project management based on the use of modern information and communication software, which satisfies the requirements of modern times and modern market economy, oriented towards implementing the innovative instruments of business entities’ financial management.

Research on the Effect of Internal Control Effectiveness on Enterprise Value—Based on Empirical Data from the Real Estate Iindustry

In recent years, internal control plays an increasingly important role in the development of the enterprise. In addition, the value management is a kind of new enterprise management mode of creating value for the target, highlighting the core status of enterprise value management idea and promoting the enterprise value has been increased. The paper is based on the Shanghai and Shenzhen main board listed companies, and it analyzes the present situation and problems of internal control about them. Then, this paper regards the internal control the effectiveness of the comprehensive index as explanatory variables and regards enterprise value as the explained variable and regards company size and ownership concentration as control variables. At first, the paper finds the comprehensive score of the internal control’s effectiveness by factor analysis. Second, it uses regression analysis of enterprise value by coupling with other variables.In the end,the impact of the effectiveness of internal control on enterprise value is positive.

СТОИМОСТНОЕ МЫШЛЕНИЕ В ПРОЦЕССЕ УПРАВЛЕНИЯ СТОИМОСТЬЮ ПРЕДПРИЯТИЯ

The article explores the concept of cost thinking based on methodological approaches developed in the domestic and foreign literature; the process of enterprise value management is analyzed in the article.

Combined Approach to Human Capital Assessment at a Trading Enterprise

The presented study examines human capital and methods of its assessment at the micro-level of the economic system, in the activities of trading enterprises.Aim. The study aims to substantiate a methodological approach to the assessment and prediction of the human capital of a trading enterprise using the concept of enterprise value management.Tasks. The authors determine the importance of human capital for the efficiency of managing a trading enterprise, explore the essence of human capital and specific aspects of its analysis at the micro-level of the economic system, and propose a combined method for assessing and predicting human capital indicators at an enterprise.Methods. This study uses the methods of institutional and structural analysis, assessment of investment projects, systems analysis, enterprise value management, and specific methods of human capital research.Results. The study provides a detailed description of human capital with allowance for the specific aspects of its manifestation at the micro-level of the economic system and industry-specific features of trade; examines the methods of and approaches to the assessment of efficiency of investments in human capital, also taking into account industry-specific features; proposes a combined method for human capital assessment at a trading enterprise based on a combination of CIV and MVAIC methods and a criterion for the assessment of efficiency of investments in human capital based on the relationship between the value of investment and human capital growth during the reporting period.Conclusions. A new method for assessing and predicting the human capital of trading enterprises is proposed. It is harmonized with a value-based approach to management and can be integrated into the management systems of trading enterprises.

СRITERION OF THE COMPANY'S ECONOMIC SAFETY EVALUATION BASED ON THE VBM CONCEPT

Introduction. Effective business in today's conditions requires the formation of a progressive methodology that will manage and predict the development of all areas of business entities. The main objective of the study is the development and implementation of a universal assessment model and ensuring a high level of economic security from the impact of internal and external threats. Methods. The methods of analysis, deduction, abstraction and analogy are used to reveal and construct the interconnections between elements of the enterprise's value management, the components of economic security and the basic processes of enterprise activity. As a result, an integrated indicator of economic security of the company is formed on the basis of modeling and formalization method. Results. The economic added value (EVA) methodology was analyzed and the enterprise value management factors were identified. The interrelation of the allocated values factors and economic safety’s resource-functional components is justified. A set of factors for assessing the value of an enterprise and the level of safety of resource-functional components of economic security is grouped. A criterion for assessing the enterprise’s economic security has been developed and proposed. As a result, a model of enterprise management is constructed, with the help of which both the level of economic security and the value of the enterprise are assessed and managed simultaneously. Discussion. Prospects for further research are aimed at improving the methodology for calculating the integral indicator of economic security. The study of the factors and indicators influence on the level of economic security for different ownership forms and management forms.

Innovation capital in the appraisal system of intrinsic industrial enterprise value

The paper studies innovation capital value of in formation of intrinsic industrial enterprise value. The authors specify a structure of intrinsic industrial enterprise value, establish an innovation capital position therein and describe interrelation between all cost components. Concept and essence of enterprise innovation capital are defined on the basis of a scholarly opinion with concentration on its difference from innovation potential. The scheme of innovation capital formation with involved cost components is described during clarification of nature of innovation capital and its importance in intrinsic industrial enterprise value management. In the paper there is indicated an estimation procedure, in which description differential features of such components appraisal as value of innovation projects in the developmental stage and value of innovation projects in the implementation phase are emphasized based on the author’s clarification of essence of innovation capital and identification of its place in a modified model of intrinsic industrial enterprise value. The proposed procedure of innovation capital estimation is approved by an example of two innovation projects, which are in the different stages, but have the same earning capacity and equal financing terms. The calculation data showed that enterprise innovation capital value, which innovation project is under development, is significantly lower than the same indicator of a company, which innovation project is underway. The recommendations on investment policy improvement, made by the authors, which are aimed at innovation capital compounding and intrinsic industrial enterprise value increase, form the result of the paper.

Management by the value of enterprise

The management of the enterprise's value is largely aimed at increasing the investment attractiveness of the enterprise. The search for new methods and techniques for managing the property complex faces a number of problems that are a promise of developing scientific approaches to the development of new progressive methods of making managerial decisions. The article considers alternative options for improving the quality of enterprise management and suggests the direction of improving the organization’s cost management system. A number of limiting factors, which allowed the author to determine the target indicators of the presented model, determines the presented objective function of enterprise value. It is permissible to change and expand the composition of the indicators and the approaches used to assess the value of the enterprise. The recommended model allows determining the reserves of increasing the efficiency of the enterprise, affecting the value of the property complex. Dependence of the singled out evaluation criteria and the targets of strategies for increasing the value of enterprises is indicated. The main stages of the enterprise value management process are considered as a single concept of increasing the current value of the organization. The characteristic of the concept of management aimed at creating value – Value Based Management (VBM) is presented. The main principles of VBM aimed at qualitative improvement of strategic and operational decisions at all levels of management of the organization are singled out. Article considers the technology of introducing a cost management system based on the example of a construction organization. The main stages of enterprise cost management aimed at long-term sustainable growth in the value of the organization are identified. Particular attention is paid to the stages of analysis of the contribution of production and management units to the total value of the enterprise and the formation of a group of performance indicators and the effectiveness of the enterprise value management system. Place and role of operational control over the value of assets and the use of management personnel are indicated. Importance of the enterprise value management system as an instrument of maximizing its market value is proved.

Value Based Management (VBM) for Logistics Enterprises

Currently, when the market of every industry branch is a highly competitive one, the great need is to gain advantage against competitors. This can be achieved in many different ways. One of them may be appropriate management of enterprise value. This article presents the opportunities offered by Value Based Management (VBM) on the example of Polish companies realizing activities in the field of logistics – accurately reverse logistics and logistics of waste. It also presents the case study of company performing such activities. This article attempts to identify the key determinants of value creation in the logistics companies.

Risk Management in the Process of Enterprise Value Management on an Example of Food Manufacturer

This paper indicates the role of current assets in risk management. The aim is to underline the importance of shaping the structure of current assets as a way of enterprise value management and risk reduction.

Management of Enterprise Value on the Example of Companies in the Leather Shoes Manufacturing

The report presents one way of managing the value of companies on the example of two companies from the 15.20, it is manufacture of footwear. The calculations determine the optimal structure capital and optimum economic value added EVA based Data from the financial statements of the analyzed companies and the read the values established for the industry.

Enterprise Value Management on an Example of Company Operating in a Food Industry

The purpose of this report is to underline the influence and the role of current assets in the process of shaping the enterprise value. This work presents possible scenarios about the way of shaping this capital and the potential impact on enterprise value. Possible scenarios are presented as sequences of occurrences.