Indicator of company value management efficiency

Authors

  • Андрій Вікторович Сотніков National Technical University «Kharkiv Polytechnic Institute», 21, Frunze str., 61002, Kharkiv, Ukraine

DOI:

https://doi.org/10.15587/2312-8372.2013.18473

Keywords:

value, value-oriented management, cash flows, total business return, management, efficiency.

Abstract

Basic indicators of value-oriented management were considered in the paper. The main advantages and disadvantages of each considered indicator of the value-based management were defined. It was found that the indicator of total business return is one of the most effective indicators of value-based management, since it accurately reflects the relationship between the profitability, growth and cash flows. The basic approaches to determining the company value at the end and beginning of activity were considered. The basic reasons which complicate the use of comparative approach to estimating the company value in Ukrainian business practice were established. It was found that when determining the assessed value of the company for determining the efficiency of its activity, the income approach should be used, namely the method for discounting cash flows based on the variable growth of future cash flows, using net assets. A new indicator of value-oriented management was developed based on discounting the free cash flows of the company and allowing estimating not only current, but also its future activity.

Author Biography

Андрій Вікторович Сотніков, National Technical University «Kharkiv Polytechnic Institute», 21, Frunze str., 61002, Kharkiv

Graduate student, Assistant Department of Finance

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Published

2013-09-11

How to Cite

Сотніков, А. В. (2013). Indicator of company value management efficiency. Technology Audit and Production Reserves, 5(3(13), 6–9. https://doi.org/10.15587/2312-8372.2013.18473

Issue

Vol. 5 No. 3(13) (2013): Economy of enterprise

Section

Economy of enterprise

License

Copyright (c) 2016 Андрій Вікторович Сотніков

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