Proceedings of the International Scientific Conference "Far East Con" (ISCFEC 2020)

Formation of Cash Flow-Based Factor Models in the System of Value-Based Management

Authors
N A Shcherbakova, V A Shcherbakov
Corresponding Author
N A Shcherbakova
Available Online 17 March 2020.
DOI
https://doi.org/10.2991/aebmr.k.200312.105How to use a DOI?
Abstract
The article considers the issues related to assessment and management of company value. It justifies the need for applying economic-mathematical modeling for company valuation in order to let companies manage their values. The authors propose models for calculating cash flow based on income and investment flows, calculating weighted average price of invested capital based on equality of the results of applying discounted cash flow method and economic value added method to company valuation, and calculating the factors affecting income and investment flows based on structural shifts method taking into account deviations from the average. The developed models of cash flows and calculation of weighted average cost of invested capital have been tested using actual data from three Russian high-tech companies. The sampling included a wide range of companies with revenues over two billion rubles: an industry leader, a company in the middle of the range, and a company at the lower boundary of the range. The calculations made it possible to analyze and compare the key performance indicators of the enterprises: rate of return, Tobin’s ratio, fundamental value, equity share in capitalized value, effective income tax rate, etc. Classification of indicators according to the levels of their factorial influence on the final company value figures has been developed. The study has led to a conclusion that there is a need to employ the company’s value analysis for interpreting results of companies’ financial and economic activities, since the calculations performed have allowed assuming that conventional indicators of financial and economic analysis cannot fully evaluate a company’s performance. The proposed models for assessing and managing companies’ values make it possible to carry out theoretical calculations automatically.
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Volume Title
Proceedings of the International Scientific Conference "Far East Con" (ISCFEC 2020)
Series
Advances in Economics, Business and Management Research
Publication Date
17 March 2020
ISBN
978-94-6252-929-8
ISSN
2352-5428
DOI
https://doi.org/10.2991/aebmr.k.200312.105How to use a DOI?
Open Access
This is an open access article distributed under the CC BY-NC license.

Cite this article

TY  - CONF
AU  - N A Shcherbakova
AU  - V A Shcherbakov
PY  - 2020
DA  - 2020/03/17
TI  - Formation of Cash Flow-Based Factor Models in the System of Value-Based Management
BT  - Proceedings of the International Scientific Conference "Far East Con" (ISCFEC 2020)
PB  - Atlantis Press
SP  - 743
EP  - 751
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.200312.105
DO  - https://doi.org/10.2991/aebmr.k.200312.105
ID  - Shcherbakova2020
ER  -