Finance and Credit
 

Formation of a company's development strategy using the model of value rapid assessment

Vol. 24, Iss. 11, NOVEMBER 2018

Received: 3 August 2018

Received in revised form: 20 August 2018

Accepted: 3 September 2018

Available online: 29 November 2018

Subject Heading: BUSINESS VALUE

JEL Classification: G32, G34, H25

Pages: 2629–2644

https://doi.org/10.24891/fc.24.11.2629

Finogenova Yu.Yu. Plekhanov Russian University of Economics, Moscow, Russian Federation
Finogenova.YY@rea.ru

https://orcid.org/0000-0003-3336-927X

Mochalina E.P. Plekhanov Russian University of Economics, Moscow, Russian Federation
Mochalina.EP@rea.ru

https://orcid.org/0000-0002-4131-1986

Ivankova G.V. Plekhanov Russian University of Economics, Moscow, Russian Federation
Ivankova.GV@rea.ru

https://orcid.org/0000-0003-2573-9074

Subject This article examines the issues related to the implementation of strategic planning, taking into account the search for alternative actions that enable the company to improve the balance of its future incomes and expenditures in the long term.
Objectives The article aims to form a company's development strategy using the offered original model of value rapid assessment.
Methods For the study, we used the basic economic models with a focus on the concept of economic value added (EVA).
Results As a result of analysis of financial risks and indicators of the company, we offer a company's development strategy through acquiring the partner company's business.
Conclusions and Relevance The offered approach helps improve the efficiency of strategic planning in the company. The results of the study can be used in the field of corporate governance, decision-making in the field of private and public corporate acquisitions taking into account the uncertainty of the growth rate of the merged company and the related advantages and risks.

Keywords: economic value added, EVA, financial figure, company value, capital structure

References:

  1. Gupta V.K., Sikarwar E. Value Creation of EVA and Traditional Accounting Measures: Indian Evidence. International Journal of Productivity and Performance Management, 2016, vol. 65, iss. 4, pp. 436–459. URL: Link
  2. Palliam R. Further Evidence on the Information Content of Economic Value Added. Review of Accounting and Finance, 2006, vol. 5, iss. 3, pp. 204–215. URL: Link
  3. Artyushina T.G., Sukhorukova I. [Description of the objects of the economic system by means of fuzzy sets and their subsequent agreement]. Ural'skii nauchnyi vestnik, 2016, vol. 5, iss. 2, pp. 53–55. URL: Link (In Russ.)
  4. Broll U., Pong Wong K. The Firm under Uncertainty: Real and Financial Decisions. Decisions in Economics and Finance, 2013, vol. 36, iss. 2, pp. 125–136. URL: Link
  5. Kolmakov V.V., Korovin S.Yu. [On the matters of improving the analysis of financials framework]. Vestnik NGIEI = Herald NGIEI, 2015, no. 5, pp. 67–73. URL: Link (In Russ.)
  6. Bernini M., Montagnoli A. Competition and Financial Constraints: A Two-Sided Story. Journal of International Money and Finance, 2017, vol. 70, pp. 88–109. URL: Link
  7. Asdemir O., Fernando G., Schneible R.A. et al. Impact of Strategy on Analyst Information. Advances in Accounting, 2017, vol. 37, pp. 103–110. URL: Link
  8. Alhenawi Y., Stilwell M. Value Creation and the Probability of Success in Merger and Acquisition Transactions. Review of Quantitative Finance and Accounting, 2017, vol. 49, iss. 4, pp. 1041–1085. URL: Link
  9. Adizes I.K. Managing Corporate Lifecycles – Volume 2: Analyzing Organizational Behavior and Raising Healthy Organizations. Santa Barbara, The Adizes Institute Publ., 2015, 260 p.
  10. Fidrmuc J.P., Xia C. M&A Deal Initiation and Managerial Motivation. Journal of Corporate Finance, 2017. (In Press). URL: Link
  11. Ordov K.V. [Using of Olson Model for Express Valuation of the Company]. Auditor, 2016, vol. 2, iss. 4, pp. 34–37. (In Russ.) URL: Link
  12. Sebehela T. Rationally Financing an Acquisition. Journal of Economics and Business, 2015, no. 81, pp. 1–20. URL: Link
  13. Johansson M., Keränen J., Hinterhuber A. et al. Value Assessment and Pricing Capabilities – How to Profit from Value. Journal of Revenue and Pricing Management, 2015, vol. 14, iss. 3, pp. 178–197. URL: Link
  14. Lobanova E.N., Palamarchuk V.P., Minasyan V.B. Finansovoe obosnovanie strategicheskikh reshenii v rossiiskikh korporatsiyakh [Financial justification of strategic decisions in Russian corporations]. Moscow, Delo Publ., RANEPA Publ., 2011, 520 p.
  15. Chira I., García-Feijóo L., Madura J. When Do Managers Listen to the Market? Impact of Learning in Acquisitions of Private Firms. Review of Quantitative Finance and Accounting, 2017, vol. 49, iss. 2, pp. 515–543. URL: Link
  16. Elgers P.T., Lo M.H., Xie W. et al. A Contextual Evaluation of Composite Forecasts of Annual Earnings. Review of Pacific Basin Financial Markets and Policies, 2016, vol. 19, iss. 3, pp. 1–40. URL: Link
  17. Khatami S.H., Marchica M.-T., Mura R. Corporate Acquisitions and Financial Constraints. International Review of Financial Analysis, 2015, vol. 40, pp. 107–121. URL: Link
  18. Alexandridis G., Antypas N., Travlos N. Value Creation from M&As: New Evidence. Journal of Corporate Finance, 2017, vol. 45, pp. 632–650. URL: Link
  19. Alhenawi Y., Krishnaswami S. Long-term Impact of Merger Synergies on Performance and Value. The Quarterly Review of Economics and Finance, 2015, vol. 58, pp. 93–118. URL: Link

View all articles of issue

 

ISSN 2311-8709 (Online)
ISSN 2071-4688 (Print)

Journal current issue

Vol. 24, Iss. 11
November 2018

Archive