Methodical basis for enterprises capitalization evaluation

Valeriy Goryachuk
Doctor of Economics, Senior Research Fellow of Interregional Economic Development Department of Ukrainian Black Sea Region, Institute of Market Problems and Economic & Ecological Research of the National Academy of Sciences of Ukraine, e-mail: valeriygoryachuk@gmail.com, ORCID ID: https://orcid.org/0000-0003-4061-5336

Julia Nazarenko
Postgraduate student of Interregional Economic Development Department of Ukrainian Black Sea Region, Institute of Market Problems and Economic & Ecological Research of the National Academy of Sciences of Ukraine, e-mail: ju.lia.uniti@gmail.com, ORCID ID: https://orcid.org/0000-0001-9049-1218

Cite this article:

Goryachuk, V., Nazarenko, J. (2018). Methodical basis for enterprises capitalization evaluation. Ed.: M. Zveryakov (ed.-in-ch.) and others [Metodychni zasady otsinky kapitalizatsii pidpryiemstv; za red.: М. I. Zvieriakova (gol. red.) ta in.], Socio-economic research bulletin; Vìsnik socìal’no-ekonomìčnih doslìdžen’ (ISSN 2313-4569), Odessa National Economic University, Odessa, No. 4 (68), pp. 20–29.

Abstract

The capitalization of enterprises as a process of creating value added is considered in the article, and its evaluation is carried out on the basis of the income approach. It is substantiated that the gross value added of an enterprise is a key indicator of an enterprise’s activity, both in terms of its capitalization and efficiency. The concepts ratio of «gross value added in actual prices» and «gross value added in basic prices», and also their place among other indicators of enterprise’s activity, is considered. As a key indicator of enterprise’s capitalization, has been proposed to consider of its public value. It is proposed to carry out its assessment on the basis of methods of discounting cash flows and direct capitalization of income. Discount rate was calculated by the cumulative method. The growth rate of gross value added of Ukrainian enterprises in 2012–2017 at actual prices was calculated within the framework of the exponential function model. Along with the concept of «public value of an enterprise», the concept of «private value of an enterprise» was defined as a value which creates added value for enterprise’s owners (the sum of net profit and depreciation). A comparison of Ukrainian enterprises public and private value by type of activity showed that the first one is significantly less than the second one and in 2014 and 2015 the country’s enterprises private value was negative. In capitalization context, the concept of «labor productivity» is defined as a volume of gross value added per employee. According to the research results, the concept of «public value of an enterprise» is proposed as a value, which creates of an enterprise’s gross value added. It is proposed to evaluate it by the direct capitalization method of gross value added. Calculations of Ukrainian enterprises public value in 2012–2017 at actual prices are showed his increasing of more than 2 times, due to high inflation rates. On the contrary, the evaluate at constant prices in 2012 indicates a drop of 8,4%, especially in industry, where the decrease was almost a third (32,3%), which indicates the deindustrialization process in the country’s economy.

Keywords

gross value added; capitalization; enterprise’s public value; enterprise’s private value; actual prices; fixed prices.

JEL classification: E220; DOI: https://doi.org/10.33987/vsed.4(68).2018.20-29

UD classification: 330.14.01

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