Financial management of creating value in companies
Abstract
This article is an introduction to a specific and important aspect of the financial management of companies nowadays. This is the value creation process. The investment and financing decisions, as well as the corporate policies and strategies, should be assessed within this context. The focus of this research is on the extent of value creation by companies on international capital markets, mainly during the years after the global financial crisis. The study includes analysis of the dynamics of the main indicators of return on capital, as well as the dynamics of the cost of capital. The process of creation of Economic Value Added (EVA) in companies, in the conditions of stagnation on most capital markets, is studied on this basis.
Keywords
JEL Classification
References
Касърова, В., Р. Димитрова (2008). Икономическа добавена стойност (EVA) – понятие и ключови характеристики. – В: Финансови иновации – изследвания и практики. С.: НБУ, с. 89-113.
Касърова, В. (2008). Управление на стойността – нова управленска концепция. – В: Финансови иновации – изследвания и практики. С.: НБУ, с. 4953.
Ненков, Д. (2005). Оценка на инвестициите в реални активи. С.: УИ „Стопанство”.
Ненков, Д. (2008). Оценка на инвестиционните и финансиращите решения в компаниите в контекста на създаването на стойност за собствениците. – Контролинг, бр. 3.
Ненков, Д. (2012). Проблеми на определяне премията за риск и цената на собствения капитал на развиващите се капиталови пазари. – ИДЕС, бр. 8, с. 56-72
Brigham, E. F., L. Gapenski (1994). Financial Management – Theory and Practice. The Dryden Press.
Copeland, T., T. Koller, J. Murrin (2000). Valuation – Measuring and Managing the Value of Companies. New York: John Weley & Sons.
Damodaran, A. (2002). Investment Valuation – Tools and Techniques for Determining the Value of Any Asset. New York: John Weley & Sons.
Damodaran, A. (2013). Equity Risk Premiums and Stocks: Bullish or Bearish Indicator. May 19, available at http://pages.stern.nyu.edu/~adamodar/ [Accessed 21 May, 2013].
Damodaran, A. (2014). Price and Value: Discerning the Difference. May, available at http://pages.stern.nyu.edu/~adamodar/ [Accessed 21 April, 2017].
Fernandez, P. (2015). Valuation and Common Sense (Ch. 34 EVA, Economic Profit and Cash Value Added Do NOT Measure Shareholder Value Creation), 5th ed., p. CH.34-8, http://ssrn.com/abstract=2209089
Gitman, L. J. (1991). Principles of Managerial Finance. New York: Harper Collins Publishers.
McTaggart, J. M., P. W. Kontes, M. C. Mankins (1994). The Value Imperative: Managing for Superior Shareholder Returns, New York, The Free Press.
Nenkov, D., C. Bathala (2008). Price-Earnings Ratios on the Bulgarian Capital Market: An Analytical Approach to Comparing Actual Vs. Fundamental P/E Ratios. – In: Globalization: Opportunities & Challenges. Delhi: Wisdom Publications, p. 347-366.
Koller, T., M. Goedhart, D. Wessels (2015). Valuation – Measuring and Managing the Value of Companies, 6th ed. New York: John Weley & Sons
O’Neill, J. (2013). Jim O’Neill’s Final Presentation: Goldman Guru presents His View of the World through 2020, available at http://www.businessinsider.com/jim-oneill- global-macro-outlook-2013-4?op=1 [Accessed 20 May, 2013].
Pinches, G. E. (1987). Essentials of Financial Management. New York: Harper & Row, Publishers.
Reilly, F. K., K. C. Brown (2003) Investment Analysis – Portfolio Management. Thomson Learning, USA.
CS First Boston. EVA Primer, February 20, 1996. http://pages.stern.nyu.edu/~adamodar [Accessed 20 April, 2017].