Enterprise Value

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Sources of enterprise value

Sources of enterprise value

The value of the enterprise has an increased importance in business valuation, so maximizing it becomes a priority for the interested parties, such as its shareholders or investors. The purpose of this article is the analysis of the sources of enterprise value and its factors, in order to understand the causes of the decrease or the possibilities for maximizing the enterprise value, passing over the main concepts in the literature. The analysis refers to the listed companies on the Bucharest Stock Exchange (BVB) from the energy sector, including the largest Romanian company as per its capitalization, OMV Petrom. The research took into account the fact that the analysis of a large company with a long history is facilitated by the existence of multi-annual information, unlike the firms in the early life cycle operating in an emerging market.
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Enterprise Value Generators in the Building Industry

Enterprise Value Generators in the Building Industry

Abstract. Value generators mark factors that influence the given enterprise´s success most. Thus, they refer to activities and abilities that increase profitability, decrease risk, and support the company´s growth. The aim of this contribution is to identify value generators in a building enterprise. The main presumption, however, is that the enterprise value will be measured by the EVA Equity indicator (Economic Value Added for the shareholders – owners). Data to be analysed come from the Albertina database. They include complete financial statements of building enterprises that operated on the market between 2006 and 2015. The data is organized into a table the EVA Equity in each enterprise is calculated per each year of its operation on the market. The table is subsequently imported into the Statistica software which searches for the extent to which the EVA Equity indicator is dependent on the individual items of financial statements. The result is a created adequate methodology and identification of value generators in building industries from 2006 to 2015 in the Czech Republic. The following variables are marked as the most significant: economic growth per current accounting period, equity, bank loans and bailouts, trade receivables, and current assets.
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Volume of Derivative Trading, Enterprise Value, and the Return on Assets

Volume of Derivative Trading, Enterprise Value, and the Return on Assets

of a firm and accordingly provided a positive effect on enterprise value by improving profitability. However, after the financial crisis, the trading volume in OTC de- rivatives was only marginally significant. Rather, the tra- ding volume in exchange derivatives appears to become significant. This implies that the effects of derivatives trading may vary according to the level of the market risk of the derivatives.

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A Study on Customer Prosumption Concept and Its Impact on Enterprise Value Co Creation

A Study on Customer Prosumption Concept and Its Impact on Enterprise Value Co Creation

DOI: 10.4236/tel.2017.77138 2041 Theoretical Economics Letters WINDOWS. For another example, there was the rise of shared bicycles (OFO) in 2015. Personal bike sharing for the others can be looked on as “production completed”. While, customer’s rights to use all the bicycles can be considered as “possession of consumption” [2]. Meanwhile, academic circles are performing research on “prosumption and its social value effect”, as Albors-Garrigos et al. [3] note that value can be created by activities between enterprises through a network of value from enterprise level. With value chain theory, specific ways though which information technology creates value for producers and customers should be analyzed further. Esper [4] believes that production and consumption should be integrated together, and the value creation of enterprise supply chain can be implemented through the knowledge management. However, the existing researches only take into account of value creation of prosumption from enter- prises perspective while ignore the important role of customers in the process of enterprise value’s elevating. For this reason, Meng et al. [5] embed customer into the value creation system of supply chain, under the idea of integrity between production and consumption, and revealed the driving effects and feedback mechanisms of customers in the system. Therefore, we formally define pro- sumption as “value creation activities undertaken by the consumer that result in the production of products they eventually consume and that become their con- sumption experience” [6]. However, it is regrettable that, since the customer’s prosumption behavior theory does not have a real and substantive progress, as well as the changes in the enterprises structure caused by Internet, the impact mechanism of customer prosumption behavior to enterprise value co-creation has not been revealed at some deep level by the related researches.
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An Analysis of Enterprise Value Growth: A Dynamic Equilibrium Model Based on Adaptive Innovation

An Analysis of Enterprise Value Growth: A Dynamic Equilibrium Model Based on Adaptive Innovation

How to explain the fa'ct that enterprises can realize the non-physical balanced growth of the enterprise value which is difficult for the classical economics to explain too? Can we explain it from the goods, the value, the culture or human behavior? Naturally, in the history, the researches on the abstract theory of value studied by classical scholars have already been very perfect. How- ever, they failed in offering practical guidance in the enterprises operating activities in the humane society [1]. How to create the enterprise value? How to run the en- terprise value? How to expect the future growth of the enterprises value? And all of these questions have al- ready been becoming more and more confused ones for scholars and practitioners in all economic and manage- ment fields.
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Challenging the Status Quo:  Steel Producer Case Study on the Enterprise Value for M&A

Challenging the Status Quo: Steel Producer Case Study on the Enterprise Value for M&A

Tobin’s q may still support improvements and developments in the theory and practice; for example, its significance can be further developed, for smaller intervals, such as q of 0.5 to indicate investment for the short term, while for the long term investment, q<0.5. Companies need to permanently consider the changes in their value and manage this process at their best. Enterprise Value is a firm valuation proxy that approximates the current market value of a company, to determine takeover or merger price of a firm, unlike market capitalization, which is smaller; EV takes into account the entire liquid asset, outstanding debt, and exotic equity instruments that company has on its balance sheet.
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Corporate Social Responsibility, Internal Control and Enterprise Value—Based on the Chinese Stock Market

Corporate Social Responsibility, Internal Control and Enterprise Value—Based on the Chinese Stock Market

For the enterprise managers, first of all, changing the traditional view of cor- porate social responsibility. Corporate social responsibility behavior will pro- duce a certain amount of cost, but the economic benefits of it are higher than its cost. It means that corporate social responsibility will not reduce the value of the company, on the contrary, will maximize the value of the enterprise. Therefore, enterprises should actively undertake corporate social responsibilities. Only in this way can the long-term maximization of enterprise value be realized. Second, strengthening the understanding of internal control. The economic role of in- ternal control has beyond the scope of the COSO proposed. It not only can im- prove the company’s internal management, but also a guarantee for enterprises to show their corporate social responsibility behavior to stakeholders. While undertaking corporate social responsibilities, enterprises should improve their internal control. The combination of the two can give full play to the “halo ef- fect” of corporate social responsibility, which is conducive to the realization of their business objectives, and promote the sustainable development of enterpris- es.
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Study on Nature of Property Right, Shareholding of Institutional Investor  and Enterprise Value

Study on Nature of Property Right, Shareholding of Institutional Investor and Enterprise Value

differences on enterprise financial value (ROE) and market value (Tobin’Q) is tested by regression Equations (1) and (2). Meanwhile, this article, with existing literature as reference, designs the company size of control va- riables (SIZE), financial leverage (LEV), growth rate of total assets (GROWTH), OVER charge ratio (MER), turnover of total assets, shareholding ratio of the biggest shareholder (FIRET), and total shareholding proportion of top 10 shareholders (TEN). The regression result of regression (1) could verify the hypothesis 1, 3, 5, 7-the differences brought by correlation coefficient of shareholding proportion of institutional investors and market value (Tobin’Q), and the nature of property (PROPERTY); The regression result of regression (2) could verify the hypothesis 2, 4, 6, 8-the differences brought by correlation coefficient of shareholding proportion of institu- tional investors and market value (Tobin’Q), and the nature of property (PROPERTY). If INST and ROE have the positive correlation, that means institutional investors provide us with external supervision so as to enhance the governance of our company, and improve the financial value of our enterprise. That proves the authenticity of hypotheses 1. If other situations occur, that proves the non-authenticity of this hypotheses. If INST and ROE have the positive correlation, that means the shareholding proportion of institutional investors could transfer signal, thus improving enterprise market value. That proves the authenticity of hypotheses 2, if other situations occur, that proves the non-authenticity of this hypotheses. Meanwhile nature of property (PROPERTY), as a dummy variable, can be considered as SOE when it is “1”, as private enterprise when it is “2”. If the property is “0”, that means INST and ROE have the positive correlation, which indicates that shareholding proportion of in- stitutional investors is positively correlated with enterprise financial value and market value, thus proving the authenticity of hypotheses 3 and hypotheses 4. If other situations occur, that proves the non-authenticity of these hypothesis. If property is “1”, INST and ROE have the positive correlation, which means shareholding propor- tion of institutional investors and financial value & market value have the positive correlation, thus proving the authenticity of hypotheses 5 and hypotheses 6. If other situations occur, that proves the non-authenticity of these hypothesis. The condition in which INST is positively correlated with ROE and Tobin’Q, and its coefficient α 1 less than that when property is “0”, proves that governments’ interference aggravates the agency problems in SOE, weakens the role of shareholding of institutional investors in improving enterprise value of SOE. This means the authenticity of hypotheses 7 and hypotheses 8. If other situations occur, that proves the non-authen- ticity of these two hypothesis.
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Innovation capital in the appraisal system of intrinsic industrial enterprise value

Innovation capital in the appraisal system of intrinsic industrial enterprise value

Abstract. The paper studies innovation capital value of in formation of intrinsic industrial enterprise value. The authors specify a structure of intrinsic industrial enterprise value, establish an innovation capital position therein and describe interrelation between all cost components. Concept and essence of enterprise innovation capital are defined on the basis of a scholarly opinion with concentration on its difference from innovation potential. The scheme of innovation capital formation with involved cost components is described during clarification of nature of innovation capital and its importance in intrinsic industrial enterprise value management. In the paper there is indicated an estimation procedure, in which description differential features of such components appraisal as value of innovation projects in the developmental stage and value of innovation projects in the implementation phase are emphasized based on the author's clarification of essence of innovation capital and identification of its place in a modified model of intrinsic industrial enterprise value. The proposed procedure of innovation capital estimation is approved by an example of two innovation projects, which are in the different stages, but have the same earning capacity and equal financing terms. The calculation data showed that enterprise innovation capital value, which innovation project is under development, is significantly lower than the same indicator of a company, which innovation project is underway. The recommendations on investment policy improvement, made by the authors, which are aimed at innovation capital compounding and intrinsic industrial enterprise value increase, form the result of the paper.
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An Empirical Analysis of the Influence of Regional Subsidy on Enterprise Value

An Empirical Analysis of the Influence of Regional Subsidy on Enterprise Value

As to the Cross-regional enterprises, the relationship between the regional subsidies and the tax expenses pre- sented negative in four years. This means that the region support to the Cross-regional enterprises failed to achieve the expected harvest because the Cross-regional enterprises failed to do more for the development of the region. As a result, this article considers that the regional subsidies to the Cross-regional enterprises are com- pletely a waste. However, the two indexes are strongly related among the Local enterprises, which mean the ef- forts in the society have gained expected returns. The analysis of this part has also demonstrated the value of Local enterprises is highly positive related with the regional subsidies.
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Enterprise Value and Intellectual Capital: Study of BSE 500 Firms

Enterprise Value and Intellectual Capital: Study of BSE 500 Firms

The purpose of this paper is to estimate the intellectual capital coefficient of the firms under study and to study the relationship, if any between intellectual capital and intellectual capital and its constituents. In this empirical paper, analytical research design has been used. Pulic’s VAIC (modified) has been used to estimate the intellectual capital of BSE S&P 500 listed firms from 2007-2016. The data has been collected from CMIE and collected data has been analyzed using Pearson correlation and linear multiple regression analysis using CMIE PROWESS. Findings show that almost all firms under study have a good VAIC score means above 4 and the top VAIC scorer firms were mainly from refinery, metal, cement, steel, tobacco. Correlation analysis and Linear multiple regression analysis show that M/B ratio has a significant relationship with VACA, VAHU, Research and Development (Innovation capital) and Advertisement expenses (customer capital). Year-wise results depicts that value of adjusted R 2 is increasing, in 2007 it was just .164 and in the year 2016 it is .607 which infers that VAIC’s role is improving in measuring the market value of firms under study. Year wise analysis shows that adjusted R 2 is improving, so findings may serve as significant input for the firms to use intellectual capital as the main factor for improving the market value of firms. This paper will definitely contribute to the existing literature.
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Being a Social Enterprise: Value-added or Fuel to the Misconceptions? The Case of Social Enterprises in Kosovo

Being a Social Enterprise: Value-added or Fuel to the Misconceptions? The Case of Social Enterprises in Kosovo

Along with the brand building, invest in creating a product/service that delivers on the brand promise. Survey results showed that quality is one of the major factors when considering the purchase of a product/service. In this sense, analyze every step of the delivery of the product/service you offer, find the weaknesses and work on them. Getting feedback from customers is a very important step since that can provide great insight for current or future social enterprise strategies. On the same note, focus on also creating a unique product that differentiates you from the other competitors. This also is correlated with how much research that the social enterprise engages in whether that is in regards to other competitors or customers. It is crucial to grasp the opportunities to offer products/services that might be demanded. This differentiation can also be enhanced by the fact that you operate as a social enterprise. The value that you offer only by selling that product or service in addition with the value that the society gains from that, can be a distinguishing feature that immensely helps both on brand building and differentiation. However, as mentioned earlier, the way you communicate is very important.
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ASSESSING THE VALUE OF THE ENTERPRISE: METHODS AND INSTRUMENTS

ASSESSING THE VALUE OF THE ENTERPRISE: METHODS AND INSTRUMENTS

The value determined by the assessor has the opportunity to change under the influence of the market, i.e. supply and demand. For this reason, it was stated that the final value of the enterprise consists of objective and subjective values. To the purchaser, the objective value of the enterprise is the value of the pure substance or liquidation value. Consequently, the subjective value will add or subtract something from the value of the pure substance (or the liquidation value). While to the seller, the value of the pure substance or liquidation value will adjust the assessments of development opportunities. It means that there must be a difference between the value of the enterprise assets and the value of the enterprise as a whole. The reason for this is that the value of the enterprise is determined by way of exploitation and the ways of combining of different property components, which the enterprise uses in their business. The enterprise value will vary depending on the applied assessment methods. Also, the sale and purchase price will be determined in the range between the lowest and highest value that is acceptable to the negotiating parties.
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Value Evaluation Research of Node Enterprise in the Energy Service Industry Value Network

Value Evaluation Research of Node Enterprise in the Energy Service Industry Value Network

For the research of value network model, Literature [7] points out that the value network emphasizes on innovative. Information becomes the main characters and directly participates in value creation. Literature [8] considers that the enterprise value network has five basic competing advantage effects which are internet economy, economies of scale, risk versus, viscous effect and speed effect. About the constitution of the value network, Literature [9] thinks that value network is the objective existence. It consists of utility system, resources selection, rules and regulations, contact information, market pattern and system of value activities and other factors. Literature [10] builds a value network model in view of the service ecosystem under the business environment and makes a simple application.
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Application of the Economic Value Added index in the performance evaluation of forest enterprise

Application of the Economic Value Added index in the performance evaluation of forest enterprise

working capital is negative. The higher it is, the higher should be the ability of the enterprise to repay its li- abilities. If the net working capital has negative val- ues, it is so-called unsecured debt. Concerning the calculated values of the NOPAT, we can state that it acquires a positive value, which proves an efficient use of operating assets (Fig. 2). Table 6 documents the values of the weighted average cost of capital WACC. From the standpoint of the WACC, we can notice an increase in the enterprise in the examined period. In the year 2013, the growth of the WACC reached the level of 3.21%. In the given year the value of bank loans dropped and the enterprise was making a profit and so stockholder’s capital has increased within the total capital invested. The given facts have influenced also the enterprise market value that is expressed by the EVA index in Table 7. The EVA index was reaching a positive value in the enterprise and in the examined period it had even a growing tendency. If the EVA reaches positive values, then we can state that such an enterprise is effective, the enterprise value increases from the viewpoint of owners (in a sense of the val- ue-based management theory) because they get back more than they invested in the enterprise, and that is at the same time with satisfying creditors – lenders. From the previous calculations we can also state, if the market value of the analysed enterprise is higher than zero, the enterprise creates values and there are condi- tions that these values will increase in the future.
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Business Application Services. Business Applications that provide value to your enterprise.

Business Application Services. Business Applications that provide value to your enterprise.

Mobility has evolved as the most dormant force of 2014 and is increasingly moving higher in enterprise value chain, from just providing emails to being part of enterprise strategy. At Sensiple, we see this force bringing in-numerable benefits and help our customers leverage it.

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Enterprise modeling:process and REA value chain perspective

Enterprise modeling:process and REA value chain perspective

The facts describing what happens or happened are validated, analyzed and further processed to be compared with the target values. The differences from target values serve as an input to events running in the controlling subsystem. However, the controlling subsystem is also a part of enterprise. Thus, the same patterns should be found there. Indeed, the activities of controlling personnel can be also looked upon on the REA basis. The economic events at controlling subsystem operational level consume the management labor, use needed equipment and other resources. These events result in plans, schedules, production rules, etc., generally, in knowledge intensive controlling resources. The above described scheme is presented in Figure 2.4. In this figure, only one relation of controlling system to controlled system is shown to simplify the picture. The enterprise value chain can be decomposed into several transaction cycles using business patterns of controlling and controlled subsystems. The controlled subsystems are modeled by REA patterns using their own operational and policy levels. The controlling subsystem sets the rules, indicators, targets etc. of individual controlled subsystems via corresponding policy levels. The events running at controlling operational level follow typical REA patterns of agent-resource-event chains. In this way also overhead costs can be captured and modeled. Following the REA concept, each controlling subsystem needs also its’ own policy level. Indeed, also controlling subsystem of an enterprise has to follow common rules, laws and other conditions set by the enterprise
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Social Enterprise: Raffirming Public Purpose Governance Through Shared Value

Social Enterprise: Raffirming Public Purpose Governance Through Shared Value

fiduciary duties apply to B-Corps and L3Cs. Traditional connotations of fiduciary duties of care and loyalty for both for-profits and nonprofits, and the additional nonprofit duty of obedience to mission, may be irrelevant or unsuited to apparent conflicts of interest in these social enterprise entities. For example, stakeholder statutes provide the B-Corp with an equal double bottom line creating the appearance of a governance standard that consistently serves two masters. They also create the L3C entity subject to ambiguous requirements to “significantly” pursue a charitable educational purpose and “not significantly” to pursue profits. Thus L3Cs operate like nonprofits in significantly pursuing a charitable or social mission. However, while they place mission before significant profits, they still attract investors and not charitable donors. Perhaps one way to avoid this conflict is to require specific fiduciary duty language in their governance that clearly identifies social and profit objectives. The language should expressly state a fiduciary responsibility that carefully balances social mission and financial returns to investors. In other words, a fiduciary standard that expressly articulates a duty of shared value. 94 This would provide investors with standard L3C fiduciary responsibility. State legislatures should clarify fiduciary norms for social enterprise governance.
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The Enterprise Merger and Acquisition Effect on Firm Value—A Discussion on Geely’s Acquisition of Volvo for Example

The Enterprise Merger and Acquisition Effect on Firm Value—A Discussion on Geely’s Acquisition of Volvo for Example

In today’s world is a changing world, the world increasingly closer connection and communication between, growing social needs constantly stimulate the market competition, enterprises face the increasing pressure and competition, need to make a series of effective strategic decision-making, guarantee its market position. Enter- prises in pursuit of the interests and the expansion of the enterprise, needs to make the correct financial decisions, compared with the enterprise internal the slow accumulation of capital, enterprise through merger and acquisi- tion is greatly accelerated the development of enterprise, expand rapidly. Through mergers and acquisitions, make the enterprise can get rid of the technology, time, capital and other elements of limit, realize reasonable allocation of resources, enhance their various advantages, in a relatively short period of time complete the scale effect, far away the gap with competitors [2] [3]. Enterprise development needs far environment, through mer- gers and acquisitions can be time at the lowest cost to enter new business, across the barriers to limit, reduce the hostility to competitive enterprises, achieved stable development opportunity, and diversify business through M & A.
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Enterprise-Wide Risk Management (EWRM) as a Value Added Tool in Enhancing the Economic Value of Business Enterprises

Enterprise-Wide Risk Management (EWRM) as a Value Added Tool in Enhancing the Economic Value of Business Enterprises

Thus, this particular study affirms the confirmation that EWRM as a value-added tool actually improves the level of company performance and at the same time enhances the economic value of the business entities in tangible and intangible forms. All the respondents agree that the benefits are there although they are intangible and not easily quantifiable. An important point to note is that all respondents involved in this study agree that the availability of the EWRM framework and initiatives within their companies actually provides them with the level of motivation and confidence required in managing their risk exposures effectively.
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