Value of a company: essence and peculiarities of definition

Moiseiev Viacheslav
postgraduate student of the faculty of finance and banking, department of financial management and stock market, Odessa National University of Economics, Odessa, E-mail:moiseievslav@gmail.com, ORCID ID: https://orcid.org/0000-0002-0785-2527

Iorgachova Мaria
PhD in economics, associate professor, department of financial management and stock market, Odessa National University of Economics, Odessa, E-mail:moiseievslav@gmail.com, ORCID ID: https://orcid.org/0000-0002-0785-2527

Cite this article:

Moiseiev V., Iorgachova М. (2023) Value of a company: essence and peculiarities of definition. Ed.: V.V. Kovalenko (ed.-in-ch.) and others [Vartist kompanii: sutnist ta osoblyvosti vyznachennia; za red.: V.V. Kovalenko (gol. red.)], Scientific Bulletin of the Odessa National Economic University (ISSN 2313-4569), Odessa National Economics University, Odessa, No. 1-2 (302-303), pp. 120-126.

Abstract

In the article, the authors consider the value of a company as the key aspect of the company's sustainable development and focus attention on the problems of distinguishing approaches to determining this value. This article aims to explore the essence and peculiarities of determining the value of a company for the gradual implementation of this concept into the activities of Ukrainian economic entities. The paper identifies that the value of a company serves as an indicator of the efficiency of decisionmaking by owners and management personnel and is involved in the comprehensive evaluation of the effectiveness of company management. Estimating the value of a company is one of the crucial tasks of corporate management due to the determination of competitiveness and financial stability, as well as an indicator of the company's development. It is noted that the need for evaluating the value of a company arises in various scenarios, including mergers, stock issuance, and company liquidation, as well as in the case of approval of effective means of increasing the volume of attracted capital or evaluation of intellectual capital. Through an analysis of various approaches to interpreting the economic category of "company value," the authors of the article identify the main approaches to interpreting the economic category of "value of a company" which are highlighted: price, incurred expenses, and value. Detailed classification of existing approaches to determining the value of a company in terms of content, proposed by the authors, provides an opportunity for improving the modern interpretation of this concept. In the conclusions of the article, the authors formulate a unified approach to understanding the value of a company that can serve as the basis for a modern system of value-based management.

Keywords

value of a company, value based management, financial resourses, cash flow, tangible and intangible assets, performance criteria.

JEL classification: G300; DOI: 10.32680/2409-9260-2023-1-2-302-303-120-126

UD classification: 657.372.5

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