MODELING OF THE INFLUENCE OF OPERATING INCOME ON THE VALUE OF INDUSTRIAL ENTERPRISE

DOI: https://doi.org/10.15688/jvolsu3.2017.1.12

Irina A. Kaluzhskikh
Candidate of Economic Sciences, Associate Professor, Department of Finance and Credit,
Samara National Research University named after S.P. Korolev
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Moskovskoe Highway, 34, 443086 Samara, Russian Federation


Veronika A. Zavarikhina
Postgraduate Student, Department of Finance and Credit,
Samara National Research University named after S.P. Korolev,
Manager of Auchan LLC
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Dybenko St., 30, 403099 Samara, Russian Federation


Abstract. Evaluation of the key factors in the cost of industrial enterprise is an important tool not only for the valuation of the newly acquired companies, but also in assessing the choice of the best of the alternative strategies for the development of existing companies, since it allows to evaluate the performance of the enterprise in terms of maximizing its value. The authors study the mechanisms of allocating such factors on the basis of the indicator of added economic value, and on the basis of assessing the influence of the key factors on the cost of the business. The components forming the indicator of added economic value are presented as secondorder factors. Third-order factors reflect the influence of certain indicators of revenues and operating expenses of invested capital i.e. the elements of control by senior managers. The article highlights the performance of the third order, affecting the value of the business: operating profit (EBIT); cost of equity (Кs); value of shareholders’ equity (S); cost of debt (Кd); value of the borrowed capital (D). The article highlights the key value drivers of the company, which are interrelated parameters, which allow to valuate business and to manage its development efficiently. To form the economic and mathematical model of assessing key factors of company’s valuation, the authors used the mathematical apparatus of assessing the company’s value sensitivity to the mentioned factors. As a result, the authors developed a model assessing the influence of operating profit factor on the value of the enterprise.

Key words: business value, amount of invested capital, key cost factors, cost factors of first, second, third order, company’s operation activity, profit.

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Modeling of the Influence of Operating Income on the Value of Industrial Enterprise by Irina A. Kaluzhskikh, Veronika A. Zavarikhina is licensed under a Creative Commons Attribution 4.0 International License.

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