DEVELOPMENT OF AN APPROACH TO DETERMINING THE LEVEL OF CAPITALIZATION OF CORPORATE ENTERPRISES ON THE BASIS OF THE EVALUATION MECHANISM

Lіudmуla Zaіtseva () and Kseniia Sieriebriak ()
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Lіudmуla Zaіtseva: State Institution "Luhansk Taras Shevchenko National University", Ukraine
Kseniia Sieriebriak: Volodymyr Dahl East Ukrainian National University, Ukraine

Baltic Journal of Economic Studies, 2021, vol. 7, issue 4

Abstract: The purpose of the article is to substantiate the approach to determining the level of capitalization of corporate enterprises on the basis of the evaluation mechanism. In accordance with the set goal the following tasks were solved: to evaluate the possibility of applying the existing approaches to the capitalization assessment, to substantiate the approach to the capitalization assessment of the enterprise taking into account the factors of assessment quality, and to determine the ways of increasing the capitalization of corporate enterprises. Methodology. The methodological component of the study is the cost approach to assessing the capitalization of an enterprise. The proposed approach is based on the integration of private assessments of the enterprise value, including the use of financial statements, which makes it possible to identify areas to increase the level of capitalization at the expense of the enterprise's own efficiency. The method of dialectical approach in understanding the economic essence of enterprise capitalization through its general and specific functions, determining the directions of efficiency and tools to increase the capitalization of the enterprise. The results of assessing the level of corporate companies' capitalization serve as an information base for making managerial decisions on the choice of sources of increasing the market value in the future. Practical implications. The study used the method of comparison and generalization in assessing the level of capitalization of the enterprise. The information base of the study are scientific developments of Ukrainian and foreign authors on the assessment of the level of capitalization of the enterprise, the materials of Ukrainian stock exchanges and official publications of financial statements of PJSC "Ukrnafta", PJSC "Turboatom". Value / originality. The proposed capitalization assessment model takes into account the factors of quality assessment and makes it possible to form an information platform for investors on forecasts of return on invested capital and risk on their shares.

Keywords: capitalization; market value; cost approach; corporate enterprises; enterprise value; valuation quality (search for similar items in EconPapers)
JEL-codes: E22 G12 G31 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:bal:journl:2256-0742:2021:7:4:10

DOI: 10.30525/2256-0742/2021-7-4-85-90

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