THE DIAGNOSIS OF THE ENTERPRISE VALUE CRISIS AND THE PARTICULARITIES OF ITS MANAGEMENT

Iurie Be?liu ()
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Iurie Be?liu: National Institute for Economic Research of the Academy of Sciences of Moldova and Ministry of Economy, Republic of Moldova

Contemporary Economy Journal, 2018, vol. 3, issue 4, 148-157

Abstract: The practice of developed countries demonstrates that value has a number of unique properties that make it the best decision-making criteria for crisis management and, in abroader sense, the best criterion for assessing the success of enterprise management in general. The global economic crisis, the fragility of enterprise value in the current economic context, and the ongoing diversification of value creation sources served as a basis for researching the mechanism of diagnosing the enterprise value crisis. The mechanism is based on the internal factors of the enterprise environment, i.e. the financial factors, and is detached from the macroeconomic environment in which the enterprise operates. According to the author, the diagnosis of the crisis situation aims to establish the moment when the company starts to lose its value, which is a premature signal of the enterprise's crisis. Therefore, the diagnosis of the enterprise's crisis-entry process is carried out in two ways, which are based on enterprise valuation methods and the economic profit indicator. In the research, the author studies the particularities of the value crisis management according to the stage of life cycle. For crisis management, the author examines the enterprise based on three financial dimensions: liquidity, risk and value, and determines the vectors of decisional efforts at different stages of the life cycle.

Keywords: enterprise value; value-based management; crisis diagnosis; diagnosis of the enterprise value crisis; enterprise value management (search for similar items in EconPapers)
JEL-codes: G32 (search for similar items in EconPapers)
Date: 2018
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