A diagnostic approach to corporate sustainability based on normalized net margins and extended present value

Marco Desogus and Elisa Casu

MPRA Paper from University Library of Munich, Germany

Abstract: Relying on indices and ratios for rigorous deterministic valuations entirely, present analysis models often fail to clearly and logically represent diagnoses of companies and the outcomes of transactions conducted in risk capital markets, particularly banks and other credit entities. Focusing on interactions between money, credit, production and income mechanisms, we propose alternate method for assessing businesses and determining their value at a certain time and the relative probability of insolvency. Replacing the static measures under which companies are normally evaluated, the method we propose outlines mathematical measures that normalize expected flows, positioning them against ‘extended present value’ to deepen the significance of income aspects to financial assessments.

Keywords: portfolio analysis; risk management; business crisis; products-markets matrix; strategic planning; present value (search for similar items in EconPapers)
JEL-codes: G32 M21 O16 (search for similar items in EconPapers)
Date: 2019
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Published in International Journal of Financial Management 2.9(2019): pp. 8-16

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:114363

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