Ways to increase the value of a company. Measures to increase the value of an enterprise (business)

The value of an enterprise is influenced by external and internal factors. External factors include the prevailing conditions in which a business operates, independent of its management decisions: the prevailing economic, political and social conditions in the country and the world, changes in the markets for goods, services and labor, changes in legislative acts, changes in lending conditions. The enterprise's strategy for taking into account external factors consists of forecasting them, timely obtaining information and making management decisions to adapt to changed conditions.
Internal factors depend on the management decisions of the enterprise itself. These include the reorganization and restructuring of the enterprise, the introduction of new technologies and new products, adaptation to market conditions, the choice of sources of financing and investment in production, selection and work with personnel, and the creation of a positive image of the enterprise.

Among the factors that can affect the value of the enterprise and which, therefore, should be the focus of attention of management oriented to the growth of market capitalization, include:

Restructuring of the company's economic activities as a complex of investment innovation projects of the enterprise for the development of new products for it (including the development of those that are characteristic of other industries) and projects for the company's exit from the industry (i.e., discontinuation of production and sales of relevant products);

Increasing the company's property (assets);

Property synergy (asset synergy);

Company reorganization;

Increasing the company's information transparency;

The company pursues a stable (predictable) dividend policy;

Improvement of the company's current financial results and balance sheet structure;

Restructuring the economic activities of an industrial enterprise involves: (1) discontinuation of production unpromising(and, possibly, already unprofitable) types of products and (2) development promising(and perhaps not immediately profitable at first) types of products.

The positive impact of restructuring the economic activities of an industrial enterprise on the growth of its market capitalization, the advancing impact of the subsequent more or less likely increase in profits from newly developed products is therefore associated with the following points:

For each of the promising products newly mastered in production and marketing, it turns out that if, as a result of restructuring the economic activities of the enterprise, such a product just starting sell well (especially if the company enters new markets with this product), the market capitalization of the company, due to the positive expectations that arise for further sales and profits, grows much more quickly;

For each of the types of products being discontinued, it is necessary to work out an equally complex business plan for the liquidation of the previously operated business, which should also be a special investment project with capital investments in the disposal of special assets for the discontinued product and the return on these investments in the form of avoiding future continuation costs of maintaining these special assets.

In total - and taking into account the factors of time and risks - both of the points described above can give a positive overall result. In other words, successful restructuring of an enterprise's economic activities leads to an increase in its market capitalization.

The increase in the company's property (assets) most directly affects the company's market capitalization.

In fact, there is no doubt that the value of a company and its investment attractiveness are determined by the value of the enterprise's property.

In this case, property refers to both tangible and intangible assets.

Property synergy (i.e., the complementarity of newly acquired or internally created assets) increases the impact on the market capitalization of companies from the increase in their property.

This can be most clearly seen from how objects and intellectual property rights complement each other - in combination also with such an intangible asset as assigned, selected and trained personnel who are the bearer of the corresponding know-how. After all, it is when an enterprise can commercialize its research and development results, without fear of persecution from competitors regarding the dubiousness of intellectual property rights to commercialized research and development results, and relying on the experience, knowledge and skills of its own personnel, that it can receive the greatest profits.

Reorganization of a company as a factor in increasing its market capitalization (increasing its assessed value if the company is still closed) can:

Act as just a means of ensuring the company’s adaptation to the requirements of a large innovation project (when its implementation requires a corresponding change in the structure of the organization and management in the company), or

Serve as an independent tool for increasing the investment attractiveness of the enterprise.

Increasing the information transparency of an enterprise is the most important factor in maintaining and increasing the degree of liquidity of shares of public companies that have already managed to place their shares on stock exchanges (conducted the so-called IPO, initial public offerings, initial placements of additionally issued shares with inclusion in the listing of the stock exchange). In turn, the liquidity of shares contributes to the growth of the market capitalization of public companies, as it creates conditions for the presence of demand for their shares.

What is meant in this case, information transparency implies the publication (by any means - in the media, on your own website on the Internet, etc.) of information:

About the financial results of the company;

Her property status;

Investment projects where funds entrusted to the company are invested;

Owners of the company (including information about the owners of closed joint-stock companies and limited liability companies that may own stakes in public companies);

Business partners of companies, their participation in social programs, compliance with tax laws (the so-called social reporting, for which there are special standards in international practice).

The company's implementation of a stable (predictable) dividend policy seriously affects:

Market capitalization open companies, creating additional demand for its shares (and increasing their market price) on the part of minority shareholders who do not participate in the management of the company (a), do not have access to its internal information regarding draft decisions on the amount of net profits of the company allocated for dividends ( b), and, without also having access to the company’s internal information about its investment and innovation projects, they cannot predict future changes in the company’s market capitalization due to the influence described above on it of at least the first successes in these projects and, therefore, count on any reliable exchange rate income on shares owned by them (c);

Estimated market value of minority shareholdings in closed companies and, therefore, on the total estimated fair market value of these companies in conditions where minority shareholders in these enterprises, due to the illiquidity of shares of closed companies, do not have to rely on exchange rate income at all (for them, dividends from shares represent the only form of income from shares).

Improving the current financial results and balance sheet structure published by the company and establishing a system for publishing regularly adjusted forecasts of the company’s financial results for the near future allow open companies to achieve not only an adequate reaction of the stock market to their actually achieved results, but also a controlled reaction to those expected in the near future arrived.

All of the above factors that influence the market capitalization of public companies and the estimated value of closed companies, as indicated above, are objects of special attention for the management of enterprises, the owners of which focus it on managing the value of the enterprise and the growth of its market capitalization. Moreover, this applies to the greatest extent to the highest level of management, which is directly responsible to shareholders for the level of market capitalization of an open company or for the value of the estimated market value of a closed enterprise.

Recently, one can increasingly hear from financial and general directors, as well as from owners, that a significant part of their efforts is aimed at managing the value of the company. However, as practice shows, these statements differ significantly from reality. We will identify and analyze the key factors influencing the value of the company and the associated work priorities.

Typically, an attempt to manage a company's value begins with the study of numerous complex mathematical models for its valuation. They can be used, but not all stages of company development are suitable for this.

Factors of company value

First of all, it should be noted that the value of a company exists only during the period when an investor appears who is ready to buy it in whole or in part. Until this moment, the value of the company is some kind of abstract value. Once a buyer appears, the company is assessed simply:

FV = PV + P

where FV is the future cash inflow, PV is the current value of the company, P is the buyer's premium.

The investor wants to make a profit, and the seller promises that the company will generate the cash inflow necessary for this in the future. However, there is a risk that such inflows will be less in the future, and the investor requires a discount to the value of the company that will cover such a risk (to balance the formula). The concept of a discount arises, which the company’s financial director should try to minimize while simultaneously increasing future cash flow. If we express the buyer's premium in proportion to the current value (K = P: PV), then the current value of the company can be represented as:

PV = FV/(1+K)

This means that in order to increase the value of the company, it is necessary to increase the numerator (which is profit and incoming cash flow) and reduce the denominator (which is the risk of not making a profit in the future).

All factors influencing the growth of a company’s value can be divided into two groups: objective (fundamental) and subjective (transactional). Subjective factors include:

• the class of investor who is trying to value the company (portfolio, strategic, or equity lender);
• structure of the transaction (sale of part or all of the company, presence of debt elements in the transaction (mezzanine), cash in / cash out proportion);
• market condition (growing or falling) at the time of preparation and execution of the transaction;
• rumors about the company on the market;
• similar transactions in the country;
• the number of investors participating in the transaction (one or several, which creates competition among them), etc.

These factors are difficult to systematically manage at any stage of the company’s development, but they can be influenced when preparing for a specific transaction, and for the financial director this is a project-based task. In current activities (outside of preparation for a transaction), it is necessary to focus on the fundamental factors of the company’s value, which will be discussed further. Thanks to this data, you will learn how to increase the value of the company and manage its value.

So, the fundamental drivers of value need to be determined through the eyes of investors because, as mentioned, a company's value only exists when someone is willing to pay it. And if the company’s management tried to invent its own unique approach to assessing value, after the start of negotiations with the investor, it discovered a lot of new things.

1. Revenue or EBITDA. For an investor, as a rule, revenue is only an indicator of the scale of the company when choosing candidates for purchase (if it is not an Internet startup), whereas when assessing value, EBITDA is more important.
2. Capital or its value. The investor is not very interested in complex calculations of the cost of both equity and debt capital. Of greatest importance is the availability of capital and debt, as well as the size of the latter. He knows his desired rate of return without unnecessary mathematical models.
3. “How” is more important than “how much.” Since the investor wants to understand the sources of income and profit, the value chain, a consolidated report signed by renowned auditors is not enough. Therefore, detailed management reporting will have to be demonstrated.
4. The opaque structure of the company is worse than the numbers. The investor wants to see a transparent ownership structure, compliance with the functional, financial and legal structures of the company.
5. Management team. The investor wants to see in the company an independent management team that understands and is capable of actively developing the business and adequately assessing the financial efficiency of its divisions.

The listed points, which the investor will pay attention to first of all, show that superficially grooming a company for a deal does not allow systematically improving the fundamental factors of value and creating the value of the company practically from scratch.

The value of the company and priorities in the work of the financial director

As a CFO with many years of experience, I would highlight five key priorities in the work:

• management of the company structure: financial, functional, legal structures must correspond to each other;
• cash flow management: strictly separate operating, financial and investment cash flows, do not finance investment expenses at the expense of current operating cash flow; control payment discipline, working capital, accounts receivable;
• managing the financial literacy of managers: they must use the management reporting provided to them by the finance department, as well as understand and manage their financial performance;
• managing the financial model of a business: analyzing the structure of income and expenses (where they arise, what parts make up the consolidated result); identify key drivers of income and expenses, performance metrics; manage the structure and speed of preparation of management reporting; separately manage the structure of operating and investment expenses, as well as the structure of debt (short-term and long-term debts);
• management of the efficiency of indirect expenses: control the persons responsible for them, back functions (there is always a hidden reserve of efficiency in them), as well as the efficiency of the financial department (productivity, qualifications, cost and quality of work).

Where and how to start? The main tools are always at the forefront: the financial structure of the company, management reporting, budget. But before we delve into the details, it is worth highlighting an important practical observation that is associated with the various stages of company development. The success of using any tools is always related to how appropriate they are at a given time in a particular place. At the same time, any company in the process of its development goes through certain stages of evolution, which are quite accurately described by E. Emelyanov and S. Povarnitsyna in the book “Business Psychology”: “get-together” (creation, growth), “mechanization” (standards, increasing the scale of business, regular management), “internal entrepreneurship” (delegation of authority, decentralization, local qualifications of employees) and “quality management” (ideology of the “internal client”, performance indicators come first).

Based on such a model, using practical experience, it is possible, in the form of several diagrams, to offer your view on the stage of development of a domestic company, both in general and in terms of financial management, which is important within the framework of the topic of value management (see diagram 1).

If the company is at the first stage of evolution, cost issues are not yet relevant for it. But this statement is true if the entire company is at this stage. However, in modern practice, divisions of holdings are at different stages of development. In this case, for some of them the proposed solutions are in demand.

So, the most important tool of the financial director is the financial structure of the company, the main elements of which are:

• profit center (CP) - a division or group of divisions responsible for income, all expenses and net profit;
• income center (RC) - a division or group of divisions responsible for income, part of expenses and any intermediate financial result. Part of any CPU;
• cost center (CC) – a division or group of divisions responsible for any expenses. They are part of the CPU and may be part of the CD.

Such a structure allows you to clearly determine who earns what income, incurs expenses, as well as where income and expenses arise and what makes up the EBITDA indicator of the entire company. After all, many managers are familiar with the situation when employees are registered in one department, but are responsible for the income and expenses of other departments, while they are registered in different legal entities, and the expenses for which they are responsible belong to other companies. Of course, changing the places of the terms will not change the financial result, but it is almost impossible to effectively manage such results.

Financial, functional and legal structures.Compliance of financial, functional and legal structures is the most important factor in business transparency. In practice, it is convenient to use the “structure correspondence matrix” (see Table 1), which at the initial stage allows you to compare them in order to manage financial indicators, and at subsequent stages - to obtain an algorithm for how to reorganize the functional and legal structures so that the business model is most transparent. By filling out such a register, the financial director can find many pitfalls and questions, the answers to which will allow him to form a new look at processes, the occurrence of unnecessary expenses, transaction costs, etc. For example, having generated a series of summary tables based on such a register, you may find that some divisions or line managers are ownerless, that is, it is not clear who their leader is, some of the “indirect” expenses are of a historical nature, and many technical intragroup operations require assessing effectiveness and feasibility. For the purposes of managing business value, the focus should be on building a financial structure formed by profit centers, which in turn include income centers and cost centers.

Structuring the company's indirect costs. Many managers are familiar with another situation when department heads do not understand where certain expenses come from in the final profit and loss report. At the same time, department heads in reality do not have the ability to manage these expenses. This problem can be solved using a consolidated matrix of income and expenses (see Table 2). In the proposed example, profit centers are structured by columns, and within them (intermediate columns) – income centers and cost centers. All possible items of income and expenses of the company are located along the lines. In addition, within each accounting center, two columns are introduced - internal and external calculations. Those incomes and expenses that arise in settlements between departments are internal, the rest are external. Here are a few examples that detail the capabilities of this model.

1. A company at the second stage of development (rapid growth) is passionate about active territorial expansion in a growing market, therefore it must have resources in reserve, ensuring an increase in scale. It is advisable to create budget items with limits at the corporate center level in order to quickly provide support to new divisions. To do this, under the corresponding article within the financial structure, responsibility is transferred to such a cost center in the management company. These could be infrastructure costs, costs for some functional employees, etc.

2. The company is at the third stage of development, that is, it is busy increasing efficiency. Using the matrix, you can revise some articles, transferring them to the responsibility of the relevant departments.

3. The company consists of many branches located in different cities. If each branch is a profit center, then it should be responsible for net profit, but in this case it is not always clear how to distribute indirect costs. It may be more effective to form several divisions (groups of branches), each of which should be made a revenue center, and at the division level, a cost center will be formed, to which the indirect costs of the division will be transferred. This is because in practice, often after the distribution of indirect expenses, the branch becomes unprofitable (without these expenses it remains profitable). If the branch is closed, the volume of indirect expenses of the division will not decrease or will decrease disproportionately. This means that either the division’s administrative and management resources allow it to manage a large number of branches, or indirect costs require revision. But it does not mean the need to close the branch.

4. It is not always advisable to split expenses finely between departments, since a conflict arises between the level of responsibility of the department and the efficiency of the enlarged budget. In practice, there was a situation when, at the level of the entire holding, the statistical share of marketing expenses as a percentage of gross profit was derived. When the budget began to be divided among regional offices, some received excess amounts, while others received insufficient amounts to organize effective events. But nevertheless, the consolidation of offices into groups for which the budget was centralized (divisions, country) made it possible to obtain adequate limits.

Structuring reporting. Once the target financial structure of the company has been determined, the functional and legal ones have been compared, it is necessary to structure the corresponding management reporting. This task must be divided into four blocks:

• formation of a register of key control indicators (indicator, calculation algorithm, what question is answered, what shows, according to which accounting center of the financial structure it is formed, who is responsible for it);
• formation of a reporting catalog (reporting forms, the accounting center used to generate it, the responsible manager, that is, the user of the report, frequency of submission);
• formation of consolidated reporting (its forms, formation of consolidation groups by financial and legal structures, detailed comparison of consolidated management reporting and RAS);
• automation of reporting.

Such tasks are applicable both for the initial stage (if there was no reporting) and for systematizing existing reporting. In practice, such structuring makes it possible to exclude unnecessary or duplicate reports. Often in different companies it was possible to observe a situation where up to 50 percent of the reports prepared were never used or looked at formally, according to the “yes/no” principle. And one more important rule when preparing reports: investment expenses should be highlighted and reflected separately in the consolidated statements, even if they are not such from the point of view of RAS. Because when you, as a CFO, have to argue with an investor, it will be important to prove adjusted EBITDA.

Budgeting as a factor in increasing the value of a company

Budgeting remains an important financial management tool. The question is how to build a process so that it becomes a factor in increasing business value. I propose to look at the model of the evolution of the planning system in accordance with development life cycles (see Diagram 2). Budgeting needs to be implemented progressively as the company develops, and the ultimate goal is for plans to become a flexible, decentralized tool and only target performance indicators are approved. But to do this, it is necessary to go through the stage of primary budgeting - to teach managers to count money, gradually breaking down the budget into operational indicators (drivers) that affect income and expenses. Ultimately, the financial plan must evolve into a financial business model with control over statistics of indicators.

It is worth making an important note: the structure of budget forms containing financial indicators must exactly coincide with the structure of the corresponding forms of management reporting. Try an experiment: open the profit and loss report of any division of the company and its budget of income and expenses. Count the number of columns and rows in the reports, check the names. If you find at least one discrepancy, you have something to work on.

To improve the financial condition and improve the organization of the equity capital of the analyzed enterprise, the following recommendations have been developed.

According to calculations, OAO TATNEFT is experiencing a decrease in the size of its own working capital, which is due to the high growth rate of the company’s non-current assets due to investments in fixed assets.

At the same time, the main source of financing these expenses is the company’s retained earnings, since OAO Tatneft is reducing the volume of attracting long-term loans - by 37.7% in 2013.

Accordingly, a reduction in the volume of own working capital and the size of long-term liabilities leads to a reduction in future cash receipts, on the basis of which the future value of OAO TATNEFT is assessed.

Accordingly, in order to increase the value of OAO TATNEFT, it is necessary to ensure an increase in the size of its own working capital by increasing long-term liabilities at a rate that would correspond to the growth rate of non-current assets or exceed them.

To do this, we will calculate the required volume of attracting long-term loans, ensuring an increase in the size of our own working capital.

In 2013, the increase in non-current assets amounted to 35,841 million rubles, while the reduction in the amount of own working capital was 15,255 million rubles, and the reduction in long-term liabilities was 26,902 million rubles. Considering that a change in the volume of long-term liabilities directly affects the size of own working capital, a less significant reduction in own working capital was the result of an increase in own funds and accounts payable of OAO Tatneft for a total amount of 12,880 million rubles.

Accordingly, the volume of attraction of long-term loans required to level out the impact of the growth in capital investments is an amount equal to the ratio of the volume of reduction in own working capital and the increase in non-current assets - that is, this is exactly the share of newly acquired non-current assets that should be financed through long-term loans:

35 841 / 15 255 *100 = 42,56%

Accordingly, the forecast change in long-term sources of financing must be adjusted by this amount, as a result we obtain the following forecast indicators of long-term liabilities (Table 13)

Table 13

Forecast of changes in long-term liabilities during the implementation of measures to increase the value of JSC TATNEFT

From the presented table it is clear that due to the application of the recommendations, the volume of long-term liabilities will remain in the range of 42,500 - 50,032 million rubles, whereas during the initial calculation its value was reduced to the level of 6,559 million rubles.

Now, let’s adjust the calculation of the volume of own working capital according to new data on changes in long-term liabilities, using previously calculated individual forecast values ​​of NPV indicators, as well as changes in sources of own funds for the volume of net profit of the previous year (Table 14)

With the development of a market economy in Kazakhstan, it became possible to invest money in a business, buy and sell it, i.e. business has become a commodity and an object of evaluation. Valuation is necessary for corporatization, reorganization, development of enterprises, use of mortgage lending, and participation in the stock market.

The results of the cost assessment affect almost all indicators of the enterprise. To achieve success in the activities of any company, a manager, when making every serious management decision, must calculate whether its implementation will increase the value of the company. In the West there is an axiom: “It is necessary to use enterprise value assessment to make better management decisions”; In Kazakhstan, this approach is still being intensively studied, but in practice it is used extremely rarely.

Usually, to improve the quality of management, individual structural divisions, processes, types of products, and areas of activity are analyzed, while it is necessary to study the entire structure as a whole, taking into account external and internal relationships. An enterprise is a complex system that uses economic resources (labor, natural and financial), changing in relation to the types of products (works, services), methods of its production and sale. It is possible to analyze simultaneously all components of the structure based on an assessment of the value of the enterprise (business).

In a condensed form, the essence of the concept of enterprise value management comes down to the fact that from the point of view of shareholders (investors) of an enterprise, management should be aimed at ensuring growth in the market value of the enterprise and its shares, since such growth allows shareholders (investors) to receive the most significant value for them. Compared with its other forms, income from investments in an enterprise is exchange rate monetary income from the resale of all or part of the shares they own, or exchange rate non-monetary income, expressed in an increase in the value (value) of net assets owned by shareholders, and therefore the amount of their own capital. An increase in the value of net assets corresponds to an increase in the value of both the enterprise and its shares. Therefore, in the concept of enterprise value management, emphasis should be placed on the growth of the enterprise value: “Enterprise value management comes down to ensuring the growth of the value of the enterprise and its shares.”

In a market economy, more and more domestic enterprises are paying attention to the economic strategy of their development. Changes in the market economy make the need for strategic choice obvious. A well-formed strategy allows an enterprise to reliably assess the economic opportunities for its development and growth and concentrate strategic resources on the most promising areas of its activities.

Therefore, there is an urgent need to develop theoretical and methodological approaches to the development of managerial impacts on business when using an assessment of the value of an enterprise (business) as the main criterion for the effectiveness of management based on evaluative management, value-oriented management.

Valuation of an enterprise's business is a set of measures necessary to determine cost indicators, which can subsequently be taken as the price of the enterprise as a product. A business assessment allows you to determine the extent to which the company’s services, products, and overall activities are in demand.

In this work, to determine the market value of an object, we reviewed and used methods widely used in valuation practice and procedures recommended by international valuation standards.

There are three approaches to assessing the value of assets: income, comparative and cost.

According to the income approach, the value of an asset is determined by its expected earnings. Two common methods of the income approach are the direct capitalization method and the discounted cash flow method.

When using the capitalization method, annual income is divided by the capitalization rate to obtain the value of future earnings. In this case, profit before or after taxation is most often taken as income. The capitalization rate must be consistent with the definition of income used.

The discounted cash flow method calculates the expected future cash flows available for distribution to investors and then converts them to present value using a discount rate that reflects the risk of those cash flows.

The comparative (market) approach is based on the assumption that the value of assets is determined by the price for which they can be sold in the presence of a sufficiently mature market. The comparative approach is based on the assumption that completed transactions are the result of judgments of buyers and sellers regarding the value of objects and contain information indicating their market value. In the process of comparative analysis, the prices of objects similar to the one being valued are adjusted for differences in the main characteristics between the object being valued and the analogue object.

The cost approach includes assessing the cost of reproduction/replacement of an object and determining various types of wear and tear: physical, functional and external.

The choice of business valuation method directly depends on the purposes for which it is carried out. For the purpose of managing the value of a company, several valuation methods and, accordingly, several value indicators can be used. These indicators are not subject to integration; they are analyzed separately, compared with each other and used to make various management decisions.

The property complex owned by Xxx LLP (assets arriving in the future) was calculated using the cost approach based on concluded contracts and the income approach as income-generating property (based on the discounted cash flow method).

The value of the subject property was determined in terms of its highest and best use.

To determine the relative weight of each assessment method, the following factors must be taken into account:

• the purpose of the assessment and its intended use;
• quantity and quality of data supporting the method.

Taking into account all these factors makes it possible to weigh and ultimately draw a final conclusion.

To determine the final value of the valuation object, the advantages and disadvantages of each valuation approach were analyzed and assessed.

From a comparison of the approaches considered, it is clear that there is no ideal approach to determining market value. An indicator of the applicability of various methods and procedures to assessing market value is the way in which property circulates on the open market. Any method based on market information is inherently comparative.

Therefore, after assessing the object (business), it is necessary to coordinate the results. Reconciliation is a process in which certain logical judgments are made to arrive at a final estimate of value. Before starting, it is necessary to consider all the facts and check the accuracy of the calculations. All assumptions are checked for reasonableness and reliability. In this case, it is necessary to decide on the situation - to choose which approach to valuation will be fundamental, having the greatest weight in making the final decision on the value of the object being valued, and which two other approaches will be required to guide the appraiser, to help in his logical reasoning.

This approach can and should act in a number of cases as the main one, but it has significant limitations in the application and interpretation of the results. It should be noted that, subject to the necessary conditions of application, the results of calculations within the framework of the income approach serve as a guide for a potential investor (buyer).

The results within the cost approach are static. They do not characterize the investment attractiveness of the enterprise and the prospects for operating the property being assessed as an operating business.

Based on the fact that the objective determination of the market value of a property complex is the cost approach to valuation, the value was determined using the cost approach.

We also used the income approach to determine the market value (discounted cash flow method), which takes into account the expected benefits. As a basis for calculating the cost using this method, we calculated income from production activities on the basis of the property complex of Xxx LLP.

We considered the sales comparison method unacceptable, since the analysis of market information did not reveal reliable verifiable data.

As of the date of assessment, no enterprises of a similar level, with similar characteristics of equipment, production process and technologies used were identified. There was also no information on sales of buildings similar to the property being assessed in size and design features, on the basis of which a reasonable market value could be empirically determined.

And the fact that the method of comparative sales analysis can only be applied in the case where a developed market provides an influx of a significant amount of information on similar objects does not allow us to evaluate the object using this approach in evaluation.

To finalize the assessment results, it is necessary to assign weights to the assessment results obtained by each approach. Weighting coefficients show what proportion of the value obtained as a result of using each of the applied valuation methods is present in the final market value of the property being valued (taking into account the purposes of the valuation).

The value obtained using the discounted cash flow method opens up the prospect of successful further financial and economic activities, and the company shows how much profit the company will receive, how various external market factors will affect the amount of cash flow. This method was given the greatest weight as reflecting the potential of the company and the possibility of using it to generate income. At the same time, factors such as contract-confirmed selling prices for products sold and the presence of demand for electricity in the region were also taken into account.

The income approach is the best for assessing the value of commercial real estate, as well as enterprises as property complexes. Income valuation is based on the assumption that the value of the property is equal to the current (today's, present) value of the rights to future income; it reflects the possibility of generating income from the operation of the property being valued.

Investments in a business are maximally profitable only if you objectively assess its value and make efforts to grow it. This task requires the use of approaches from a new management concept - value based management (VBM).

This concept appeared in the 1980s. in USA. It involves assessing all decisions of the company’s management from the perspective of their impact on its market value. This is necessary for investors and owners who need to know the value of their business in order to understand whether it is worth investing in it.

The practice of value management has changed significantly in recent years. In the early 1980s. it consisted of determining various indicators (“economic profit” and “residual profit”), including the “price” of capital of each business. These indicators reflected unprofitable areas of capital investment within the company.

Cost-based measures were objective, but did not provide sufficient information for future investments to introduce new products or enter new markets where profits and capital required were unknown. To solve these problems they needed more than these metrics; they needed an approach that linked long-term strategy to capital investment planning.

This became possible in the late 1980s. with the emergence of the VBM discipline - value-based management. VBM integrated corporate finance and business strategy to form an economic framework for evaluating business investments. It allows you to understand what drives financial performance and inform financial forecasts.

In the 1990s. This management concept began to be applied in Europe and Asia, and then by large Russian companies that sought to meet the requirements of a foreign investor.

VBM is a new management concept, the increased interest in which is due to several reasons. The first group of reasons is associated with increased business dynamism and a sharp increase in the role of intellectual resources as an advantage in competition. The second is related to increased competition and the need to satisfy the interests of all stakeholders (consumers, suppliers, government agencies and company personnel). This is the foundation for long-term planning. The third group of reasons is based on the relationship between owners and managers, the imbalance of their diverse interests, and the shift in actual control over the business from the owner to managers. Interest in VBM is explained by the ability to analyze and evaluate the performance of an enterprise, taking into account changes occurring in the business environment.

The main provisions of VBM can be presented as follows:

The main goal of strategic management is to maximize business value;

Value is most closely related to the cash flow a business generates;

The main criterion for management effectiveness is the increase in business value.

In its classical form, the VBM model is described in the works of T. Copeland, T. Koller, D. Murrin and is presented in Fig. 3.1.

Figure 3.1 - VBM model in classic form

Actual cost - estimated using the discounted cash flow method.

Potential value taking into account internal improvements - financial analysis of the company, identification of cost factors, formation and implementation of a strategy for increasing value.

Potential value, taking into account internal and external improvements - the use of external restructuring (purchase of a company, merger, sale or liquidation of divisions, creation of joint ventures).

Optimal restructured value - financial restructuring (making decisions regarding debt management, increasing equity, converting debt to equity).

The actual value of discounted cash flows is equal to the current market value of the enterprise. The discrepancy between these values ​​requires certain measures.

If the current market value is less than the actual value of cash flows, then it is advisable to improve interaction with the market to increase market value or buy back shares. Otherwise, the discrepancy may indicate that the company needs to improve its asset management.

Eliminating the negative gap between costs is possible through internal improvements, for example, increasing the rate of profit from core activities, accelerating sales growth, and reducing the required working capital. Given favorable strategic and operational opportunities, an enterprise can realize its potential value through a portfolio of assets. This stage of cost management is carried out after analysis and identification of cost factors based on internal audit and analysis of financial and economic activities.

So, the main goal of value-oriented management is to minimize the gap between the restructured and current value in the interests of owners in a competitive market.

Cost management is a long and complex process that requires managers at all levels of the organization to change their management approaches. Managers study cost management tools and cost drivers, then explore new approaches in more detail. Once the results of using value management tools are understood, the management team can switch to value-based incentive systems.

Istraproduct LLC strives for high results. Management carefully summarizes the company's performance, comparing them with the performance of competitors, as well as with its own results for different years to assess progress.

However, the company's decision-making process is not based on value. The company is focused on meeting the target indicators of its core activities. The management of the enterprise successfully increases profits to the detriment of the long-term market position of the enterprise (at the expense of necessary expenses). Understanding the imprudence of such a position for the near future, managers of Istraproduct LLC must implement cost management and accept the cost of the business as the main indicator of their performance results. At the same time, it should be understood that cost management must take into account the assessment of results and cover all aspects of activity, including the lowest level of decision-making.

We can highlight the key factors for the successful implementation of a cost management system at Istraproduct LLC:

Assisting managers in accepting business value as the main indicator of company performance;

Strengthening connections between lower and upper levels of management by introducing a system of cost factors for each level;

Retraining of personnel, training them in the principles of business value management;

Integration of cost management approaches and principles into the planning process;

Linking the company’s personnel motivation system with the creation of enterprise value;

Providing the necessary information (balance sheets of business units, comparable external data);

Availability of uniform and easy-to-use reporting forms and valuation models that facilitate the work of managers;

Introducing a cost approach into strategic decisions and using financial and strategic information to create greater company value;

Assessing capital and personnel needs based on enterprise value;

Application of an early warning system for negative, destructive processes at different stages of management from the perspective of a business value criterion.