№ 3/2018

Fìnansi Ukr. 2018 (3): 116–128

FINANCES OF THE INSTITUTIONAL SECTORS

MYSAKA Ganna ¹, DERUN Ivan ²

¹Taras Shevchenko National University of Kyiv
²Taras Shevchenko National University of Kyiv

Determination and evaluation of indicators of company investment attractiveness based on financial statements

The article deals with the systematization of approaches to determining company parameters in terms of its investment attractiveness. The critical analysis of those approaches allows identifying the reasons that hinder a company’s evaluation based on its financial statements indicators. The purpose of the article is to provide a theoretical reasoning, development and testing of the evaluation model of company investment attractiveness using its financial statements data, which is necessary for the stakeholders to make management decisions. The research embraces methods of accounting, econometrics and financial analysis. The authors point out that the level of a company’s market capitalization, including its net assets (or equity), internally generated goodwill and market expectations regarding the prospects of securities attractiveness, is the most objective company indicator in terms of its investment attractiveness. That is why the authors opts to estimate investment attractiveness by Tobin’s Q ratio, which takes into account both the company’s market capitalization and the book value of its net assets. The proposed econometric model, evaluating investment attractiveness, encompasses the following factors: the equity-to-debt ratio, the return on net intangible assets, the share of goodwill in intangible assets, the share of R&D costs in operating expenses and the return on equity. Financial statements data of 44 transnational corporations for 2012-2016 is used for the model affirmation. In the conclusion based on the obtained results, the authors prove that a company’s investment attractiveness is most sensitive to the changes in the level of funding for research and development, which is an integral part of its internally generated goodwill and business reputation.

Keywords:R&D costs, internally generated goodwill, business reputation, investment attractiveness of a company, Tobin’s Q ratio, market capitalization, financial statements

JEL: G32, M21, M41

Mysaka G. . Determination and evaluation of indicators of company investment attractiveness based on financial statements / G. Mysaka, I. Derun // Фінанси України. - 2018. - № 3. - C. 116-128.

Article original in Ukrainian (pp. 116 - 128)

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