Market capitalization modeling of petrochemical enterprises on the basis of multifactorial regression models

Abstract

© 2019, Research Trend. All rights reserved. Nowadays, the literature deals in detail with the analysis of the financial condition and the assessment of the company market value. However, the majority of authors consider these concepts separately, which does not allow making effective analytical decisions during the analysis of a company investment attractiveness. The article develops multifactor regression models that allow to obtain a quantitative assessment of closeness degree concerning the relationship between the indicators of company financial stability, profitability, turnover, liquidity and market value. The authors consider the company value as an integral indicator that can be used instead of an extensive set of financial ratios during the company financial position evaluation. Based on the econometric analysis of data from Russian petrochemical enterprises that meet the criteria of profitability, financial stability and maturity, the article draws conclusions about the possibility of practical application of the proposed models. In order to develop an empirical base of research, the data were collected on annual accounting (financial) statements for Russian companies in the petrochemical industry [2, 5]. The time interval from 2013 to 2018 was chosen for the analysis. A balanced sample of 16 enterprises was compiled. In order to perform in-depth analysis based on empirical data, we formulated and tested the following hypotheses. Hypothesis 1: The market value of a company has a significant relationship with profitability indicators. Hypothesis 2: Solvency indicators, which include current, intermediate and absolute liquidity ratios, have a positive effect on company capitalization. Hypothesis 3: The market value of a company has a significant relationship with financial stability indicators. Hypothesis 4: With turnover rate increase, the growth of the company capitalization is ensured. Hypothesis 5: The market value of a company has a significant relationship with the economic value added. Hypothesis 6. The market capitalization is influenced by external environment indicators such as the dollar rate, refinancing rate (the key rate since 2016), the price of Brent crude oil, the inflation rate and the industrial production index. According to the results of the performed analysis, not all hypotheses were confirmed. So, the influence of external factors, as well as solvency and turnover indicators on the company value turned out to be insignificant.