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Methodological aspects of evaluating a company’s investment attractiveness

Journal: RUDN Journal of Economics (Vol.29, No. 1)

Publication Date:

Authors : ; ;

Page : 114-125

Keywords : leverage theory; systematic risk; operational risk; non-operating risk; financial risk; key financial multipliers; investment attractiveness;

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Abstract

The actual problems of choosing tools for risk assessment and predicted profitability (attractiveness) of an investment object are studied. There is a close relationship between the financial multipliers DIV/FCF, P/E Shiller, EV/EBITDA and risk indicators, which gives the investor the opportunity to make additional operational forecasts when analyzing an investment project. A number of key financial multipliers (P/S, EV/S, P/OCF, P/FCF) have been identified, and it is not entirely correct to use them as criteria for making an investment decision. The expediency of using the EV/EBITDA multiplier for making forecasts about the volatility of the return on shares of a certain company is justified, since this is the only indicator among the financial multipliers selected for analysis that has a relationship with the beta coefficient. Recommendations for forming a sample of necessary indicators (multipliers) when making investment decisions by various stakeholders are proposed.

Last modified: 2021-03-24 04:47:50