A Study of the Impact of Value-Added Efficiency on Profitability and Market Value in the Indian Pharma Industry

The aim of this paper is to highlight the growing influence of Intellectual Capital (IC) on the profitability and market valuation, especially in knowledge-based industries. The scope of this paper is restricted to the Indian Pharmaceutical Industry, which is highly dependent on IC. This study employs the measure of Value-Added Intellectual Coefficient (VAIC) to assess impact of IC on the profitability and market valuation and to assess the growth of VAIC and its components among the companies over the years selected for the study. The study uses 22 Pharmaceutical companies listed in the Bombay Stock Exchange for a period of 12 years from the financial year 2008-09 to 2019-20. By using Path Analysis, the study demonstrates that the components of VAIC have an impact on the ROCE and market value, which has only grown as compared to earlier studies & years. The study also demonstrates that high sales and profits need not necessarily result in high VAIC. Received: 7 October 2021 / Accepted: 24 November 2021 / Published: 3 January 2022

Market valuation of the world's leading public oil and gas corporations as an indicator of investment attractiveness of domestic vertically integrated companies

Subject. This article explores the market valuation ratios of the twenty five leading listed oil and gas companies between 2006 and 2018. Objectives. The article aims to identify key trends in the changes in market valuations of the largest listed oil and gas companies, and identify the factors that have caused these changes. Methods. For the study, I used comparative, and financial and economic analyses, and generalization of materials of the companies' consolidated financial statements. Results. The article shows certain changes in the main indicators of market valuation of the leading listed oil and gas companies and identifies the main factors that contributed to these changes. It establishes that the most significant for comparison and valuation are ratios based on balance sheet values of assets and equity, and net sales, EBITDA, DACF and net income ratios are appropriate as auxiliary ratios. The article says that the exchange segment of the industry has increased the debt load, so instead of market capitalization as a component of the coefficients of this group, it is advisable to apply the enterprise value indicator. Conclusions and Relevance. The article concludes that the market sentiments towards the stock market segment of the global oil and gas industry are getting impaired. This is quite natural against the background of falling profitability of most leading companies. The results of the study can be useful in evaluating, forecasting and developing measures to increase the market capitalization and value of listed oil and gas companies.

Value relevance and market valuation of assets measured using IFRS and US GAAP in the US equity market

Purpose Studies show firms reporting using Generally Accepted Accounting Principles in the United States (US GAAP) and International Financial Reporting Standards (IFRS) are similarly valued in the market, however, these studies are limited due to the noise present in international studies from regulatory differences. This study aims to eliminate much of this noise by using a cleaner sample of all listings with the Securities Exchange Commission (SEC). This paper also looks at more detailed book value figures. Design/methodology/approach There have been previous studies on the differences in market valuation of firms reporting using IFRS vs US GAAP. Most of this research is confounded with difficulties due to different regulatory environments and volatile time periods. The study uses cleaner data following the SEC’s acceptance of IFRS financials without a 20-F Reconciliation. The authors use a large sample of non-US firms trading on US exchanges choosing to use either US GAAP or IFRS for SEC reporting purposes. The sample period starts two years after the SEC’s acceptance of IFRS financials without a 20-F reconciliation and is larger than earlier samples. Findings The authors show that there is no difference between IFRS and US GAAP firms’ overall value relevance, however, earnings are more value relevant when measured using IFRS and book value is more value relevant when measured using US GAAP. The authors find that the difference between US GAAP and IFRS can be explained, at least in part, by greater market multiples being placed on inventories and goodwill using US GAAP. This is offset in part by greater multiples being placed on other assets under IFRS. Originality/value The authors replicate earlier studies but also extend with a better sample and more detailed finings.

Internalizing CO2-Equivalent Emissions Issued From Agricultural Activities

The aim of this article is to consider the market-based instruments, such as the ETS system, for the internalization of the CO2-equivalent emissions issued from the agricultural sector. We use a hypothetical market valuation of the emissions and we extend the analysis to the optional pricing with double barriers. According to our results, the purpose of attaining the levels of carbon emissions recommended by the French public authorities, with a level of reductions down by 50.00% in 2030, could be successful would the terminal range of optional prices stand between 76.35 and 89.56 Eur.

What Drives Growth: Analyzing Quantitative Factors and their Variation across Sectors

Value investing is often considered the antithesis of growth investing. However, core to any value investing strategy is an intrinsic valuation, typically calculated using a DCF analysis. One of the most sensitive DCF assumptions is the estimation of a company’s long-term cash flow growth rate. Thus, understanding a company’s growth potential is a vital component in any value thesis. This paper attempts to create a quantitative model to help predict a company’s long-term cash flow growth rate (using EBITDA growth as a proxy for cash flow growth) and to find the strongest indicators for a company’s growth potential by sector. To do so, this study analyzes variables pertaining to operating efficiency, risk metrics, market valuation, corporate investment levels, and the competitive landscape for S&P 500 constituent companies. While all categories contributed at least one statistically significant variable, the market valuation and corporate investment level categories had the highest volume of significant variables. The results show that widely used quantitative metrics can help predict a meaningful portion of a company’s five-year EBITDA growth rate when analyzed on a sector-by-sector basis. Furthermore, both the types of variables and predictive strength of the model varies widely across sectors. In practice, analysts should prioritize different ratios, metrics, and quantitative variables based on the target company’s sector when estimating the trajectory of a company’s long-term growth rate.

Egypt's tech pioneers aspire to a global role

Significance These came after leading fintech firm, Fawry, achieved ‘unicorn’ status in August 2020 with a market valuation over USD1bn, and after transportation app Swvl announced plans to list on the Nasdaq. These deals highlight Egypt’s attraction for investors, owing to its large market, strong growth potential and close ties to financial and talent centres in the Gulf. Impacts Communications will remain the fastest-growing sector of the Egyptian economy in the coming years. Investment in upgrading the fixed mobile network is rising, but with input from the military. Tech-based services catering to women will have a substantial market.

The Impact of Financial Leverage on a Company’s Market Valuation

The purpose of the article is to examine the impact of leverage on the market valuation of companies. The article verifies two hypotheses: 1. the degree of leverage is an important factor that impacts the market valuation of companies; 2. for companies with a high level of leverage, the impact of this leverage on their valuation is negative, and for companies with a low level of leverage, the impact is positive. The methodology of the study includes a critical literature review and empirical research based on correlation and regression analysis, including univariate and multivariate regression. The analysis covered quarterly data of ten energy companies listed on the Warsaw Stock Exchange. An important component of the research was classifying those companies into several groups, depending on their level of debt ratio in relation to the industry median debt ratio. The results of the research: The literature review did not provide an unequivocal conclusion to the problem. The empirical analysis did not give grounds to reject the first hypothesis; however, the second one was rejected. The research showed positive correlation and regression coefficients between the debt ratio and the price to book value ratio for highly leveraged companies and negative ones for companies with a low level of debt. The results are surprisingly contrary to the expectations based on theoretical premises.