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Financial Analytics: Science and Experience
 

Management of sustainable investment growth of the company

Vol. 9, Iss. 44, NOVEMBER 2016

PDF  Article PDF Version

Received: 20 October 2016

Received in revised form: 2 November 2016

Accepted: 14 November 2016

Available online: 29 November 2016

Subject Heading: FINANCIAL INSTRUMENTS

JEL Classification: G01, G32, G35, O16

Pages: 41-51

Matyash I.V. Financial University under Government of Russian Federation, Barnaul Branch, Barnaul, Russian Federation
ivmatyash@mail.ru

Importance The article focuses on the method for evaluating the effectiveness of corporate growth depending on internal sources of finance.
Objectives The research investigates the substance, methodology and techniques for evaluating the sustainable investment growth of companies and tests the proposed approach in practice of the Russian enterprises.
Methods I review methods for evaluating internal growth of the company and demonstrate that the existing approaches fail to consider changes in the corporate value. To evaluate the quality of growth, I suggest determining a growth in the corporate market value from profit reinvestment, using the model of added return evaluation.
Results The article defines the concept of investment sustainable growth. I suggest using the sustainable growth rate of market value to evaluate the quality of investment growth. The article unfolds the factor model and explains why it is beneficial to apply the proposed rate. To clarify the proposed technique, I provide results of investment sustainable growth in relation to a group of national enterprises for 2014–2015.
Conclusions and Relevance Upon the analysis, I conclude that the considerable number of enterprises demonstrates low capabilities for sustainable investment growth. To alter the economic trends, it would be reasonable to massively implement more effective projects and enhance corporate governance. The proposed approaches can be used for forward-looking monitoring and evaluation of sustainable growth indicators of com

Keywords: sustainable growth, enterprise, value added, quality, reinvesting policy

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