The methodological instruments of the capital structure management assessment at the power-producing listed companies
DOI:
https://doi.org/10.21847/1728-9343.2018.1(153).127100Keywords:
economic value added, capital structure, effectiveness, power-producing listed companiesAbstract
The conducted research provides improvements in the indicators system of the diagnostics of the capital structure management effectiveness at the power-producing listed companies that, comparing to the others, is grounded on the analysis of the equity and debt taking into consideration the economic value-added dynamics, which, eventually helps to define issues in the capital structure management process and provide with solid recommendations for further improvement of the decision making. It is substantiated that the system of the indictors has to combine return on invested capital (ROIC), Debt-to-Equity ratio (D/E), effect of financial leverage (EFL), weighted average cost of capital (WACC) and economic value-added (EVA), which is a baseline of the defined indicators. Modification of the economic value-added makes it possible to evaluate the EVA of Equity and EVA of Debt within the capital structure. Therefore, modified EVA formula helps to understand the oscillations in the effectiveness and efficiency of the capital structure components and provide the analytical basis for the stakeholders and their decisions. Defined that, in combination with the other indicators, it is possible to understand the complexity and differentiation of the capital structure at the power-producing listed companies; the relations between owners and the entity and their interests; the mechanism of the value creation as enterprise and Equity and Debt.
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