Theme:

Economic profit as a measurement of strategic efficiency for the companies

1)      Determinants of economic profit, empirical analysis for the Russian companies

2)      Effectiveness of economic profit measurement for company valuation  in terms of its correlation with  market value

Assigned tasks and terms of performance:

1)      The level of the theme openness in  the scientific literature (jan. – feb. 2010).

2)      Determination and  formalization of the models of correlation between economic profit  and market value (jan. – feb. 2010).

3)      Determination of reasonable factors that can be drivers for the company strategic efficiency (feb. – mar. 2010).

4)      Database creation for the empirical analysis (feb. – mar. 2010).

5)      Empirical analysis (mar. – may 2010).

The key obtained results of the project in 2009:

Models of economic profit determinants, empirical analysis for the Russian companies.

The next main results were obtained for data of 26 large scale Russian companies for the period 2002-2007:

·              Capital expenditures have positive influence on economic profit creation.

·              Companies of mining industry demonstrate higher meanings  of economic profit than other ones. Telecommunication companies do not have advances in the value creation.

·              Dividend payments have a positive influence on economic profit.

·              Different sources of capital (shareholder capital, long term and short term debt) do not have  a significant matter in value creation.

·              Government property as a portion of shareholder capital does not give additional support in economic profit creation.