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National Research Nuclear University “MEPhI”
ArticleName Analytical framework and method of substantiation of company's fundamental value (on the example of MMC “Norilsk Niсkel”)
DOI 10.17580/tsm.2015.03.11
ArticleAuthor Kogdenko V. G., Putilov A. V., Vorobev A. G.

National Research Nuclear University “MEPhI”, Moscow, Russia:

V. G. Kogdenko, Head of a Chair of Financial Management, e-mail:


National Research Nuclear University “MEPhI”, Moscow, Russia1; “Ore and Metals” Publishing House, Moscow, Russia2:

A. V. Putilov, Dean of a Faculty of Management and Economics of High Techniologies1, Editor-in-Chief of the Journal “Tsvetnye Metally”2

A. G. Vorobev, Head of a Chair of Economics1, Deputy Editor-in-Chief of the Journal “Tsvetnye Metally”, Editor-in-Chief of “Ore and Metals” Publishing House2


This article offers the method of substantiation of the company's fundamental value, including several measures, such as: analysis of the company's external environment, liquidity and paying capacity; evaluation of the quality of profit and assets; justification of expected cost of equity and debt; calculation and analysis of primary value factor. This analytical basis carried out both the calculation of free cash flow and economic profit of the company, and identification of fundamental value. Calculation of indices of structure and dynamics of the profit was offered for its quality assessment. Evaluation of assets' quality was carried out by the analysis of their returns, turnover and fair value. The indicators of financial leverage effect and coverage ratios were calculated for analysis of liquidity and paying capacity. The calculation of the following primary value factors is shown: return on invested capital, its weighted average cost and sustainable growth rate. Definition of free cash flow of the company was made on the basis of the actually reached values of indicators and was used in the method for the purpose of calculation of fundamental value. The calculations of key indicators and factors of fundamental value were performed according to the annual reports and consolidated statements of MMC “Norilsk Nickel”. This article can be useful to various specialists, such as: financial service specialists, making the financial decisions in the context of value-based management; long-term investors; representatives of public authorities in the field of strategic planning; and commodity market analysts.

keywords Non-ferrous metals market, fundamental analysis, value factors, fundamental value

1. Available at: (in Russian)

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