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ArticleName Managing capital structure of a metallurgical company aimed on rising its market capitalisation and goodwill cost. Part 1
ArticleAuthor Kalinskiy O. I.

National University of Science and Technology "MISIS" (MISIS)

O. I. Kalinskiy, Assistant Professor of a Chair of Applied Economics, e-mail:

Increasing the market value of the enterprise today is one of the most critical tasks for the top management of the company. At the same time, lately while it is important to estimate and correctly manage the tangible assets, more and more attention is paid to managing the intangible assets, including the most important one, goodwill (business reputation). A method to manage the structure and volume of the working capital of the enterprise is being evaluated. This method could be utilized to provide conditions to raise the enterprise’s market capitalization and increase its goodwill. It is demonstrated that in order to achieve high efficiency of the enterprise’s operations and its goodwill’s increase together with the capitalization, effective management of the working capital and short term debt is quite a logical and rational course of action. A method of management of the working capital and short term debt based on the solution of the optimization task is offered where the rating valuation oriented as the goodwill and capitalization increase is acting as quadratic objective. In this method the fractions are represented by the relative volume of working capital and short term debt. It is concluded that the volume of the working capital and the size of the short term debt are not always optimal for the effective functioning of the enterprise. Besides, system of management of the working capital and short term debt is introduced that allows to achieve the structure of capital ensuring saving of resources due to the economic utilization of the working capital in the conditions characterized by the instability and falling market demand. At the same time, this system ensures that there is sufficient working capital and sources of its financing at the times when the demand is at its highest level. Based on the modeling of various valuations in the article, it is demonstrated that the implementation of such procedures will allow to ensure the sustainability of the enterprise’s operations and will positively influence on the increase of goodwill and capitalization of the metallurgical enterprise.

keywords Market capitalization, market value, business reputation, goodwill, rating valuation, optimization procedures, working capital management, management of the short term debt

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7. Kalinskiy O. I., Rozhkov I. M., Markov S. V., Redkina E. A. Byulleten nauchno-tekhnicheskoy i ekonomicheskoy informatsii. Chernaya metallurgiya – Bulletin of scientific and technical and economical information. Ferrous metallurgy. 2006. No. 11 (1283). pp. 100–104.

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12. Rozhkov I. M., Kalinskiy O. I., Markov S. V. et al. Ekonomika v promyshlennosti – Economics in industry. 2009. No. 3. pp. 47–52.

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