Model zmian stopy zysku przedsiębiorstwa w gospodarce wolnorynkowej
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Date
1983
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Wydział Prawa i Administracji UAM
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A model of changes in the rate of return of an enterprise in the free market economy
Abstract
In every society it is a firm's task to fulfil the needs of consumers and
other producers in the most efficient way. This is to mean that the value created
by production should at worst equal the value sacrificed. One of the components of value sacrificed is the cost of debt and equity both of which can be measured
on the competitive capital markets as a result of demand and supply.
In business finance literature there is much attention to these fields of high
theoretical and empirical importance.
The cost of debt capital is relatively easy to measure as the discounting
rate which equalizes all future payments on the debt instrument (i.e. interest and
repayment) to its current market price. The payment of all debt liabilities has to
be done before the owners of the company can receive their cost of equity capital,
the latter cost being defined as the discouting factor which equalizes
all expected future payments to the current market price of the share.
Accounting profits of companies are measured gross of thé costs of equity
capital, i.e. before costs of equity capital are deducted. Economic profits are defined
as accounting profits less costs of equity capital.
It may be concluded that from an efficiency point of view research as to the
question of the amount of the realized (accounting) rate of return of individual
companies is of high importance. Besides research on the measurement of the cost
of capital itself should continue.
The present article deals with the first research. It concentrates on the measurement
and analysis of changes in the accounting rate of return, thereby taking
advantage of earlier work done by prof. dr. H. Albach. Eventually, rate of return
developments over time may be analyzed using one or two models which are
described in the paragraph IV,
After some clarifications (par. V) and an illustration of the working of these
models by means of a theoretical example (par. VI) empirical attention is given to
the analysis of the accounting rate of return developments with regard to the
Philips Company. Paragraph VIII summarizes and concludes.
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Digitalizacja i deponowanie archiwalnych zeszytów RPEiS sfinansowane przez MNiSW w ramach realizacji umowy nr 541/P-DUN/2016
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Citation
Ruch Prawniczy, Ekonomiczny i Socjologiczny 45, 1983, z. 1, s. 151-167