The financial function and the Creation of firm Value

Abstract

A sure sign that the society needs a firm’s product is its willingness to buy such a product in amounts and at prices that ensure the firm’s profits. In turn, the firm’s sustainable development depends on its ability to convert profits into increased company value by improving the efficiency of current processes, developing new products and implementing innovative business models. The purpose of the study is to determine the directions of the corporate financial service and the ways of its assistance to maximize the value of the firm in the current environment. Theoretical and methodological basis of research was made by scientific works of foreign scientists and experts on the formation of company value. Methods of qualitative and quantitative analysis of scientific publications, analytical materials of famous consulting organizations, statistical data were used. The author proves in the article that the modern corporate financial service has the ability and capacity to manage the creation of value inside and outside the balance sheet of the firm, to actively contribute to the effectiveness of the use of its tangible and intangible assets. In this regard, the author proposes to reclassify the financial function from supporting the firm’s core activities as part of the firm’s infrastructure in the value chain to a primary function.

Keywords

• financial function
• value creation
• profit maximization
• tangible and intangible assets