The role of internally generated goodwill in choosing areas and objects of investment

Abstract

The purpose of the study is to develop and test in practice the method of analyzing the relationship between the formation of internally generated goodwill and investment attractiveness of an enterprise based on econometric modeling in order to improve the investment management process. Attracting additional investments, both for Slovakia and Ukraine, requires the identification of promising objects of investment. Assessment of enterprise’s potential cannot be accurately performed on the base of financial statements, which reflect only the state of assets. It is necessary to take into account the prospects for development of this business unit in the future, that largely depends on effective functioning of management system. The success of business processes depends on how rationally managers use the resources of the enterprise and form the structure of assets adequate to the demands of the market. The article considers the problem of estimating the value of enterprises in order to attract investments based on internally generated goodwill, and determines the peculiarities of the formation and types of goodwill of a commercial enterprise. As the main research method, canonical correlation modelling was used to analyze data of Ukrainian machine-building enterprises for the period 2017–2020. As a result, the factors responsible for the formation of internally generated goodwill were identified and classified according to their economic nature. Correlation dependencies between groups of initial and resulting coefficients were calculated and the areas of enterprise management that have the greatest impact on the formation of its market value were identified.

Keywords

• canonical modelling
• directions of investment
• goodwill
• intangible assets
• market value
• reputation of an enterprise