Analysis of the impact of real estate market evolution on fixed assets’ capitalization in Romanian companies, based on the econometric model

Abstract

The real estate market has known in the last years a constant expansion of about 20% / year, being actually in the real estate boom area, both in retail and corporate segments. The impact of this trend, at company’s level, is quite insignificant, managing to put to use the fixed assets increase in the turnover. The companies included in the sample under study have registered turnover increases in the last two calendar years (2016 and 2017). This increase was put in relation to the increases in the Romanian economy in the fiscal year, to inflation increase and had been done in the conditions of the consumers’ behavior migrating to a higher level. This consumption level is due to the national salary policies which have aligned the salary incomes from the budgetary system to the threshold obtainable in 2020. Based on the data reported by the economic agents in the financial statements, this study aims at objectively assessing the dynamic of changing the financial indicators in the context of the previously mentioned real estate boom. The financial rates analysis, in relation to fixed assets, is viewed through the ratio between effort and result, contributing to obtaining the preliminary table necessary for issuing the econometric model. The issued model will be of regression – comparative type and will be based on relative data, computed through multi-yearly weights for the economic increase indicators: profitability, liquidity and capitalization reported to the usage of capitalized fixed assets at the market value, changeable in the real estate boom period. The resulted values will be tested through statistical tests, in what concerns the statistical significance and data validity. A number of 25 statistical observations are entering in the construction of the model, collected from Romanian companies which obtained a turnover of minimum Euro 195 million