TECHNICAL AND FINANCIAL FACTORS OF BUSINESS VALUE FROM THE POWER SECTOR

Abstract

The value of the company is influenced by many factors, both financial and nonfinancial.Identification and diagnosis of these factors allows the formulation andeffective implementation of the strategy of improving the company's value. It alsoallows to manage the value of each in the decision relating to the businessenvironment, its resources and work organization. The value of business affect notonly financial cash flow, but also the structure of financial sources. This, in turn, to alarge extent is determined by the nature of the industry. Industries differ in capitalintensity and structure of the property. The production usually requires a highercommitment to substantive and financial capital than commercial activities orservices. In this article companies from the electric power sector were analyzed. Thissector is one of the most capital-intensive. The investment period usually lasts forseveral years, and the production and distribution of electricity requires a lot ofcapital. Aim of this paper is to evaluate the technical and financial factors affectingthe value of the companies form the electric power industry. On the basis of the studyit can be concluded that the analyzed companies have a good financial condition. Theproblem is, however, a high level of depreciation of non-current assets. At the timesof the promotion of renewable energy and stringent EU legislation to reduceemissions of greenhouse gases such entities will be obligated to high investment innew ecological machinery and equipment. This creates an additional risk factor, andforces them to seek new sources of funding. Without these processes, their futureexistence and development seems to be problematic.