The effectiveness of public companies: The evolution of valuation methods

Subject. The article investigates methods for evaluating the effectiveness of public companies, their evolution, and features of application in modern economic analysis. Objectives. The study aims at the development and testing of business performance assessment methodology based on corporate reporting. Methods. The study employs general scientific principles and research methods, i.e. abstraction, generalization of approaches to assessing the performance of companies, and methods of analysis, synthesis, economic modeling, systematization, and generalization of obtained results. Results. The paper defined the main stages of evolution of methods for performance evaluation of public companies, presented the developed methodology for evaluating company's effectiveness based on corporate reporting, which includes four blocks of indicators. The first block analyzes factor models of efficiency and sustainable growth, the second one evaluates performance indicators based on cash flows. Performance assessment in the third block is based on indicators of fundamental value, market capitalization, and return on investments in shares. The fourth block evaluates company's performance indicators in terms of sustainable development and value creation for all stakeholders. Conclusions. The methodology was tested on the corporate reporting data of PAO PhosAgro, one of the largest Russian chemical holding company. The study enables to conclude on the high short–term efficiency of the company, however, from the perspective of sustainability of its development and long-term effectiveness, there are a number of factors that reduce the assessment.