The main purpose of the research is to identify two types of benchmarks required for the financia... more The main purpose of the research is to identify two types of benchmarks required for the financial ratios analysis based on Georgian data. To obtain the benchmarks of the first type-industry average, the financial statements for 2018-2019 years of 131 companies in the manufacturing industry were processed. Due to absence of financial market data, a market imitation study was conducted to obtain the second type of benchmarksratios of the high performance companies. To achieve this, a survey of 26 representatives of financial industry companies was conducted through a questionnaire, containing the financial ratios of 9 companies from manufacturing industry. Respondents selected companies whose stock prices, in their opinion, would increase or decrease according to their financial ratios. To check the validity of the results we conducted: a follow-up interview with several respondents, a regression analysis of results, and a financial analysis of two high-rating and three low-rating companies using forecasts and free cash flow valuation. As a result of the research, we obtained two types of benchmarks-industry averages and a set of ratios of "high performance" companies. We saw that none of the coefficients taken separately explain the respondents' choices, and that the survey results are consistent with the forecasts and the analysis of the value of the company. During the research, we developed a methodology on how to identify high-performing companies despite virtually nonexistent capital market in Georgia. The methodology can be used for other, similar studies. The results are important for anyone who uses financial analysis. It will be interesting for researchers, for example, to study current processes in economics and companies and, hopefully, will contribute to capital market development in Georgia.
There is no doubt that fossil fuels are expensive energy resources. Their use also leads to the e... more There is no doubt that fossil fuels are expensive energy resources. Their use also leads to the environmental problems. Although there is a tendency of increase in renewable energy capacity, its share in global final energy consumption is relatively low. This paper aims to increase awareness of renewable energy role in corporation value creation. The research studies the potential of the use of agricultural biomass residues available for the company and evaluates several investment projects using the example of Geoagro ltd, and assesses their impact on company's value. The paper also studies the feasibility of use of alternative renewable energies such as biomass and solar energy for company needs and finally assesses the profitability of the two. Regarding the methodology, the paper uses the standard financial valuation techniques such as Net Present Value and Internal Rate of Return in order to compare alternative investment projects. The results showed that the direct sell of biomasshazelnut shells creates the highest value. While comparing the profitability of using alternative energies, it was showed that the best option is to eliminate natural gas use and switch to biomass fuel.
The main purpose of the research is to identify two types of benchmarks required for the financia... more The main purpose of the research is to identify two types of benchmarks required for the financial ratios analysis based on Georgian data. To obtain the benchmarks of the first type-industry average, the financial statements for 2018-2019 years of 131 companies in the manufacturing industry were processed. Due to absence of financial market data, a market imitation study was conducted to obtain the second type of benchmarksratios of the high performance companies. To achieve this, a survey of 26 representatives of financial industry companies was conducted through a questionnaire, containing the financial ratios of 9 companies from manufacturing industry. Respondents selected companies whose stock prices, in their opinion, would increase or decrease according to their financial ratios. To check the validity of the results we conducted: a follow-up interview with several respondents, a regression analysis of results, and a financial analysis of two high-rating and three low-rating companies using forecasts and free cash flow valuation. As a result of the research, we obtained two types of benchmarks-industry averages and a set of ratios of "high performance" companies. We saw that none of the coefficients taken separately explain the respondents' choices, and that the survey results are consistent with the forecasts and the analysis of the value of the company. During the research, we developed a methodology on how to identify high-performing companies despite virtually nonexistent capital market in Georgia. The methodology can be used for other, similar studies. The results are important for anyone who uses financial analysis. It will be interesting for researchers, for example, to study current processes in economics and companies and, hopefully, will contribute to capital market development in Georgia.
There is no doubt that fossil fuels are expensive energy resources. Their use also leads to the e... more There is no doubt that fossil fuels are expensive energy resources. Their use also leads to the environmental problems. Although there is a tendency of increase in renewable energy capacity, its share in global final energy consumption is relatively low. This paper aims to increase awareness of renewable energy role in corporation value creation. The research studies the potential of the use of agricultural biomass residues available for the company and evaluates several investment projects using the example of Geoagro ltd, and assesses their impact on company's value. The paper also studies the feasibility of use of alternative renewable energies such as biomass and solar energy for company needs and finally assesses the profitability of the two. Regarding the methodology, the paper uses the standard financial valuation techniques such as Net Present Value and Internal Rate of Return in order to compare alternative investment projects. The results showed that the direct sell of biomasshazelnut shells creates the highest value. While comparing the profitability of using alternative energies, it was showed that the best option is to eliminate natural gas use and switch to biomass fuel.
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Papers by Vato Berishvili