Valuation role as a tool of decision-preparing for foundation of company market capitalization

In the article based on the results of analysis of the main company valuation methods essence, the further impulse to the research of the role of company valuation as a tool of foundation of its market capitalization was given. By chronological analysis of scientists’ interpretation of “capitalization” concept dualistic nature of of the mentioned economic category (which comes from the capital direction on the one hand, and the value direction on another) was discovered. Having summarized scientific papers related to the mentioned topic, the connection between concepts of “capitalization” and “market capitalization”, “market capitalization” and “company value” was discovered. As a result of A. Damodaran’s research papers analysis there was illustrated the transition from general to specific level of connection between company market capitalization and its valuation. Taking into consideration significant level of differentiation of company valuation tool kit, which is caused by existence of three main valuation approaches (income, cost and market), the decision nature of foundation of company market capitalization within main valuation methods was clarified. Based on the result of the approaches analysis sphere of using of each method was systemized, the basis of making decision regarding market capitalization growth was defined. It was discovered that the base of decision-making regarding capitalization growth within income approach methods are different types of income (icome from future cash flow, income from intellectual property, market operations income and general income level). Within cost methods, where the most factor variety is observed, the base is related to: fixed assests condition (net book value method), unique objects of intellectual property (replacement value method), existing assets and liabilities revaluation process (adjusted net book value method). The base of such decision making within the market methods is comparison with a company-analogue (comparable companies valuation method) or buying-selling such kind of company (multiplier method)

capitalization, company market capitalization, valuation, company valuation methods