THE IMPACT OF FINANCIAL MARKET LIQUIDITY ON COMPANY VALUE

Abstract

The article considers the degree of influence of the company's liquidity level on its value. Under conditions of strong segmentation of the financial market liquidity, the most pressing issue for the expert is the accounting of the company's liquidity level. Thus, the value of shares of the company, the demand on which is extremely low and it is difficult to sell, is lower than the company, whose liquidity is much higher. In this paper, the methods of accounting for the degree of company liquidity are considered, the methods of accounting for liquidity in different assessment approaches are considered, and the companies of the American and Russian markets on the degree of influence of liquidity on their capitalization are analysed. The author has analysed the experience from the debt capital market to take into account bond liquidity, which could be applied in the income approach to company valuation when calculating the discount rate of the company's cash flows. Also, the methods of taking into account the liquidity of the company's shares when valuing the company by a comparative method and the transition of evaluation of the companies-analogues to the evaluated company are presented. The paper also presents a practical analysis of US and Russian companies in the oil, metals and telecommunications sectors and their multipliers based on their classification into liquid and non-liquid securities.