From financial value to real company value
The value of a company is usually measured with data included in the firm’s accounting records and other financial information, such as financial forecasts. This type of valuation provides an incomplete value, since it does not take into account other economic, social and environmental aspects. For this reason, the objective of this article is to discuss how companies can quantify the costs and benefits that their activities generate for society and the environment (externalities). Therefore, the article describes how to reach an estimate of the company’s real value (or total value) by adding the social and environmental value to the firm’s financial value, according to the «True Value» methodology (KPMG, 2014). Additionally, this methodology is applied to a business in order to estimate its real value. Once the estimate has been calculated, the study analyzes how externalities can end up affecting the value of the company. Finally, a strategy is proposed so that the business can minimize the negative impact of externalities on its results.
ODS
Natàlia AmatConsultant at KPMG, with experience in projects for clients from various sectors, mainly Energy (Electricity, Gas Distribution) and Retail (Fashion, Food). Degree in Business Sciences and Management from the Pompeu Fabra University of Barcelona (2015) and Boston College (exchange student in 2014). She has also taught courses on Entrepreneurship and Digital Transformation organised by the Junior Achievement association and KPMG.
Oriol AmatLecturer of Financial Economics and Accounting at the Pompeu Fabra University of Barcelona and Co-Director of the Master’s in Financial and Accounting Management at the UPF Barcelona School of Management. Vice Dean of the Association of Economists of Catalonia and Vice President of the Catalan Association of Accountancy and Management (ACCID). His most recent books are Avanzando: Cómo lo hacen las mejores organizaciones (2014) and Empresas que mienten (2017). He has been a visiting lecturer in various universities and business schools in Europe, America and Asia.
