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Intellectual Capital as a Factor of Fundamental Analysis
Nowadays the society is at the new stage of the economic development when the quality and rate of continuous education of people and organization play the major role. Those companies have the bigger financial success which hold not only traditional factors of production but also technologies, and which develop actively the intellectual capital. So we can suppose that the increasing role of intellectual capital in the modern society leads to the increasing internal company’s value when to generate good cash flow and to keep up sustainable growth it is not enough to have visible assets. So, the investor on the stock market faces the problem when he or she makes the investment’s decisions because of the reviewed gap between the market value and internal value of company. The investment decision-making process is based on data from balance-sheet as a traditional approach of fundamental analysis which does not consider intellectual capital. Therefore the fundamental analysis does not response to the modern demands to show more clearly the results of company’s actions for making investment’s decisions. As a result, we need to find or propose new ways for fundamental analysis to be keeping in reality. The research objective is to determine the role and the endowment of intellectual capital in making the internal value of company as a factor of the fundamental analysis, and also elaborate recommendations for the investment decision-making process based on updated methodology of fundamental analysis. In this research we take an attempt to modify the traditional approach of the fundamental analysis to increase its meaningfulness by adding new factor – intellectual capital – and to provide recommendations for investors. The modified methodology was approved for analysis by VimpelCom Company (telecommunications).
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