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ENTERPRISEВ’S FUNDAMENTAL STRENGTH AND ITS DETERMINANTS

Tomasz L. Nawrocki

Abstract

The article has a theoretical character and its aim is to classify and systematize the determinants of enterprise's fundamental strength, understood as enterprise's potential to create and protect its intrinsic value. In accomplishing this goal, a critical analysis of the literature was carried out both in the context of available solutions in the investigated area, as well as the possibility of assessing enterprise's fundamental strength based on generally available information, mainly periodic reports published by enterprises. The final result of the article is a presentation and discussion of a set of enterprise's fundamental strength key factors, which were distinguished within three thematic areas: financial condition, business results and efficiency as well as development potential. Subsequently, these factors may form the basis for obtaining a synthetic assessment of enterpriseВ’s fundamental strength. The usefulness of such an assessment is beyond any doubt as it can support the decisions of both managers within the company (e.g. in terms of development strategies or image/reputation management), as well as capital market investors (e.g. in the scope of implemented investment strategies). At the same time, such an assessment opens up further research opportunities, for instance in terms of the relationship between fundamental strength assessment of companies and their assessment by investors on the capital market or investment results in theirs shares.

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DOI resolver: doi.org/10.5593/sgemsocial2018/1.5/S05.042

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