Factor Analysis on Firm Value of Venture Business

Globalization of management led modern firms to improve management efficiency, through effective investment and establishing rational finance strategy, in order to compete against multinational enterprises. Modern firm, symbolized by globalization and specialization, should innovate its business paradigm into how the firm value can be enhanced focusing on management, research and development(R&D) and evaluation system. Firm values were measured by the factor analysis and the multiple regression analysis. The analysis surveyed venture companies that are continuously listed at the KOSDAQ market for 5 years from 2016 to 2020. The factor analysis verified that firm value is highly correlated with accounting information in the financial statements and the other information. Among accounting information; total assets, sales and operating profit are the prime variables that determine firm value. Also, when measuring firm value, adding other information regarding certain firm’s characteristic along with the prime accounting information appeared to elevate the rate of correlation. The result of multiple regression analysis showed that total assets and operating profit, and the other information such as average foreigner ownership ratio, WACC etc., are positively correlated with firm value and are significant around 1% level. On the other hand, sales appeared to have negative correlation with firm value and is significant around 1% level. Throughout the study, accounting information in the financial statements and other information which reflects company’s character are proven as significant information that determine firm value.