Estimation of investment in firms’ evaluation in Brazil: an analysis of the adherence between theory and market practice

Abstract

The firms’ evaluation process is potentially practiced and discussed by theoretical. The measurement of the investment rate is one of the most relevant stages in this process, since the firms seek for the maximization of its market value by high returns in its investment’s decisions. The aim of this paper is to verify if there is an adherence between academy and market practices in the process of estimation of the fixed and working capital investments and of the investment rate in Brazil. This research also brings an analysis between the adherence of what has been projected and what has been observed in the published statements. Regarding the methods used to reach the research’s purpose, an explanatory-descriptive study and a quantitative research, which had its variable averages statistically compared, have been done. To verify the theory, the contribution of many authors about the theme has been used as bibliographic source. To verify the brazilian market practice, a documental research among the Firms’ Evaluation Reports, which are presented as Initial Public Offering (IPO) requirement and were available in Comissão de Valores Mobiliários (CVM) site, has been done. To the analysis for adherence between what has been projected and what has been observed, have been used data from Economática. Two samples have been verified and from tests that have been done are possible to check the contribution and the credibility of the information generated by firms’ evaluation in Brazil.