Preparation methodology of TOP 101 of Estonia’s most valuable enterprises
The value of companies listed in TOP 101 of Estonia`s most valuable enterprises is
based on enterprise value, i.e., value of the company’s future money flow collectively
to all of the company’s finance providers (shareholders/members and financial creditors).
The exception is financial services providers (e.g. banks and insurance companies).
Their evaluation reflects the company’s equity value, as due to the specific features
of the financial sector, it is not possible to objectively provide enterprise value
that is comparable with other TOP 101 participants.
It is important to separate enterprise value from equity value. Enterprise value is the
total company value (the market value of common equity and debt) minus cash.
Each company's enterprise value (for financial services providers, their equity value)
is determined using the comparable trading multiples method (the market approach).
The exception is publicly listed companies, whose enterprise value is based on
the company’s value on the stock exchange as of 30.06.
In addition the company’s openness, transparency, governance is evaluated based on
publicly available information. The impact of such assessment is up to 20%.
This evaluation is carried out by Nasdaq Tallinn. The following factors related
to the company’s corporate governance are evaluated:
diversity, or whether both genders are represented on the Supervisory
and Management Board; the presence of independent Supervisory Board
members and clear declaration of their independence; the availability
of Supervisory and Management Board work experience on the company's webpage;
ability to identify majority shareholders;
financial information disclosed by the company, information on the
most importantrisks and their governance;
disclosure of key internal policies, presence of corporate governance and
sustainability reports on the company’s webpage, information about company’s strategic goals.
The choice of this method is motivated by the following considerations:
it is simple;
it uses market data and publicly available annual reports and does not rely on subjective inputs;
it permits an indicative assessment of the company relatively quickly; and
it can be used even if the publicly available information is relatively limited.
The financial analysis is performed by Prudentia and the publicly available information
on the company’s corporate governance and transparency is assessed by Nasdaq Tallinn professionals.