Features and Patterns of Functioning of Financial resources of Digital companies

The relevance of the study is due to the monopolization of the markets for goods and services by transnational digital companies.

The object of the study is the finances of the two world’s largest digital and oil companies — Meta Platforms Inc. and Saudi Arabian Oil Company.

The subject of the study is economic relations in the functioning and regulation of the economic behavior of traditional and digital companies in the context of the digital transformation of existing markets and the creation of new markets for digital goods.

The purpose of the study is to identify the features of development and patterns of functioning of the system of financial resources of digital companies.

The methodological base of the study is based on the financial analysis of a digital and oil company, including a comparative analysis of market capitalization, financial results and balance sheets (revenue, net income, assets, liabilities), financial condition, liquidity, profitability, and a comprehensive assessment of performance. It has been established that five manufacturers of digital goods by capitalization in 2020–2022 were among the 12 world leaders and significantly strengthened their positions against the backdrop of traditional business during the pandemic. The size of the largest oil company in 2014–2020 was more significant than that of a digital company, but the gap in dynamics decreased from 7 times in 2017 to 3 times in 2020. At the same time, the liquidity of the balance sheet of a digital organization is 4–7 times higher than that of an oil company, the financial condition is absolutely stable, and independence from external creditors is the highest. The oil company’s cost-effectiveness indicators are still higher, as the digital one invests in network development and attracting new users. However, in dynamics, the oil company’s profitability has halved over the past four years.

The author comes to the conclusion that in the medium term, a digital company is projected to outperform an oil company in terms of size and efficiency. For the first time in international and domestic science, it is proposed to increase normative values of liquidity and financial stability indicators of a digital company by 4–7 times higher compared to traditional organizations, which determines the scientific novelty of the study.

1. Hojnik J. Technology neutral EU law: Digital goods within the traditional goods/services distinction. International Journal of Law and Information Technology. 2017;25(1):63–84. DOI: 10.1093/ijlit/eaw009

2. Skokov R. Yu. Digital addictive goods and COVID-19: Banning can’t be restricted. In: Genesis of noonomics: Scientific and technological progress, diffusion of property, socialization of society, solidarism. Coll. plenary rep. Joint int. congr. “SPEC-PSE-2020”. Vol. 2. Moscow: Vitte Institute for New Industrial Development; 2021:205–216. URL: https://inir.ru/wp-content/uploads/2021/06/Collection_SPEK-PNO-2020_volume-2_layout.pdf (accessed on 13.03.2022). (In Russ.).

3. Skokov R. Yu. Behavioral design: Economic goods and socio-political manipulation. Volgograd: Volgograd State University Publ.; 2022. 104 p. (In Russ.).

4. Bukht R., Heeks R. Defining, conceptualizing and measuring the digital economy. Development Informatics Working Paper Series. 2017;(68).URL: https://diodeweb.files.wordpress.com/2017/08/diwkppr68-diode.pdf

5. Kokh L., Kokh Yu., Prosalova V. Disclosure of intellectual capital by digital companies. In: Ilin I. V., ed. Proc. Int. conf. on digital technologies in logistics and infrastructure (ICDTLI 2019). (St. Petersburg, 4–5 April, 2019). Dordrecht: Atlantis Press; 2019:193–198. DOI: 10.2991/icdtli-19.2019.36

6. Büttner R., Müller E. Changeability of manufacturing companies in the context of digitalization. Procedia Manufacturing. 2018;17:539–546. DOI: 10.1016/j.promfg.2018.10.094

7. Gebauer H., Fleisch E., Lamprecht C., Wortmann F. Growth paths for overcoming the digitalization paradox. Business Horizons. 2020;63(3):313–323. DOI: 10.1016/j.bushor.2020.01.005

8. Schallmo D., Rusnjak A., Anzengruber J., Werani T., Jünger M., eds. Digitale Transformation von Geschäftsmodellen: Grundlagen, Instrumente und Best Practices. Wiesbaden: Springer Gabler; 2017. 700 p. DOI: 10.1007/978–3–658–12388–8

9. Zollenkop M., Lässig R. Digitalisierung im Industriegütergeschäft. In: Schallmo D., Rusnjak A., Anzengruber J., Werani T., Jünger M., eds. Digitale Transformation von Geschäftsmodellen: Grundlagen, Instrumente und Best Practices. Wiesbaden: Springer Gabler; 2017:59–95. DOI: 10.1007/978–3–658–12388–8_3

10. Machado C. G., Winroth M., Carlsson D., Almström P., Centerholt V., Hallin M. Industry 4.0 readiness in manufacturing companies: Challenges and enablers towards increased digitalization. Procedia CIRP. 2019;81:1113–1118. DOI: 10.1016/j.procir.2019.03.262

11. Kogdenko V. G. Methodology of the financial analysis of digital companies. Uchet. Analiz. Audit = Accounting. Analysis. Auditing. 2018;5(3):94–109. (In Russ.). DOI: 10.26794/2408–9303–2018–5–3–94–109

12. Monastyrsky U. E. Role of losses in the financial statements of digital companies. In: Ashmarina S. I., Mantulenko V. V., eds. Current achievements, challenges and digital chances of knowledge based economy. Cham: Springer-Verlag; 2021:341–346. (Lecture Notes in Networks and Systems. Vol. 133). DOI: 10.1007/978–3–030–47458–4_40

13. Akhtyamov M. K., Gonchar E. A., Tikhonova N. V. Evaluation of the company’s intellectual capital as the element of the company’s intrinsic value. Kreativnaya ekonomika = Journal of Creative Economy. 2016;10(8):945–960. (In Russ.). DOI: 10.18334/ce.10.8.35851

14. Dukhnich Yu. Intellectual capital: Components, management, evaluation. Korporativnyi menedzhment. Aug. 26, 2014. URL: https://www.cfin.ru/management/strategy/competit/Intellectual_Capital.shtml (In Russ.).

15. Sveiby K. E. Methods for measuring intangible assets. 2001. URL: https://www.sveiby.com/files/pdf/intangiblemethods.pdf

16. Govindarajan V., Rajgopal S., Srivastava A. Why we need to update financial reporting for the digital era. Harvard Business Review. June 08, 2018. URL: https://hbr.org/2018/06/why-we-need-to-update-financialreporting-for-the-digital-era?referral=03758&cm_vc=rr_item_page.top_right

17. Krishnan S. Digital companies and the valuation of intangible assets. Toptal. 2015. URL: https://www.toptal.com/finance/valuation/valuation-of-intangible-assets

18. Zaman A. Reputational risk: How to manage for value creation. Upper Saddle River, NJ: FT Press; 2003. 308 p. (Management Briefings Executive Series). (Russ. ed.: Zaman A. Reputatsionnyi risk: upravlenie v tselyakh sozdaniya stoimosti. Moscow: Olymp-Business; 2008. 416 p.).

19. Govindarajan V., Rajgopal S., Srivastava A. Why financial statements don’t work for digital companies. Harvard Business Review. Feb. 26, 2018. URL: https://hbr.org/2018/02/why-financial-statements-dont-workfor-digital-companies

20. McKenzie R.B., Tullock G. The new world of economics: A remake of a classic for new generations of economics students. Berlin, Heidelberg: Springer-Verlag; 2012. 559 р.