Value-Creation Efficiency as a Decision-Making Basis and Its Assessment in the Financial Management of Energy Companies: Evidence from the Polish Capital Market

Abstract

A study of the efficiency of the energy companies that are listed on the Polish capital market, which will be the object of the analysis in this paper, is focused on assessing the degree of accomplishment of their basic financial objectives, namely, the maximization of their market values. The main research methods that are used in the article are methods for analyzing and evaluating the literature (in order to present the current scientific achievements in the field under study) and descriptive statistics and mathematical statistical methods for analyzing the interdependence of the phenomena (used to characterize and compare the analyzed energy-sector companies, as well as to quantify the determinants of the value-creation efficiency of these companies). This article is focused on the conditions and problems that are related to the decision-making processes that are aimed at increasing efficiency in the area of building enterprise-value. These require the use of tools for efficiency measurement that enable management to quantify and assess changes in an enterprise’s market value and the efficiency of its creation. Within the conducted research, it has also been proven that this is the market perspective that is of key significance from the point of view of the criteria of making financial management decisions. The market perspective reflects the expectations of the majority of company stakeholders, to the fullest. The study showed that the allocation of capital in the listed energy companies during the period of 2014–2020 was subject to a relatively high risk of losing the economic value of the invested capital. In terms of asset value, dividing the studied group of companies into portfolios of two groups of companies additionally showed that the volatility of the market and equity returns for the smaller companies was higher than it was for the larger companies.

1. Introduction

As the entirety of actions that are aimed at the efficient use of an enterprise’s economic resources that are focused on the implementation of previously formulated expectations, management is closely connected with the objectives of business activity. The problem of the objective as a directional determinant of the management process appeared in the 1950s and 1960s in works by P. Drucker, who was the author of the management-by-objectives concept [1,2]. When explaining the essence of management, he stated directly that it was the process of formulating business objectives and indicating the proper methods and means to accomplish them. Striving for the implementation of business objectives is directly related to the notion of the efficiency of action. At the same time, the requirement for the rationality of management necessitates the respect for cost-efficiency principles in the course of fulfilling the objective, which is related to the need to consider the relationship between incurred outlays on the one hand and the effects that are achieved because of them, on the other. This requirement, in turn, is connected to the notion of efficiency, reflecting the ability of a firm to implement its assumed objectives. The lack of a relationship between the accomplishment level of business objectives and its efficiency level in extreme cases would result in the creation of attitudes that are based on striving for the accomplishment of the set objective at all costs, which would be contrary to the basic principles of economic accounts, and threaten the further existence of a business. Such a way of perceiving management makes business objectives a substantial determinant for both those decisions that are made in the course of managing them, and the criteria and methods for assessing the effects that are accomplished. It is obvious that, within the company efficiency management, there must be cohesion between the criteria and the methods for evaluating the effects of an enterprise’s functioning and the criteria and methods that are used for the needs of making management decisions that can contribute to the achievement of the desired effects.

Making strategic and operating decisions is an integral element of the management process, that is focused on the efficient accomplishment of business objectives. From the point of view of enterprise management, the efficiency of the allocation of inputs and the efficiency of using economic resources are of key importance. The issues of economic efficiency considered from the perspective of economics, on the other hand, emphasize the concept of technical efficiency (including pure technical efficiency and scale efficiency) [3]. Referring to issues of economic efficiency for the essence of an enterprise, from the essence of the enterprise based on the use of organized economic resources on the one hand to the conditions of raising and using those resources on the other, it is necessary to indicate the following key areas of making strategic decisions in firms:

• Making choices with regard to selecting and raising necessary economic resources and searching for ways of their optimum allocation;
• Raising and creating unique resources, the skillful use of which nowadays is becoming a key source of benefits for enterprises and their stakeholders;
• Efficient shaping of relationships with stakeholders, in order to create optimum conditions for company functioning and development;
• Searching for paths and methods for improving enterprise functioning in order to increase its efficiency, thus raising competitiveness and achieving market advantage;
• Building the ability of the enterprise to effectively and efficiently respond to changes in its environment, including the occurrence of crisis situations caused both by economic reasons (e.g., the global economic crisis of the first decade of the 21st century) and extra-economic reasons (e.g., the global crisis related to the COVID-19 pandemic and the war in Ukraine caused by the aggression of Russia).

During the assessment of enterprise efficiency for making management decisions and verifying their results, it is necessary to use efficiency measures that are based on four potential perspectives of research [4]:

• Book perspective—whose foundation is the enterprise’s financial book system and the rules arising from its application for establishing financial results (profit or loss) of the enterprise, based on the accrual principle;
• Cash perspective—discussing enterprise efficiency from the point of view of the cash principle, which is the basis for determining cash flows;
• Market perspective—primarily related to the need for measurement and assessment of enterprise value-creation and business valuation;
• Performance measurement perspective—as a comprehensive system integrating book, cash, and market perspectives to enable a multi-criteria performance measurement through the use of a set of measures for the quantification of the effectiveness and efficiency of company activities, as well as the efficiency of management decisions that are made.

The study of the efficiency of the listed companies, which will be the object of the analysis in this paper, is focused on assessing the accomplishment degree of their basic financial objective; namely, the maximization of their market values. This maximization is an obvious objective of both the current shareholders of those companies and potential investors who are evaluating the profitability of the investment process from the point of view of the achievable rate of return on the invested capital. It is also a key problem from the point of view of managing a company’s finances and assessing its efficiency. Regardless of the frequently exposed need for a multi-criteria approach to the essence of an enterprise’s objective, in addition to its economic expectations (while also considering the social expectations that are formulated by the numerous enterprise stakeholders) [5,6], the area of special interest is, therefore, their ability to create value efficiently in the cases of the mentioned companies. Therefore, any decisions that are made by the managers of those companies must also be focused on maximizing their value-creation efficiency. As a result, it is the market perspective that is of key significance from the point of view of making management decisions and the assessment of their efficiency. The market perspective most fully reflects the expectations of the three mentioned groups of enterprise stakeholders. In this context, the authors noticed an interesting research gap that was related to highlighting the decision-making function of the market-performance measures of an enterprise that are oriented at measuring and assessing the effectiveness of enterprise-value creation. This function is related to the use of the above-mentioned measures as the bases for making management decisions and assessing their effectiveness. Therefore, the aim of this article is to present and exemplify the possibility of using value-creation measures for the needs of financial management, with a particular emphasis on making management decisions and assessing their efficiency.

The fulfillment of the mentioned objective is related to the necessity of answering the following research questions:

• What was the influence of the development of enterprise-efficiency research tools on the criteria and methods of making management decisions and their assessment?
• Looking from the point of view of financial management, what is the usefulness of the value measures (including making management decisions and evaluating them in an enterprise)?
• Does the size of the companies measured by the values of their total assets influence the value-creation efficiency and the level of the market rate of return of the studied companies?
• What was the impact of the capital structure on the market value of the studied companies?

By providing answers to the formulated research questions (which enabled us to fill the research gap and realize the purpose of the article), we treat the features of originality of the conducted research as its key achievement.

As the objects of empirical research, we chose companies from the energy sector that are listed on the Polish capital market—on the Warsaw Stock Exchange—and are part of the WIG-Energia (WIG-Energy) sector index. WIG-Energia is a sector index that includes energy companies that participate in the WIG index (the main index of the Polish Stock Exchange). The WIG-Energia index currently includes 13 companies. When examining the above-mentioned companies from the point of view of the effectiveness of value creation, it should also be noted that the energy sector is one sector that is of strategic significance for the whole economy. This fact has been confirmed by, among others, the current situation on the global fuel and energy market that is being caused by the war in Ukraine and the related sanctions that have been imposed on Russia (an important supplier to the world markets of natural gas, crude oil, and coal). Thus, the efficiency of the functioning of the mentioned companies is also an object of special interest to the state (as their important stakeholder) (A broader description of the energy sector in Poland is included in Article [7]).

The following research methods were used in the article:

• Methods for analyzing and evaluating literature that presents current scientific achievements in the field under study;
• Statistical methods in the form of descriptive parameters such as average and variability measures as well as in the form of mathematical-statistics methods for the analysis of interdependence of phenomena [6]; listed statistical methods have been used to characterize and compare analyzed energy-sector companies with the use of selected economic values and indicators, as well as to quantify the determinants of value-creation efficiency of those companies;
• Methods of tabular and graphical presentation of the quantified determinants of value-creation efficiency of the analyzed energy-sector companies.

The article is structured as follows. First, we present the theoretical background according to the market perspective of the efficiency assessment in enterprise management, followed by a description of the applied materials and methods. The next section presents our research results, as well as a discussion. Finally, we present the conclusions that resulted from our conducted research.

2. Market Perspective of Efficiency Measurement in Financial Management—Theoretical Background

The emergence, improvement, and development of the applications of the market measurement of enterprise efficiency that are related to the measurement of the partial and synthetic effects of its value creation are a consequence of the development of economies, the transformations of business models, and the mechanism of enterprise functioning. The mentioned circumstances mean that the efficient management that is related to the permanent process of making decisions that are focused on fulfilling an enterprise’s objectives requires the use of efficiency measurement tools that enable us to quantify and assess changes in the enterprise’s market value and the efficiency of its creation.

An enterprise-efficiency measurement is based on the requirements of the economic-value-measurement theory as a new book paradigm that created a need for developing analytical tools that are focused on the consideration of market determinants of enterprise efficiency. The following transformations were of key significance from the point of view of efficiency assessment:

• The growing importance of financial markets, which has led to the identification of capital market indicators and the analysis of the market value of shares and capital, based on their use as areas of indicator analysis of the company, among other things [8];
• The creation and popularization of the cash-flow concept, with its use for the needs of business valuation [9];
• The creation and development of applications of value-based management—the effects of which are primarily pioneer works by T. Copeland, T. Koller, J. Murrin [10], J.M. McTaggart, P.W. Kontes, M.C. Mankis [11], A.P. Black, P. Wright, J.E. Bachman [12], J.A. Knight [13], and J.D. Martin, J.W. Petty [14];
• The creation and development of enterprise value-creation measures, which are the bases of market perspective of study on efficiency; in this regard, the most important were works by G.B. Steward [15], A. Ehrbar [16], and S.D. Young and S.F. O’Byrne [17], who indicated new directions of evolution in perceiving and diagnosing enterprise efficiency related to the new paradigm of economic-value measurement;
• The creation and development of such value-based management instruments as business-value analysis, value controlling, pro-value motivation systems, and pro-value restructuring [18];
• The development of business-valuation methods through the use of value measures for the needs of a business-valuation account [19];
• Creating deterministic models of cause analysis referring to changes in enterprise value, and integrating book, cash, and market perspectives, which are used for the needs of enterprise-value analysis [20], value controlling [21], and pro-value restructuring [22];
• The use of book, cash, and market-efficiency measures for the needs of creating pro-value motivation systems for managers [23,24];
• The creation of comprehensive performance-measurement systems and business performance-measurement systems as examples of the integration of absolute and relative book, cash, and market measures [25,26];
• The isolation of the area of value-based restructuring within existing restructuring processes and its implementation as a tool for the growth of enterprise value-creation efficiency [27];
• The growth of the significance of innovation in shaping enterprise-value and the isolation of methods that are dedicated to assessing enterprise innovativeness in the context of efficiency of the innovation-management process [28,29];
• Creating business models that are focused on increasing the effectiveness of creating enterprise value [30,31];
• The use of value measures for the needs of building bankruptcy-prediction models, setting a new direction for developing discriminant-analysis in this regard [4].

The need to quantify the business-value-multiplication process in order to enable us to assess the fulfillment level of the basic financial objective of an enterprise and the rationalization of the decision-making process in this regard requires the use of adequate efficiency measures that are purposefully defined as market measures or value-creation measures. These measures occur in the form of absolute measures and relative measures; the former enable us to measure the value stream that an enterprise generated during a single period or over subsequent periods, while the latter is measures enterprise efficiency—not only from the point of view of the generated values but also via their reference to the value or cost of the capital that is engaged to achieve specific absolute effects. Absolute measures and relative measures can take the form of internal measures (based on quantifying the internal effects of value-creation in an enterprise) and external measures (also considering the verification of the business value and the capital-market mechanism) at the same time. A synthetic classification of enterprise-efficiency market measures is shown in

Table 1. Market measures of enterprise efficiency. Source: own study based on [15,16].

	Absolute Measures	Relative Measures
Internal measures	Measures based on economic-profit concept measures of value added for shareholders	Standardized measures based on economic-profit concept Capital cost-efficiency measures Value-creation indices
External measures	Measures of value-added Measures of enterprise value	Capital-market indicators Indicators of market rates of return for shareholders

.

The experiences that have resulted from the use of the market perspective of efficiency measurement and its integration with the book and cash perspectives have contributed to the emergence of new analytical solutions for various scopes of performance measurement in recent years. In this context, the following suggestions are interesting in this regard:

• The use of managerial cash-flows in analyzing the financial condition of geothermal companies in Poland [32];
• The financial assessment of renewable-energy projects using book and cash measurements [33];
• The value-creation performance evaluation for Taiwanese financial holding companies [34];
• Using the concept of value added for purposes of measuring and assessing the effectiveness of intellectual capital [35];
• The use of EVA as a market measure of efficiency in performance management from the point of view of growth efficiency [36];
• The analysis of creating and distributing value-added from the perspective of company stakeholders [37].

We are convinced that the proposal to use the market perspective of effectiveness research for the purposes of management decision-making will be a reasonable complement to and development of the above-mentioned research. In this regard, we identify a significant gap in the research on the criteria for management decision-making and assessing its effectiveness. Noticing the need to ensure the cohesion of the management decision-making process in an enterprise with the criteria of its efficiency and the principles of the pro-value motivation of managers, the authors therefore formulated a postulate for using the market perspective of efficiency measurement for the needs of decision-making, which would contribute to the growth of enterprise market-value and its creation efficiency. This is important because, with the emergence and development of the applications of the value-based management concept, the systems of rewarding managers have spread; this is based on the use of value-creation measures to stimulate the pro-value system of making decisions in an enterprise, among others. This exposes the decision-making function of the mentioned measures, thereby completing their functions of information, control, and assessment; thus, we indicate a new area of using the market perspective of studying efficiency in addition to the existing previously mentioned areas.

3. Materials and Methods

The study involved companies that represented the energy sector, were listed on the Warsaw Stock Exchange (WSE), and were included in the WIG-Energia index. The time span of the analysis includes seven years in total; namely, the period of 2014–2020.

The list of the studied enterprises is presented in

Table 2. List of energy-sector companies listed on Warsaw Stock Exchange (WSE). Source: own study based on https://www.biznesradar.pl/gielda/sektor:ene (accessed on 20 October 2022).

Company’s Full Name	Company’s ID	Date of Debut on WSE	Major Shareholders
Elektrociepłownia Będzin S.A.	BEDZIN	December 1998	W. Witkowski—35.31% VALUE Investment Fund—10.76% K. Kwiatkowski—10.37% BGK—9.89%/** Familiar S.A., SICAF—SIF—9.76% AutoDirect S.A.—8.19% State Treasury of Republic of Poland/*—5.00%
ČEZ A.S.	CEZ	October 2006	State Treasury of Czech Republic/*—69.78%
ENEA S.A.	ENEA	January 2009	State Treasury of Republic of Poland/*—42.92%
AB Inter RAO Lietuva	INTERAOLT	December 2012	RAO Nordic OY/***—51.00% UAB Scaent Baltic—29.11%
Zespół Elektrociepłowni Wrocławskich Kogeneracja S.A.	KOGENERA	May 2000	PGE Group S.A.—58.07%
Polenergia S.A.	PEP	May 2005	MANSA INVESTMENT—42.84% BIF IV Europe Holdings Limited—31.91%
PGE Polska Grupa Energetyczna S.A.	PGE	December 2009	State Treasury of Republic of Poland/*—60.86%
Tauron Polska Energia S.A.	TAURONPE	June 2010	State Treasury of Republic of Poland/*—30.06% KGHM Polska Miedź S.A.—10.39%/****
Zespół Elektrowni Pątnów-Adamów-Konin S.A.	ZEPAK	October 2012	Z. Solorz with subsidiaries—65.96%

Designations: /*—state-owned shares; /**—Bank Gospodarstwa Krajowego—state-owned Polish bank; /***—major shareholders of RAO Group are Russian state-owned entities; /****—major shareholder is State Treasury of Republic of Poland.

, along with the dates of their debuts on the stock exchange and their major shareholders.

Based on the data that is presented in Table 2, we can observe that, out of the companies that qualified for the study, the company that has been listed the longest is Elektrociepłownia Będzin S.A. (with more than 20 years of activity on the market), and the shortest is AB Inter RAO Lietuva. Two companies that were included in the WIG-Energia index (as of October 2022) did not qualify for the study, namely, ML System S.A., and Photon Energy N.V. This was due to the short periods of their presence on the WSE (since 2018 and 2021, respectively). As a result, this made it impossible for us to conduct a comprehensive analysis and assess the value-creation efficiency with the use of market measures in the studied time-horizon in the case of these companies. Among the studied enterprises, there were two foreign companies that were included in the WIG-Energia index: ČEZ A.S. (from the Czech Republic), and AB Inter RAO Lietuva (from Lithuania). To carry out the analysis and assess the value-creation efficiency of the studied companies more precisely, they were divided into two groups that differed significantly with regard to their different values of total assets. This division resulted from our striving to ensure the high economic comparability of the studied companies. For the needs of our analysis, two groups that represented the energy sector were isolated:

• Group A—larger companies whose values of total assets were more than PLN 12 billion (PLN—Polish national currency. Currency exchange rates (EUR/PLN) at the ends of each of the analyzed years: 2014—4.2623; 2015—4.2615; 2016—4.4240; 2017—4.1709; 2018—4.30000; 2019—4.2585; 2020—4.6148. Current exchange rate as of October, 28 2022: 4.7199) (TAURONPE, PGE, ENEA, and CEZ);
• Group B—smaller companies whose values of total assets were less than PLN 10 billion (BEDZIN, INTERAOLT, KOGENERA, PEP, and ZEPAK).

When analyzing the shareholding structure of the Group A companies, it should be noted that, in the case of all of the companies that were included in this group, the dominant shareholder is the state treasury; this is a consequence of recognizing the strategic importance of these companies for the functioning of economies. Significant state involvement (direct and indirect) in the ownership structures of those companies that were included in Group B applies to such entities as BEDZIN, INTERAOLT, and KOGENERA. The ability of the state to influence the decision-making processes in companies in which it is a dominant or significant shareholder may lead to these companies treating political goals as being superior to economic goals in many cases. The state is a political institution, not an economic one; therefore, its priorities are often different than those of private investors. Thus, in the case of most of the analyzed companies in the energy sector, the role of the state as an important stakeholder of an enterprise results not only from the influence of the state as an entity in the regulatory sphere (which applies to all enterprises operating in the economy) but also from its involvement as an investor in or shareholder of the companies.

Table 3. Selected descriptive statistics for selected values and economic indicators that describe studied companies from energy sector during period of 2014–2020. Source: own calculations.

Book Values and Ratios	Min	Me	Max	Ku	Sk
Group A companies
Sales revenues (in 1000 PLN)	9,848,392.00	21,733,700.00	45,766,000.00	−0.642	0.335
Net profit (in 1000 PLN)	−3,928,000.00	933,831.00	3,657,000.00	0.035	−0.721
Assets in total (in 1000 PLN)	18,108,040.00	51,606,883.00	123,140,887.00	−1.142	0.512
D/E	0.475	1.002	2.004	−0.200	0.559
Group B companies
Sales revenues (in 1000 PLN)	135,965.00	1,045,992.00	3,448,712.00	−1.247	0.408
Net profit (in 1000 PLN)	−1,879,808.00	40,949.00	250,286.00	22.988	−4.493
Assets in total (in 1000 PLN)	173,054.00	2,325,690.00	6,867,688.00	0.342	0.700
D/E	0.429	1.126	6.127	6.240	2.383

Designations: Min—minimal value; Me—median; Max—maximum value; Ku—kurtosis; Sk—skewness; D/E—debt-to-equity ratio.

presents descriptive statistics (measures of central tendency and measures of dispersion) for selected values and economic indicators that characterize the studied companies during the analyzed period.

Based on the data that is included in Table 3, we can claim that the median value of the sales revenues that were achieved by the studied Group A companies of the energy sector in Poland was more than 20 times greater than the median value of the Group B companies. On the other hand, the greatest loss made by the Group B companies was less than half of those from Group A. In addition, the values of the statistical measures for the D/E ratio are worth noticing; what results from these is that the value of the liabilities of at least half of the studied Group B energy companies exceeded the value of their equities. On the one hand, this proves the greater earning and developmental potential of the mentioned energy companies; on the other hand, the allocation of capital in such enterprises is burdened with higher risk, related to the probability of the occurrence of problems with debt servicing.

Interesting conclusions are provided by an analysis of the differentiation of the companies that belong to Groups A and B, based on the use of measures of dispersion such as kurtosis and skewness. These are measures that show the degree and direction of the dispersion of the analyzed values (variables) as related to the mean, as well as the degree and direction of the distribution asymmetry. In each case, the reference object is the normal distribution. When comparing the values of kurtosis and skewness for the analyzed variables (absolute values and debt ratio), it should be noted that the companies that belong to Group A are more similar to the normal distribution than the companies of Group B. With regard to the Group A companies, kurtosis takes a negative value for three variables (sales revenues, total assets, and D/E-ratio), which means that we are dealing with a platykurtic distribution in the cases of these companies. This proves the large diversification of the values of the analyzed variables. Only in the case of net profit does kurtosis take a positive value. This creates a situation that is characteristic of the leptokurtic distribution, in which the values of the variables cluster around the mean. The situation is significantly different in the case of the Group B companies. For three variables (net profit, total assets, and D/E-ratio), kurtosis assumes positive values (leptokurtic distribution)—for net profit, it is clearly the highest value (22.988) among all of the kurtosis values. For only one variable (sales revenues) is kurtosis negative (platykurtic kurtosis).

In the case of the second measure of dispersion (which is skewness), its values take the same sign in both groups of companies. Positive skewing (right-skewed distribution) occurs in the case of three variables (sales revenues, total assets, and D/E-ratio), which means that most of the values of these variables are lower than the mean value. However, the skewness measures have similar values for both groups of companies in the case of the first two variables, while a much higher value of the measure is clearly visible for those companies that belong to Group B in the case of the third variable (D/E-ratio); therefore, the peak distribution of the variables for this group of companies is shifted more to the left than for the Group A companies. Negative skewing (left-skewed distribution) applies only to net profit. Again, the Group B companies are characterized by a much higher absolute value of the skewness measure; therefore, the peak of the distribution of the variables for this group of companies is shifted more to the right, as compared to the Group A companies.

In order to conduct the measurement and assessment of the value-creation efficiency of the studied companies, value measures whose characteristics are presented in

Table 4. Value measures used for measurement and assessment of value-creation efficiency of studied energy-sector companies. Source: own study based on [10,14].

Measures	Calculation Formulas	Designations
TSR	$\frac{DP{S}_t+\left(P_t-P_{t-1}\right)}{P_{t-1}}·100\%$	TSR—total shareholders return in period t $DP{S}_t$$—\mathrm{dividend} \mathrm{per} \mathrm{share} \mathrm{in} \mathrm{period} t;$ Pt—market price of shares at end of period t; $P_{t-1}$—market price of shares at end of period t − 1.
EVC	$N{P}_t-E_{t-1}·c_{E,t-1}$	$\mathrm{EVC}—\mathrm{estimated} \mathrm{value} \mathrm{created} \mathrm{in} \mathrm{period} t;$ NPt—net profit in period t; $c_{E, t-1}$—cost of equity at end of period t − 1; $E_{t-1}$—equity at end of period t − 1.
SEVC	$\frac{EVC}{E_{t-1}}·100\%$	SEVC—standardized estimated value created in period t; other designations—as before.

will be used.

4. Results and Discussion

The analysis and assessment of the value-creation efficiency in this paper were conducted in two stages:

• Measurement of direct effects of shareholder value-creation;
• Measurement of value-creation efficiency in studied companies.

In the first stage, the total-shareholder-return measure (TSR) was used, in order to measure the direct effects of the shareholder value-creation. The shaping of the maximum and minimum shareholder-return of the analyzed energy companies and the risk of the capital allocation measures in the studied portfolios of the companies are presented in Figure 1.

Based on the data that is included in Figure 1, we can see that the volatility of the rates of return on the Group B companies was higher than the standard deviation of the rates of return on the portfolio of the Group A companies in as many as five of the analyzed periods. At the same time, this makes us believe that investing in the portfolios of smaller energy companies is related to a higher risk than in the case of those companies with more assets. This is also proven by the values of the minimum and maximum shareholder-returns that were achieved by the energy-company portfolios during the studied period. In four of the studied periods (approximately 57% of our observations), the maximum rates of return on the portfolio of the Group B companies exceeded the highest results for investors that were achieved by the Group A companies. However, it should be emphasized that the Group B companies marked the highest levels of shareholder wealth destruction, as compared to the minimum rates of return on the portfolio of the larger energy entities during six of the discussed periods (approximately 86% of our observations).

In the second stage of the analysis, two value measures that were based on the economic-profit concept were used: estimated value created (EVC), and standardized estimated value created (SEVC); the obtained results were compared to the debt-to-equity ratio (D/E). To determine the equity cost of the studied energy-sector companies, the Damodaran model was used [38]. The essence of this method consisted in estimating the cost of equity of a company embedded in the realities of the American economy, which is also the basis for comparisons with a company that operates on the local market—taking the specifics of the studied company (sector and financial structure) into account. The values of the parameters that were used for the analysis are presented in

Table 5. Parameter values for the application of Damodaran model. Source: own study based on https://www.investing.com/rates-bonds/poland-10-year-bond-yield (accessed on 15 July 2021); http://pages.stern.nyu.edu/~adamodar/New_Home_Page/dataarchived.html#returns (accessed on 15 July 2022).

Book Values and Ratios	Unit of Measurement	2014	2015	2016	2017	2018	2019	2020
Average geometrical return on ten-year treasury bonds of American Government (estimated since 1928)	%	5.00	4.96	4.91	4.88	4.83	4.88	4.95
Deleveraged “β” index for energy sector (“Power”) from American market	-	0.52	0.49	0.32	0.32	0.34	0.37	0.38
American market risk premium (MRP)	%	5.75	6.25	5.69	5.08	5.96	5.2	4.72
Polish credit-default-swap premium (CDS)	%	1.73	1.4	0.97	0.57	0.97	0.85	0.75
Standard deviation of return on Polish Treasury Bond Market	%	0.74	0.38	0.29	0.21	0.18	0.43	0.75
Standard deviation of return on Polish Stock Market (WIG)	%	3.30	2.84	4.23	3.43	4.61	2.68	10.36
Standard deviation ratio of returns on Polish Stock and Bond Markets	%	0.045	0.074	0.149	0.166	0.250	0.063	0.138
Inflation rate of Polish economy	%	0	0.9	−0.6	2	1.6	2.3	3.4
Inflation rate of American economy	%	0.8	0.7	0.21	1.9	1.9	2.3	1.2

, whereas the median and arithmetic mean of the estimated equity cost of the studied energy companies during the period 2014–2020, are presented in Figure 2.

When observing the mean and median of the equity cost values, it should be noted that the growth of the cost that was related to capital allocation in the energy companies was observed during the period 2014–2015; this proves the progressive increase in the risk of their activities. During the years of 2015–2017, the cost of equity decreased; during the following years, (2017–2019), there was a slight upward trend; and in 2020, another non-significant decrease in the cost of equity occurred (approx. 9%). The highest average level of equity cost was marked in 2018 (at a level of approximately 21–22%). During the last year that was included in the analysis, the average and middle levels of the equity costs for the studied group of enterprises decreased by more than ten percentage points. The level of the estimated value that was created with the selected statistical measures is presented in

Table 6. Estimated value created (EVC) of studied energy-sector companies during period 2014–2020 (in 1000 PLN). Source: own calculations.

Company Name	2014	2015	2016	2017	2018	2019	2020
Group A companies
TAURONPE	−431,919.68	−3,900,879.67	−1,793,366.53	−1,032,338.98	−3,460,714.73	−1,766,197.74	−2,487,877.00
PGE	39,741.24	−7,627,601.37	−2,221,388.48	−2,741,389.99	−6,546,168.84	−8,121,459.82	−3,387,327.36
ENEA	−45,047.13	−1,768,021.77	−729,741.17	−742,574.08	−2,101,664.73	−871,086.69	−2,234,337.00
CEZ	−499,868.30	−1,780,865.12	−4,068,499.89	−3,990,563.52	−9,356,648.30	−1,807,850.14	−3,231,543.97
Min	−499,868.30	−7,627,601.37	−4,068,499.89	−3,990,563.52	−9,356,648.30	−8,121,459.82	−3,387,327.36
Me	−238,483.41	−2,840,872.39	−2,007,377.51	−1,886,864.49	−5,003,441.79	−1,787,023.94	−2,859,710.49
Max	39,741.24	−1,768,021.77	−729,741.17	−742,574.08	−2,101,664.73	−871,086.69	−2,234,337.00
Group B companies
BEDZIN	10,360.72	−11,055.20	−12,711.55	−23,036.18	−52,989.85	−137,344.57	-(Negative equity)
INTERAOLT	−44,773.15	−1,808,953.28	−683,574.80	−694,979.76	−2,036,716.00	−821,841.74	−1,153,458.31
KOGENERA	−53,056.34	−5372.81	−4968.67	−48,254.31	−254,559.80	−40,859.56	875.73
PEP	−16,816.55	−99,475.04	−318,144.45	−286,179.17	−282,219.03	2447.40	−1723.55
ZEPAK	−256,707.60	−2,397,076.57	−20,647.84	−125,656.00	−967,071.65	−621,294.62	−343,920.56
Min	−256,707.60	−2,397,076.57	−683,574.80	−694,979.76	−2,036,716.00	−821,841.74	−1,153,458.31
Me	−44,773.15	−99,475.04	−20,647.84	−125,656.00	−282,219.03	−137,344.57	−172,822.06
Max	10,360.72	−5372.81	−4968.67	−23,036.18	−52,989.85	2447.40	875.73

.

The level of the EVC measure was estimated for seventy-two cases in total; of these, a positive level of economic profit was marked in only three cases (approximately 4% of our observations). The highest level of economic destruction of the equity value that was invested by the owners was marked by CEZ in 2018—more than PLN 9.3 billion. On the other hand, the greatest increment of the estimated value created was reached by PGE in 2014—more than PLN 39.7 million. When analyzing the shaping of the median of estimated value that was created for both of the studied groups of enterprises, we can observe fluctuations in the economic-loss levels during the period 2014–2017. Over the whole period, the most critical year with regard to the negative level of EVC value was 2018, with median loss-values of PLN −5 billion (for the Group A companies) and PLN −282 million (for the Group B companies). It is worth noting that companies such as CEZ and KOGENERA achieved positive financial results on their operating levels over the whole analyzed period; thus, they were distinguished by book profitability. When considering also the necessity of the charge for the equity cost, the conducted analysis ultimately showed that the mentioned companies turned out to be unprofitable from the point of view of their value-creation efficiency. This confirms a significant difference between the accounting perspective of the enterprise’s efficiency assessment (without taking the cost of equity into account) and the market perspective of this assessment (taking the cost of the entire enterprise’s capital into account).

The following section studies the economic profit-creation efficiency in the relative approach; the obtained results are then compared to the equity-debt ratio (

Table 7. SEVC and D/E ratios of studied energy-sector companies during period 2014–2020. Source: own calculations.

Company Name	Ratio	2014	2015	2016	2017	2018	2019	2020
Group A companies
TAURONPE	SEVC	−2.43%	−21.68%	−11.17%	−6.19%	−19.15%	−9.58%	−13.68%
	D/E	0.920	0.998	1.006	0.981	1.013	1.195	1.540
PGE	SEVC	0.09%	−16.99%	−5.50%	−6.41%	−14.12%	−16.99%	−8.01%
	D/E	0.475	0.517	0.577	0.556	0.588	0.800	0.919
ENEA	SEVC	−0.39%	−14.66%	−6.02%	−5.71%	−15.01%	−5.79%	−15.46%
	D/E	0.501	0.896	0.886	1.022	0.991	1.122	1.483
CEZ	SEVC	−1.26%	−4.36%	−9.48%	−9.33%	−22.54%	−4.52%	−7.69%
	D/E	1.362	1.214	1.414	1.462	1.957	1.759	2.004
Group B companies
BEDZIN	SEVC	12.18%	−9.13%	−9.34%	−14.79%	−31.23%	−79.74%	-
	D/E	0.429	4.183	3.665	3.186	2.847	6.127	-
INTERAOLT	SEVC	−0.39%	−15.06%	−6.03%	−5.71%	−15.57%	−5.83%	−7.98%
	D/E	0.507	1.028	1.015	1.165	1.126	1.272	1.013
KOGENERA	SEVC	−4.43%	−0.43%	−0.36%	−3.37%	−16.90%	−2.79%	0.06%
	D/E	0.665	0.647	0.595	0.544	0.626	0.657	0.699
PEP	SEVC	−3.26%	−7.46%	−22.77%	−22.58%	−23.88%	0.21%	−0.13%
	D/E	1.048	1.289	1.347	1.254	1.576	0.915	1.129
ZEPAK	SEVC	−6.79%	−62.76%	−1.10%	−5.86%	−42.71%	−36.83%	−29.29%
	D/E	0.798	1.639	1.240	0.968	1.295	1.651	2.026

). In order to examine the power and direction of the relationships between the two analyzed variables (D/E and SEVC), the Pearson correlation coefficient is used (Figure 3). Referring to the data that are included in Table 7, we find that the highest level of economic deficit over the whole analyzed period was marked for CEZ (of the Group A companies) in 2018 and BEDZIN (of the Group B companies) in 2019. In turn, their levels of economic loss were −22.54 and −79.74%, respectively; this means that, for every PLN 1 of capital that was invested by the owners, there was as much as PLN 22.54 and 79.74 of economic loss, respectively.

The conducted empirical research that referred to the direction and power of the relationship between the debt level of the energy-sector companies in Poland and the efficiency of the owners’ economic-,value creation became the basis for drawing the following conclusions:

• In the cases of eight out of the nine analyzed companies (89%), there was a negative correlation; this means that the increase in the debt levels as compared with the share of equities negatively (degressively) affected the value-creation efficiency for the owners of the energy entities. Only in the case of KOGENERA was there a slight positive correlation, proving that the debt had a positive impact on the aforementioned efficiency.
• With reference to the Group A companies, two strong relationships between the studied variables (for ENEA and CEZ), one case of an average relationship (for PGE), and one case of weak correlation (for TAURONPE) were observed.
• In four cases of the Group B companies (the largest number in the whole study), a very high correlation was found between the analyzed variables (for BEDZIN, PEP, and ZEPAK); in one case, the conducted research proved an average correlation for INTERAOLT, and in one mentioned case (KOGENERA), there was a slight positive correlation.
• In four of the five discussed cases (84%), there was a very high relationship level among the studied variables in the Group B companies; this supports the assertion that the growth of the debt level among those energy companies with relatively smaller assets can lead to a dilution of the value-creation efficiency for the owners.

5. Conclusions

Efficient financial management is a constant process of making decisions that are focused on fulfilling a company’s strategic and operating objectives. Nowadays, managers who perform management functions have a number of instruments that can help rationalize this process—particularly in the context of diversifying stakeholders’ expectations of the results. In a special way, this article focused on the conditions and problems that are related to the financial decision-making processes that are aimed at increasing efficiency in the area of building enterprise-value. These require the use of tools for efficiency measurement that enables management to quantify and assess changes in an enterprise’s market value and the efficiency of its creation. Therefore, these measures of enterprise value-creation were presented and used within the conducted research; they are particularly important from the point of view of the decision-making process and the assessment of its efficiency. It has also been proven that it is the market perspective that is of key significance from the point of view of the criteria of making management decisions. The market perspective reflects the expectations of the majority of the company stakeholders to the fullest. Therefore, the emergence of the market perspective on the study of business efficiency has, to a large extent, made it possible to improve the criteria and methods for making management decisions and evaluating their effects. This is particularly important in the cases of the listed companies, as it has contributed to the consistency of the mentioned criteria and methods, together with the expectations of the shareholders of these companies, in terms of maximizing their market values. Thus, the conducted analysis allowed us to answer the first and second research questions.

In conclusion, the study showed that the allocation of capital in the listed energy companies during the period f 2014–2020 was subject to a relatively high risk of losing the economic value of the invested capital. In terms of asset value, dividing the studied group of companies into portfolios of two groups of companies (A and B) additionally showed that the volatility of the market and the equity returns for the smaller companies (Group B) was higher than it was for the Group A companies. This therefore answers the third research question.

Referring to the fourth research question, it should be noted that, in the cases of four companies (out of the nine studied), the increased levels of debt in relation to the values of the equities of the smaller energy companies (Group B) led to a deepening destruction of the equity value for the owners.

Due to the relatively small research sample, however, it should be emphasized that the conducted analyses should be treated primarily as a basis for further multidirectional research on enterprises that operate in other branches of the economy, using more-advanced statistical instruments as well as alternative measures for measuring and assessing the effectiveness of value creation. In future research, it will also be important to take into account the sectors of the economy that operate to the greatest possible extent according to free market principles, without a significant impact of control and regulatory mechanisms (as is the case in the energy sector).