Methods for assessing the commercial effectiveness of the project. Methodology for assessing the commercial effectiveness of an organization's investment project

The indicators of the commercial efficiency of an investment project include indicators formed on the basis of the indicator of the absolute effectiveness of investments. The absolute efficiency of investments (investment project) can be calculated by the formula

An investment project is effective if the indicator of absolute investment efficiency is greater than zero. The calculation of performance indicators is based on authoritative international methods for evaluating the effectiveness of investments.

To determine the commercial efficiency of an investment project, we calculate the following indicators:

integral economic effect (other names - net present value, NPV, integral effect, Net Present Value, NPV);

internal norm profitability (other names - IRR, internal discount rate, internal rate of return, Internal Rate of Return, IRR);

payback period;

yield indices;

other indicators indirectly (sufficiency condition) characterizing the effectiveness of the project.

The integral economic effect is defined as the sum of economic effects for the calculation period, discounted to the beginning of the first step. In other words, the net present value characterizes the excess of the discounted inflow of funds over the discounted outflow of funds for the billing period:

If the IEI is positive, then the project is efficient (at a given discount rate) and can be accepted for implementation. The larger the IEE, the more efficient the project, which means that it should be more preferable for the investor.

Properties of the integral economic effect:

the greater the value of capital investments, the lower the IEE;

the later the moment of the beginning of the return on investment comes, the smaller the IEE;

the longer the billing period, the larger the IEE, as a rule. At the same time, it should be borne in mind that an excessive increase in the duration of the period of return on capital investments is not always advisable. With an increase in the return period (billing period), the increase in the value of the IEE decreases and tends, as a rule, to zero, and the absolute value of the IEE -

4) with an increase in the discount rate, the IEE decreases. The dependence of the IEE on the discount rate is shown in fig. 7.2 (/ - discount rate).

5) it is necessary to compare projects in terms of IEE, taking into account barrier points. The barrier point (BP) is the discount rate at which the graphs of IEE(i) functions intersect investment projects and which is determined from the equality of the IEE equations for investment projects (Figure 7.3):

IEE1 = IEE2.

The methods for calculating barrier points are the same as for calculating the IRR.

The internal rate of return (IRR) is such a discount rate at which the integral economic effect is equal to zero.

The value of IRR, at which the project can be considered effective, must exceed the design value of the reference rate, or at least be equal to this value. Proof of this fact can be obtained using a graphical representation of the function of the integral economic effect of the reduction rate.

Graphically, IRR can be determined at the point of intersection of the IEE (/) function with the abscissa axis (Fig. 7.4).

The value of GNI is determined from the equation

Finding the exact solution of the IEE = 0 equation by regular methods is not always possible; therefore, finding the IRR is carried out using numerical methods, which make it possible to find the real solution of this equation with a given accuracy after several iterations. You can use numerical methods:

1) half division method. This method is implemented using the formula

The payback period of the project is the period of time (from the beginning of the project), after which the integral economic effect becomes and in the future remains non-negative. This indicator allows you to determine how long it will take the investor to recover the investment costs. The shorter the payback period, the faster the costs will be recovered. The project is effective if the payback period is less than the estimated period.

The payback period is calculated from the equation

Graphically, the payback period can be determined at the point of intersection of the function IEE (t) with the abscissa (Fig. 7.5). The graph of the IEE(t) function is called the financial profile of the investment project.

Finding the exact solution of the IEE(t) = 0 equation by regular methods is also not always possible. Therefore, the determination of the payback period is carried out approximately graphically or using the similarity property of triangles. In the latter case, to clarify the position of the payback moment, it is assumed that within the step at which the project payback is achieved, the balance of the accumulated flow changes linearly.

Profitability indices characterize the relative "return of the project" on the invested funds. They can be calculated for both discounted and undiscounted cash flows. When evaluating efficiency, the following is often used: cost-benefit index (IRC) - the ratio of the amount of inflows of funds (accumulated receipts) to the amount of outflows of funds (accumulated payments). Cost return index is calculated by the formula

discounted cost yield index (IDdz) - the ratio of the amount of discounted inflows of funds (accumulated receipts) to the amount of discounted outflows of funds (accumulated payments). The yield index of discounted costs is calculated by the formula

The index of return on investment (IRI) is the ratio of the economic effect (EE) to the accumulated volume of investments increased by one:

If there are several projects, the criterion for selecting the most attractive project for this indicator is the condition

An investment project is effective if the discounted investment return index is greater than one. The proof of this fact is obvious, since if the IEE is greater than zero (the project is effective), then the fraction in the formula is greater than zero, which means that the investment return index is greater than one. If there are several projects, the criterion for selecting the most attractive of them by this indicator, as well as by the index of return on costs, is the condition

Indices of profitability of costs and investments exceed one, only for this flow the NH is positive.

Often, in addition to the index of return on investment, the overall return on investment (R^) is calculated, which is defined as the ratio of the IEE of the project to the discounted value of investment costs:

If a overall profitability investment is greater than zero, then the project is effective. This fact is obvious, since inequality (7.5) is satisfied if the numerator is greater than zero.

In fact, other indicators cannot be attributed to performance indicators, since they do not act as a criterion for the effectiveness of the project. This group of indicators is characterized by the fact that they may not always reflect the effectiveness of the project (they characterize the effectiveness indirectly, i.e. they are considered as a sufficient condition for efficiency). Their role is to evaluate the project in more detail from different angles. In other words, if these indicators exceed the criterion value, then this does not clearly imply the effectiveness of the project.

These indicators include the following.

Simple return on investment (RP), which is determined by the formula

Thus, we can formulate Theorem 1: if the project is efficient, i.e. the absolute efficiency of investments (E) is greater than zero, then the simple profitability, as well as the average profitability of investments, is always greater than zero; the reverse is not always true. Symbolically, this can be written as

The proof of this fact is quite obvious, since the amount of net profit received may not be enough to cover capital costs.

The break-even point (TB) shows the volume of production in physical terms, at which net profit is zero. The design break-even point is calculated for a specific period of time using the formula

Thus, we can formulate Theorem 2: if the project is efficient, i.e. the absolute efficiency of investments (E) is greater than zero, then the break-even point always does not exceed the projected production volume for the period (OP); the reverse is not always true. Symbolically, this can be written as

The evidence for this, as well as for return on investment, comes from the fact that the amount of net income generated may not be sufficient to cover capital costs.

It should be noted here that project profitability and efficiency are not synonymous. Profitability means the presence of net profit from the implementation of the project, and efficiency - the presence of a positive economic effect. An inefficient project can generate a profit, while an efficient project is always profitable.

Average capital growth rate (growth rate of return, GR). This indicator is based on the principle of accrual of interest and shows the increase in capital (values own funds investors) resulting from the implementation of the project. The total capital (K) for the billing period T is the initial amount of own funds invested in the form of capital investments (KVss), and the value of the economic effect, considered as capital gains. The economic effect can be understood as an integral economic effect. Thus, we can write the relation

It should be borne in mind that the calculation of performance indicators depends on the investment object. If capital investments are made in the current production, i.e. before and after their implementation, the same type of product is produced, then according to the Methodological Recommendations, it is necessary to use the incremental method. According to this method, when calculating performance indicators, incremental values of the economic parameters of the project are used, i.e. the difference between their design values and their values before the implementation of capital investments.

Let's consider some examples of calculation of indicators of commercial efficiency. As a rule, there are three typical situations for the implementation of capital investments:

capital investments in the existing production of final products intended for sale to the outside. Such capital investments may involve, for example, modernization, renewal, expansion of existing production;

capital investments in new production, involving the production of new types of products (works, services) for the enterprise, intended for sale to the outside;

capital investments in the production of semi-finished products, i.e. products that will be used at this enterprise in the following stages.

Let's consider the first case. In table. 7.1 presents the initial data of the investment project. Billing period project - 3 years. In the first half of the year, it is planned to make capital investments, in the subsequent period - industrial operation with access to the design volume of production.

As can be seen from Table. 7.1, the investment project provides for a change in the cost of production as a result of the influence of the following factors:

increase in production volume by 25%, which will lead to a reduction in the value of specific fixed costs;

increase in depreciation charges as a result of the commissioning of new fixed assets (depreciation charges are considered conditionally fixed costs).

The amount of depreciation per ton for the project (Atp) with the linear method of its accrual will be determined from the expression

Thus, despite the reduction in depreciation charges by one ton as a result of the increase in the volume of production under the project, there was an increase in specific depreciation charges due to the commissioning of additional fixed assets.

The sum of fixed costs in the full cost per tonne for the project (PZtp)

Presented in Table. 7.2. In this example, we will assume that the amount of expenses taken into account for the purposes of taxation of profits coincides with the amount of the full cost.

Table 7.2

Main basic and design economic indicators

From Table. Exhibit 7.2 shows that sales revenue, profit before tax and net income increased due to the increase in production volume and the decrease in total cost.

Since the implementation of capital investments is envisaged in the first half of the year, it is advisable to determine the duration of the step equal to half a year. Thus, the billing period is divided into six steps.

In table. 7.3 shows the flows of the main economic parameters of the project, as well as basic (pre-project) economic indicators. The values of the production volume are given for half a year, i.e. twice the annual value. At the first step, the flow elements are equal to zero, since the incremental method is used in the calculations.

The increase in net profit at a certain step is defined as the difference between the projected value of net profit at this step and the base value of net profit. For example, the increase in net profit in the second step is 58.2 million rubles. (100 million rubles - 31.8 million rubles).

The discounted increase in net profit at a certain step is calculated as the product of the increase in net profit at this step and the corresponding discount factor.

In table. 7.4 shows the calculation of the integral economic effect (last column and last line).

Capital investments are assimilated as follows: in the first half of the year - the acquisition and installation of fixed assets, in the second half of the year an additional amount of funds is advanced into working capital, as the volume of production increases.

Operating costs are defined as the difference between the full gross cost and the depreciation expense. In this case, the deduction of depreciation from expenses is due to the fact that depreciation is treated as an inflow of funds. At the first step, incremental values are equal to zero.

From Table. 7.4 shows that the integral economic effect of the investment project is 197.7 million rubles. Since this indicator is greater than zero, the project is effective. In this case, the increase in net income is considered in the project as an economic effect. After discounting and calculating the sum of the elements of the discounted increase in net income flow, the integral (total) economic effect is determined.

The payback period comes in the fourth step. In this case, it is possible to more accurately determine the payback period from the expression

Since the payback period is less than the estimated period, this shows the effectiveness of the project. On fig. 7.6 presents the financial profile of the investment project

The internal rate of return of the project is 50%. With this discount rate, the integral economic effect becomes equal to zero. Since the internal rate of return is greater than the project discount rate (9%), this shows the effectiveness of the project.

To calculate the index of profitability of costs and the index of profitability of discounted costs according to formulas (7.1) and (7.2), it is necessary to carry out intermediate settlements presented in table. 7.5.

Substitute the values found in Table. 7.5 into formulas (7.1) and (7.2). Get

Since the index of return on discounted costs is greater than one, it characterizes the project as effective.

The index of return on investment and the return on discounted investments will be calculated using formulas (7.3) and (7.4) according to the data in Table. 7.5. We get

Let's continue the example. Let us consider the second typical situation, when capital investments are made in new production, which involves the production of new types of products (works, services) for the enterprise, intended for sale to the outside. In this case, unlike the previous version, there will be no base (pre-project) values economic indicators, therefore, the incremental method is not used when calculating the indicators of commercial efficiency.

In table. 7.6 presents the initial data of the investment project. Similarly to the previous option, the estimated period of the project is 3 years. In the first half of the year, it is planned to make capital investments, in the subsequent period, industrial operation is envisaged with access to the design volume of production.

The main design economic indicators are presented in table. 7.7. In this example, we will also assume that the amount of expenses taken into account for profit taxation purposes coincides with the amount of the full cost.

Since the implementation of capital investments is envisaged in the first half of the year, it is advisable to determine the duration of the step, as in the first option, equal to half a year. Thus, the billing period is divided into six steps.

In table. 7.8 shows the flows of the main economic indicators of the project. The values of the production volume are given for half a year, i.e. twice the annual value. At the first step, the flow elements are equal to zero, since construction is carried out at this step.

In table. 7.9 shows the calculation of the integral economic effect. The discount factor is calculated based on the discount rate, which is 9% (4% - risk premium and 5% - rate of return). At the same time, the discount rate is reduced by half, since the step is equal to half a year. Capital investments are assimilated as follows: in the first half of the year - the acquisition and installation of fixed assets, in the second half of the year an additional amount of funds is advanced into working capital, as the volume of production increases.

From Table. 7.9 shows that the integral economic effect of the investment project is 662.3 million rubles. Since this indicator is greater than zero, the project is effective.

The payback period comes in the third step. In this case, it is possible to more accurately determine the payback period from the expression

Since the payback period is less than the estimated period, this shows the effectiveness of the project. On fig. 7.7 the financial profile of the investment project is presented.

The internal rate of return of the project is 132%, and since it is greater than the project discount rate (9%), this shows the effectiveness of the project.

To calculate the index of profitability of costs according to the formula (7.1), it is necessary to perform the intermediate calculations presented in Table. 7.10.

Substitute the values found in Table. 7.10 into formula (7.2) and obtain

The average simple return on investment is determined by the formula (7.7):

Based on the calculated indicators, a general conclusion can be drawn about the commercial effectiveness of the investment project.

Let's continue the example. Consider the third typical situation, when capital investments are made in the production of semi-finished products, i.e. products that will be used at this enterprise in the following stages. There is no selling price in this option. In addition, not the full cost will be known, but only the production or workshop cost. In this case, when calculating the indicators of commercial efficiency, the incremental method will be used.

In table. 7.11 the initial data of the investment project are presented. Similarly to the previous option, the estimated period of the project is 3 years. In the first half of the year, it is planned to make capital investments, in the subsequent period - industrial operation with access to the design volume of production.

The main basic and design economic indicators are presented in table. 7.12. In this example, we will assume that the costs included in the production cost will be expenses taken into account for profit tax purposes.

Since the reduction in production costs must be considered as an increase in profit before tax for the enterprise, then the inflow of funds will be profit before tax as the difference between the gross production cost before and after the implementation of the project, as well as an additional amount of depreciation.

Table 7.12

Main basic and design economic indicators

Since the implementation of capital investments is envisaged in the first half of the year, it is also advisable to determine the duration of the step equal to half a year. Thus, the billing period is divided into six steps.

In table. 7.13 shows the flows of the main economic parameters of the project, as well as basic (pre-project) economic indicators. The values of the production volume are given for half a year, i.e. twice the annual value.

The discount factor is calculated based on the discount rate, which is 9% (4% - risk premium and 5% - rate of return). At the same time, the discount rate is reduced by half, since the step is equal to half a year. The amount of the discounted increase in net profit is calculated in order to further calculate the return on investment.

In table. 7.14 the calculation of the integral economic effect is presented. Capital investments are assimilated as follows: in the first half of the year - the acquisition and installation of fixed assets, in the second half of the year an additional amount of funds is advanced into working capital, as the volume of production increases.

From Table. 7.14 shows that the integral economic effect of the investment project is 148.5 million rubles. Since this indicator is greater than zero, the project is effective.

The payback period comes in the fifth step. In this case, it is possible to more accurately determine the payback period from the expression

Since the payback period is less than the estimated period, this shows the effectiveness of the project. On fig. 7.8 the financial profile of the investment project is presented.

The internal rate of return of the project is 40.4%. Since this is more than the project discount rate (9%), the project is considered effective.

To calculate the index of profitability of costs according to the formula (7.1), it is necessary to perform intermediate calculations according to the data presented in Table. 7.15.

For this example we calculate only the discounted cost return index and the discounted investment return index.

Substitute the values found in Table. 7.15 into formula (7.2) and obtain

The investment project is effective, since the return on investment index is greater than one.

The total return on investment will be 0.458.

Simple return on investment is determined by the formula (7.6):

Based on the calculated indicators, a general conclusion can be drawn about the commercial effectiveness of the investment project.

More on the topic 7.3. Indicators of commercial efficiency of the investment project:

3. The effectiveness of the investment project: content, types and methods of evaluation

Chapter 8 ANALYSIS OF THE EFFICIENCY OF CAPITAL INVESTMENTS (REAL INVESTMENTS) - EVALUATION OF INVESTMENT PROJECTS

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Ministry of Education and Science of Ukraine

Kherson National Technical University

Faculty of Genetics

Department of Economics and Entrepreneurship.

ESSAY

discipline: "Investing"

on the topic: "Assessment of the commercial effectiveness of investment projects"

Completed by: 3zGB student

Checked by: assistant

Genichesk, 2007

1. general characteristics performance evaluation methods

Definition work economic efficiency investment project is one of the most critical stages of pre-investment research. It includes a detailed analysis and an integral assessment of the entire technical, economic and financial information collected and prepared for analysis as a result of work at the previous stages of pre-investment studies.

Methods for evaluating the effectiveness of investment projects are based primarily on comparing the effectiveness (profitability) of investments in various projects. At the same time, as an alternative to investing funds in the production under consideration, there are financial investments in other production facilities, placement of financial assets in a bank at interest or their circulation in securities. From the standpoint of financial analysis, the implementation of an investment project can be represented as two interrelated processes: the process of investing in the creation of a production facility (or capital accumulation) and the process of obtaining income from invested funds. These two processes proceed sequentially (with or without a gap between them) or in a certain time interval in parallel. In the latter case, it is assumed that the return on investment begins even before the investment is completed. Both processes have different intensity distributions over time, which largely determines the efficiency of investment.

The direct object of financial analysis is the cash flow characterizing both of these processes in the form of one combined sequence. In the case of production investments, the intensity of the resulting flow of payments is formed as the difference between the intensity (costs per unit of time) of investments and the intensity of net income from the project.

Net income is understood as the income received in each time interval from production activities, minus all payments associated with its receipt (current costs for wages, raw materials, energy, taxes, etc.). At the same time, depreciation repayment does not apply to current costs.

Efficiency evaluation is carried out by calculating a system of indicators or criteria for the effectiveness of an investment project.

All of them have one important feature. Expenses and incomes are spaced in time, reduced to one (base) point in time. The base point in time is usually the date of the project implementation, the date of commencement of production, or a conditional date that is close to the time of the calculation of the project's efficiency.

The procedure for bringing multi-time payments to the base date is called discounting. The economic meaning of this procedure is as follows. Let some rate be given loan interest r and a stream of payments (negative or positive t) whose beginning coincides with the base time of the reduction. Then the discounted value of the payment P(t), made at the moment, separated from the base one by t intervals (months, years), is equal to some value Pd(t), which, being issued at a loan interest rate r, will give the value P at the moment t (t). Thus, Pd(t) (1+r)t = P(t) , or the discounted payment value P(t) is:

The value of the loan interest r is called the discount rate (reduction) and, in addition to the meaning indicated above, is interpreted in economic literature as the rate (or degree) of preference for income received at the moment over income that will be received in the future.

When choosing a discount rate, they are guided by the existing or expected average level of loan interest. In practice, they choose specific benchmarks (profitability of certain types of securities, banking operations etc.) taking into account the activities of the respective enterprises and investors.

For example, in the United States, the largest oil companies three variants of the rate are used in the analysis of efficiency: the average rate of return on shares, the existing rates on the loan (medium and long-term), subjective assessments based on the experience of firms. The discount rate used in a market economy largely depends on the economic situation, prospects economic development countries, the world economy, is the subject of serious research and forecasts.

Other an important factor, affecting the evaluation of the effectiveness of an investment project, is a risk factor. Since the risk in the investment process, regardless of its specific forms, ultimately appears in the form of a possible decrease in the real return on capital compared to the expected one, in order to take into account the risk, an adjustment to the level of the interest rate is often introduced, which characterizes the return on risk-free investments (for example, compared with bank deposits or short-term government securities).

The inclusion of a risk premium in the discount rate is a common, but not the only, means of accounting for risk. Another method for solving this problem is to analyze the sensitivity or stability of the investment project to changes in external factors and parameters of the project itself.

To external factors include: the future level of inflation, changes in demand and prices for products planned for release, possible changes in prices for raw materials and materials, changes in the loan interest rate, tax rates etc. The internal parameters of the project include: changes in the timing and cost of construction, the pace of development of production, the need for various types of raw materials and materials, marketing costs, etc.

Since the implementation of an investment project includes the processes of capital construction, development and increase in production, its functioning in a changing economic environment, is dynamic, then simulation dynamic models implemented using computer technology are used to describe it. The variables used in these models are techno-economic and financial indicators investment project, as well as parameters characterizing the external economic environment (characteristics of product sales markets, inflation, interest rates on loans, etc.). Based on these models, the flow of expenses and income is determined, the performance indicators of the investment project are calculated, the annual balance sheets of the results of production activities are built, and the analysis of the influence of various factors and internal parameters of the investment project on the results of production activities and project efficiency is carried out.

2. Indicators of economic efficiency of the investment project

Most methods for determining the economic efficiency of investment projects in a market economy are based on the calculation of net present value. Net present value (NPV) is the difference between the results at one point in time (usually the year the project was launched) of income and investment.

To assess the effectiveness of production investments, the following indicators are mainly used: net present value, internal rate of return, payback period for capital investments, project profitability and break-even point.

Variable indicators are the results of comparisons of income distributed over time with investment and production costs.

Consider the definition, semantic content and algorithm for calculating the above indicators of the investment project.

Net present value NPV is calculated at a given discount rate (reduction) by the formula

where t - years of implementation of the investment project, including the construction stage (t = 0, 1, 2, 3, ..., T); Pt - net flow of payments (cash) in year t; d - discount rate.

The net flow of payments includes, as income, profit from production activities and depreciation deductions, and as expenses - investments in capital construction, the reproduction of fixed assets that are retired during the production period, as well as the creation and accumulation of working capital.

The impact of investment costs and income from them on NPV can be presented in a more visual form by writing formula (1) as

where tn is the year of production start;

tc - year of completion of capital construction;

KVt - investment costs (capital investments) in year t.

It should be noted that instead of an annual interval, these formulas can also use smaller time intervals - a month, quarter, half a year. The year of production start tn may not coincide with the year of completion of construction.

The case tn > tc means a temporary delay in the production of products after construction is completed, and the case tn< tc означает запуск продукции до завершения строительства.

Internal rate of return (IRR) of an investment project is the estimated rate of interest at which the net present value associated with that project is zero. The economic meaning of this indicator is expressed as follows: as an alternative to investing financial resources in an investment project, the placement of the same funds (also distributed over the time of investment) at a certain bank interest is considered. The time-distributed income is deposited in a bank account at the same percentage.

With a loan interest rate equal to the internal rate of return, investing funds in the project will result in the same total income as placing them in a bank on a deposit account. Thus, at this lending rate, the alternatives to depositing funds are economically equivalent. If the real interest rate is less than the internal rate of return of the project, then investing in it is profitable, and vice versa. Therefore, IRR is the marginal lending rate separating efficient and inefficient projects.

The IRR level is completely determined by internal data characterizing the investment project. No assumptions about the use of net income outside the project are considered. Abroad, the calculation of the internal rate of return is often used as the first step in financial analysis investment project. For further analysis, those investment projects are selected that have an IRR not lower than the threshold value (usually 15 - 20% per annum).

The methodology for determining the internal rate of return depends on the specific features of the distribution of income from investments and the investments themselves. In general, when investment and return on investment is given as a stream of payments, IRR is defined as the solution of the following equation with respect to the unknown value d*:

where d* = IRR is the internal rate of return corresponding to the payment stream Pt.

It can be obtained from formula (1) if its left side is equated to zero. Equation (2) is equivalent to an algebraic equation of degree T and is usually solved by iteration. There are numerous PC programs that solve such equations.

Very often, in practice, more complex cases can occur when equation (2) has several positive roots. This can, for example, happen when, after the initial investment in production, there is a need for a radical modernization or replacement of equipment in an existing production. In this case, one should be guided by the smallest value of the obtained solutions.

Payback period (payback method)- this is one of the most used indicators, especially for a preliminary assessment of the effectiveness of investments. The payback period is defined as the period of time during which the investment will be returned from the income received from the implementation of the investment project. More precisely, the payback period refers to the length of the period during which the amount of net income, discounted at the time of completion of the investment, is equal to the amount of investment.

To determine the payback period, you can use the formula (1 *), modifying it accordingly. We equate the left side of this formula to zero and assume that all investments were made at the time of completion of construction. The known value h of the period from the moment of completion of construction, which satisfies these conditions, will be the payback period of investments.

The equation for determining the payback period can be written as:

where h is the payback period; KV - total investment in the investment project.

It should be noted that in the equation t=0 corresponds to the end of construction. The value of h is determined by successive summation of the members of a series of discounted returns until an amount equal to or greater than the investment is obtained.

Denote, and Sm< KV < Sm + 1.

Then the payback period is approximately equal to:

Obviously, the value of the payback period, in addition to the intensity of income, is significantly affected by the discount rate used for income. Naturally, the shortest payback period corresponds to the absence of income discounting, increasing monotonously as the interest rate increases.

In practice, there may be cases when the payback period of investments does not exist (or is equal to infinity). In the absence of discounting, this situation arises only if the payback period is longer than the period of receipt of income from production activities. When discounting income, the payback period may simply not exist (strive to infinity) under certain relationships between investments, income and the discount rate.

Let us assume that in formula (3) Pt is a constant value equal to P.

Then the sum is the sum of the terms of the geometric progression. For h and this sum is equal to S = 1+d /d.

For any finite h Sh< S . Отсюда следует, что необходимым условием существования конечного срока окупаемости h является выполнение равенства:

P (1+d / d) = KV,

which is equivalent to:

P / KV = d / 1+d. (5)

It should be noted that when determining the payback period, investments were not discounted, but simply summed up. Sometimes it is useful to determine the payback period of investments by bringing them to the end of the construction period, along with income at the same interest rate.

In this case, at a discount rate equal to the internal rate of return, the payback period of the investment is equal to the production period during which the income from production activities is positive. Thus, IRR is the marginal discount rate at which a payback period exists. It can also serve as a guideline for assessing limit value discount rate corresponding to the existence of the payback period and in the absence of investment discounting.

The disadvantage of the payback period as an indicator of the effectiveness of capital investments is that this indicator does not take into account the entire period of production operation and, therefore, it is not affected by income that will be received outside the payback period. In particular, such a measure as the payback period should not be used as a criterion for choosing an investment project, but only as a constraint when making a decision. This means that if the payback period is greater than some accepted boundary value, then the investment project is excluded from the list of considered ones.

Profitability (benefit - cost ratio), or the profitability index of an investment project, is the ratio of the income to the investment costs as of the same date.

Using the same notation as in formula (1*), we obtain the profitability formula (R) in the form:

As can be seen from this formula, it compares two parts of the reduced net income - income and investment. If, at a certain discount rate d*, the profitability of the project is equal to one, this means that the present income is equal to investment costs and the net present value is zero.

Therefore, d* is the internal rate of return of the project. With a discount rate less than IRR, the profitability is greater than 1. Thus, the excess of the project's profitability over a unit means some additional yield at the given interest rate. The case when the profitability of the project is less than one means its inefficiency at a given interest rate.

All considered indicators of the investment project are closely related to each other. This can be explained by the fact that they are all built on the basis of discounting the flow of payments. Therefore, often an investment project, which is preferable in one respect, will also be preferable in terms of other indicators.

At the same time, this is not always the case, since the prerequisites and features for calculating each indicator differ.

As an example, consider the relationship between net present value and profitability. Using formulas (1*) and (6), we can write the expression for profitability in the following form:

, (6*) where is the discounted investment amount.

From this formula, it can be seen that higher profitability values can be obtained with lower NPV values if investments decrease to a greater extent than net present value. Due to differences in the evaluation of an investment project that can be observed when using various indicators efficiency, the question arises about the preference of certain efficiency meters. A 1983 survey of 103 major US oil and gas companies showed that 98% of firms used at least one of the formal performance measures as their primary or secondary measure, and many used more than one. The table shows data on the frequency of application of various investment performance indicators.

As follows from the table, the most commonly used indicator of investment efficiency is the internal rate of return, and the second most frequently used is the net present value. All other investment performance indicators are used much less frequently. It should be noted that both of the above indicators should be used simultaneously, since the internal rate of return can be considered as a qualitative indicator that characterizes the profitability of a unit of invested capital, and net present value is an absolute indicator that reflects the scale of the investment project and the income received. In addition to the formalized criteria for evaluating the effectiveness, when deciding on the appropriateness of financing an investment project, various restrictions and informal criteria are taken into account. The limitations may be the payback period, requirements for environmental protection, personnel safety, etc. Informal criteria may be: penetration into a promising product sales market, ousting competing companies from the market, political motives, etc.

3. Net cash flow

From the foregoing, it follows that the basis for calculating all indicators of the effectiveness of investment projects is the calculation clean flow payments. As already noted, the net flow of payments is defined as the difference between current income and expenses associated with the implementation of the investment project and measured by the number monetary units per unit of time (ruble/day; million rubles/year; USD/year, etc.).

From a financial point of view, the flow of current income and expenses, as well as the net flow of payments, fully characterize the investment project. Therefore, the calculation of this characteristic of the investment project is extremely important. This part presents the basic formulas for calculating the net cash flow.

The net payment flow Pt in time interval t (year) is equal to

Pt \u003d CHPt + At + FIt - KVt - POKt, (7)

where t = 0, 1, 2, ...,T; NPT - net profit; Аt - depreciation charges; FIt - financial costs (interest on credit); KVt - capital investments.

Let us consider the terms Pt in general form: NPt = Дt - IPt - Нt, (8)

where Dt is the total sales volume of the t-th year (net of VAT); IPt - production costs in year t; Нt - non-taxable income tax in the t-th year.

Дt = ДВt + ДЭt , (9)

where DWt - income from sales on domestic market in the t-th year; ДЭt - income from export sales in the t-th year.

All income is determined net of VAT.

DWt= CVjt Q DEt = CEjt Qj gt, (11)

where j = 1, 2, ..., N - product type; CVjt - unit price j-th production in the domestic market in the t-th year in local currency; Qjt- number of j-th products sold in the t-th year in the domestic market; CEjt - price j-th units products on the foreign market in the t-th year in foreign currency; Qjt is the quantity of the j-th product sold in the t-th year on the foreign market; gt - average annual conversion factor foreign exchange to the local.

Ipt \u003d Сt + Mt + KIt + Et + PCt + PMt + ZCHt + ZNRt + ANRt + SBt + At + FIt, (12)

where Ct is the cost of raw materials; Mt - the cost of materials; KIt - the cost of purchasing components; Et - operating costs; PCt - the cost of paying production personnel, including deductions for social needs (social insurance, Pension Fund, medical insurance, employment fund); PMt - the cost of maintenance and repair of equipment (without salary); ЗЧt - the cost of spare parts for the repair of the main and auxiliary equipment; ЗНРt - factory overhead; АНРt - administrative overhead costs; СБt - sales and distribution costs; Аt - depreciation charges; FIt - financial costs (interest on a loan).

Sometimes two more groups of costs are distinguished from production costs for further analysis and calculations - factory costs and operating costs:

ЗИt \u003d Сt + Мt + КИt + РМt + Et + ЗЧt + ЗНРt, (13)

where ЗИt - factory costs.

EZt = ZIt + AHPt + SBt, (14)

where EZt - operating costs.

4. Need for working capital

Along with investments in fixed capital (buildings, machines, etc.), in financial analysis, much attention is paid to determining the need for the created production in working capital and its changes due to changes in the scale of production and other factors. The amount of working capital is affected by the duration of the production cycle, the established practice of paying bills to suppliers and consumers, planned stocks of raw materials, materials, finished products etc.

The main calculation formulas for estimating the amount of working capital required for the implementation of an investment project:

The amount of net working capital in year t

OKt = AKt - POSt, (15)

where t = 0,1,2, ... , T; OKt - the value of net working capital; AKt - current assets; POSt - invoices payable.

In turn, current assets are equal to

AKt \u003d DZt + ZSZt + ZMt + ZKIt + ZEt + ZZCHt + NPt + HPt + KNt, (16)

where DZt - accounts receivable; ЗСt, ЗМt, ЗКИt, ЗЭt, ЗЗЧt - the cost of stocks of raw materials, components, fuel and spare parts; NPt - cost of work in progress; ГПt - the cost of stocks of finished products; КНt - cash on hand.

In calculating the need for working capital, a significant role is played by the minimum number of days of stock. The minimum number of days for the supply of the corresponding element is calculated according to the norms, is set from practice or by expert means. The number of annual turnovers of the corresponding type of reserves is calculated by the formula

Пj = 360 / ДНj, (17)

where Пj is the number of turnovers of the j-th type of reserves; DNj is the minimum number of days for stocks of the jth type.

Volume accounts receivable is determined by the formula

DZt \u003d EZt / Pd.z. (eighteen)

where EZt is the annual volume of operating costs calculated by formula (14); Pd.z. - the number of turnovers of receivables per year.

The cost of stocks of raw materials, materials, fuel and energy is determined by the formula ЗСt = Сt / Пс, (19)

ZMt \u003d Mt / Pm (20)

ЗМt \u003d KIt / Pk.i. (21)

ZEt \u003d Et / Pe, (22)

ZZCht = ZCht / Pz.h., (23)

where Ct, Mt, KIt, Et, ZCHt - the corresponding annual costs; Ps, Pm, Pk.i., Pe, Pz.ch. - the number of turnovers of the respective stocks per year.

The cost of work in progress is

ZNPt \u003d ZIt / Mon, (24)

where ЗИt - the annual amount of factory costs, calculated by the formula (13); Mon - the number of production cycles per year.

Finished goods inventory value

ГПt = (ЗИt + АНРt) / Pp.g., (25)

where AHPt - administrative overhead; Pp.g. - the number of turnovers of finished products per year.

The volume of cash on hand is estimated by the formula

КНt = (РСt + Кз + ЗНРt + Ka + АНРt) / Pk, (26)

where PCt is the cost of paying production personnel (including deductions); Kz and Ka - shares wages in factory and administrative overhead.

Accounts payable (accounts payable) is determined by the formula POSt = EZt / P.s., (27)

where Po.s. - number of revolutions accounts payable in a year.

The above formulas serve for a preliminary assessment of the amount of working capital, which should be clarified as a result of carrying out design work for an investment project.

5. Initial information for determining the economic

investment project efficiency

Calculation of net cash flow and determination of others financial characteristics investment project requires sufficient knowledge a large number initial data about the project.

In accordance with the accepted practice, an investment project is usually studied in dynamics over a period covering the capital construction phase (lasting 3-5 years) and the production phase and up to its curtailment (lasting up to 10-15 years). The initial data should reflect the temporal dynamics of the project implementation. It is not enough, for example, to know the total capital investment or the annual volume of production, but it is necessary to have a plan for capital construction, development of production and changes in its scale over time.

It is also necessary to have an idea of the economic situation directly related to the production and marketing of products.

It is necessary to take into account probabilistic scenarios of general economic development, which are expressed in inflation, interest rate trends bank interest on various types of credit, the hryvnia exchange rate against the dollar and other indicators.

Background information is usually provided under the following sections:

market, sales volume and prices;

data and proposals on inflationary processes, interest rates bank loan, exchange rates;

data and proposals on taxes and fees;

· program of construction and investment project;

production costs.

By whom and how is the effectiveness of the project determined?

Recall the concept of the subject of investment. We understand it as a commercially oriented organization (enterprise) that uses investments to solve its business problems. The investor plays a significant role in investment activity(ID), which, having at its disposal available funds interested in their effective investment. Among investors, in addition to legal entities(enterprises and their associations) other persons (individuals, state and municipal bodies, foreign states, etc.) can also act.

The next important role is the project manager. Under it, we will understand such a subject of the ID, which acts as the initiator, organizer and general executor of the investment task of the project type. For the purposes of the article, we will also assume that an enterprise acting in its own commercial interests acts as a project developer. It develops and implements the project using its own and, if necessary, borrowed funds.

Several more roles can be noted: user of ID objects, customer, resellers. The user role gives the subject the right to define the requirements and scope of the investment. Often the roles of the user and the executor of the investment project (IP) coincide. In this case, he is engaged in securing financing, contracting with contractors, creating a project team and organizing project interaction, and is responsible for the results of the project.

Since the investor is the determining figure in investment activity, in understanding the phenomenon of efficiency and its types in relation to IP, we will be guided by a dual sign. It is determined, on the one hand, by the requirements of the investor, and, on the other hand, by indicators of economic efficiency. The criterion for the economic efficiency of IP can be not so much a synthetic indicator - profit, but rather its different kinds. So, for an investor, net profit is more suitable for evaluating efficiency, and gross profit is more suitable for social efficiency.

reproductive;
stimulating;
function of the financial result of activity.

The criterion of profitability for understanding the economic efficiency of IP is not enough. To this must be added economic interests ID participants. They must be diagnosed before the start of the project. So, for example, the interest of the owner of the enterprise-designer is in profit, cleared of taxes and other payments. Investor interests are broader and include:

compensation of income for demand deferred due to investments;
compensation of funds in connection with their inflationary depreciation;
reimbursement of probable losses due to investment risk.

IP methods and performance indicators

Whatever kind of efficiency we consider in connection with an investment project, one thing must be remembered: they are all conditioned by the principles of economic efficiency. Economic efficiency in any model and in any component of the management system is based on the assessment of profitability: absolute or relative. The most common indicator for these purposes is the rate of income. AT economic theory two approaches are distinguished for solving the computational problem.

Simple, agglomerated methods, also called static methods.
Methods that take into account indicators of a technical and economic nature in their dynamics at each time step, the cost of money, which tends to change due to inflation and investment alternatives. These methods make it possible to take into account project risks and interests of IP participants. They have an alternative name for dynamic methods.

In my practical work, I have repeatedly come across a situation where I literally had to make quick express calculations of the expected benefits based on “small statistics”, expert assessments and my own digital feeling literally on the go. Such calculations I call "blotter" and, oddly enough, they are very useful.

Real activity, as a rule, is richer than theory. Decisions are not always made on the basis of prescribed political and strategic procedures. Events can happen quickly and opportunities are easily missed if they are not assessed in time. Simple methods help with this. Let's consider some examples of static calculations.

Formulas for simple methods for assessing the economic efficiency of IP

When using simple methods, dynamic questions are ignored. It seems that the project will be implemented, say, in a year, i.e. with some static parameters. The duration of the investment object is not taken into account, the structure of income and expenses in the operational phase is also not taken into account. Without pretending to a high quality result, such calculations allow you to focus on promising ideas and proposals and weed out obviously failed ones.

Static methods have significant drawbacks, the main one being low reliability. For this reason, it is not possible to use them to develop a feasibility study for an investment project. However, the shortcomings of simple methods can be eliminated by using dynamic indicators. Together, these indicators constitute a system of interrelated calculations that make it possible to assess the profitability in a comprehensive manner. Let's name the main indicators of the system:

net income;
net present value;
internal rate of return (profitability);
profitability index (yield);
payback period;
financial reliability (stability);
overall solvency ratio;
overall liquidity ratio;
immediate liquidity ratio.

The composition of dynamic indicators of IP economic efficiency

We always need to remember that the calculation and presentation of the effectiveness of the project is made in the interests of the investor as a role setting. On the principles of economic efficiency, it is customary to evaluate several of its types, among which the most ambitious is social efficiency. It reflects the socio-economic significance of IP for society. At the same time, the values of not only the financial results of the investment measure, but also the results and costs “external” in relation to the project are taken for calculation. The effects considered include:

responses in industries related to the project;
social events;
environmental outcomes;
other non-economic effects.

Evaluation of social effectiveness is appropriate only for global, national and large-scale projects where social and economic effects are actually present in national economy and evoke a real public response. Examination by state bodies of local projects, if they are not socially significant, is not provided. In this case, the calculation of the social benefit of the project is not required.

The commercial effectiveness of IP allows you to establish economic consequences for the designer. The condition for such calculations is the independent implementation of the project by the organization initiating it at the expense of its own sources. In this case, the project manager himself bears all the costs of IP and fully receives all its results. Such efficiency is considered in the literature as the efficiency of total (total) investment costs.

The main features of assessing the public and commercial effectiveness of IP

Above is a table comparing the features of assessing the social and commercial effectiveness of IP. In both the first and second cases, the performance evaluation is performed using the same set of dynamic indicators (NPV, IRR, PI, PP). However, approaches to comparing the effects and costs of IP differ. Another type of environmental efficiency can be attributed to this group of assessments. All three types of efficiency indicated above refer to the project as a whole. In addition, the effectiveness of participation in the project is among the significant types.

Evaluation of the effectiveness of participation in the project is carried out to verify the feasibility of IP. Along the way, the interest of the project participants in its implementation is revealed. First of all, the assessment is given to the profitability of the participation of the design organization. This efficiency is also called the efficiency of using the own capital of the project developer. In addition to it, the determination of the profitability of participation in the investment project of organizations with more high level, state participation (budget efficiency) and other types. A complete scheme of possible types of IP efficiency is available below.

Types of investment project efficiency

Evaluation of the commercial effectiveness of IP

Commercial efficiency implies that the point of view of the initiator-designer on the ratio of results and costs during the implementation of the project is evaluated. The assessment is made for conditions where the enterprise uses only own sources financing and becomes the owner of all the results of the investments made. In support of this position, I will cite an extract from methodological recommendations for evaluating the effectiveness of investment projects (second edition developed by V.V. Kossov, V.N. Livshits, A.G. Shakhnazarov).

The calculation is intended to characterize exclusively the economic side investment effects which are provided by the enterprise's own solutions in matters of organization, equipment and technology. Such a somewhat refined estimate involves the inclusion of two types of cash flows in its calculation: from operating and investment activities. The third type of cash flow (financial) is excluded from consideration, and therefore it is important that external sources financing such as credits, loans, subsidies and grants was not provided. This would deprive the very essence of commercial efficiency of meaning.

To calculate commercial profitability, a standard Cash Flow from operating activities is used, the inflow of funds for which is formed from proceeds from the sale of products and services, as well as non-operating income. Outflows are recognized as a result of disposal Money in order to pay the costs of production and marketing of products. Cash flow from investment activities has little specifics. Cash inflows from the sale of assets are included in the calculation net of taxes (VAT). Cash Flow outflows from investing activities include:

investments in fixed assets and other fixed assets associated with IP;
liquidation expenses;
investment investments in securities and bank deposits;
increase in working capital for the purposes of the project;
compensation of current liabilities (at the end of the project).

Consideration of IP throughout its entire life cycle.
Simulation of cash flows.
The principle of ensuring the comparability of the conditions for comparing IP options.
The assumption of a positive and maximum possible level of effect of the selected project option.
The principle of taking into account time factors: dynamism, uneven events, time gap between shipment and payment.
The principle of alternative comparison of efficiency options (“with a project” and “without a project”).
The principle of taking into account all the essential conditions of IP.
The principle of taking into account the interests of different project participants.

An example of evaluating the commercial effectiveness of IP

The evaluation of commercial efficiency is required for the initiator-designer for two purposes: to clarify the profitability of the project's own economy without the influence of external sources of resources and to search for investors on its basis. If the composition of funding sources is fully defined and formed, there is no need to calculate this type of efficiency.

As already noted, the assessment methodology is typical and includes both static and dynamic methods from the economic point of view. In addition, the coefficient method of financial evaluation is used, which allows to finalize the picture of the project viability. The structure of the assessment indicators is shown in the diagram below.

Types of investment project efficiency

I propose to consider an example of calculating commercial efficiency small project duration of 8 billing periods. Below is a table with estimated data for the project. This is the base cash flow plan with the finance side flows excluded from it. Because the borrowed funds as project resources are not considered, the costs of servicing bank loans are excluded from the operating part. This has a positive effect on the balance of cash flows from operating activities.

Calculation table of cash flows for the project for the purposes of commercial efficiency

As a result, we get several dynamic indicators in order to draw conclusions. The net present value (NPV) of the project is positive, hence the project is efficient. The internal rate of return (IRR) is higher than the discount rate (r) taken into account, which also indicates the profitability of the project. The payback period occurs within the seventh calculation step, this can be seen from the sign change of NPV and is confirmed by calculations using the formula (7.22 years). As a result of calculating the PI index, a value of 1.22 was obtained, corresponding to NPV > 0.

We have considered various types of economic efficiency of IP, highlighting among them special kind assessment, which is more of interest to the key participant - the project developer. While the investor certainly plays a significant role in IE, my inner sympathies lie with the enterprise, which arranges a project venture not so much for the sake of income as such, but in the interests of developing the core business activity. The presented somewhat exaggerated approach to efficiency provides an opportunity to get a snapshot of the true economics of the project. Business leaders and potential investors are convinced that the project idea is promising and worth investing in and attracting resources.

Investment projects can be evaluated according to many criteria - in terms of their social significance, the scale of environmental impact, the degree of involvement labor resources etc. However, efficiency is central to these assessments.

Efficiency is generally understood as the correspondence between the results obtained from the project - both economic (in particular, profits) and non-economic (removal of social tension in the region) - and the costs of the project.

The effectiveness of an investment project is a category that reflects the compliance of the project that generates this IP with the goals and interests of the project participants, which are understood as the subjects of investment activity (discussed above) and society as a whole. Therefore, the term "efficiency of the investment project" is understood as the effectiveness of the project. The same applies to performance indicators.

Among the main principles and approaches that have been developed in world practice for assessing the effectiveness of investment projects, adapted for the conditions of transition to a market economy, the following can be distinguished:

modeling of product, resource and cash flows;
taking into account the results of market analysis, financial condition the enterprise claiming to implement the project, the degree of trust in the project managers, the impact of the project on the environment, etc.;
determining the effect by comparing future results and costs with a focus on achieving the required rate of return on capital and other criteria;
bringing the forthcoming multi-temporal expenses and incomes to the conditions of their commensurability in terms of economic value in the initial period;
taking into account the impact of inflation, payment delays and other factors on the value of the funds used;
taking into account the uncertainty and risks associated with the implementation of the project.

It is proposed to evaluate the following types of efficiency:

1) the effectiveness of the project as a whole;

2) the effectiveness of participation in the project.

The effectiveness of the project as a whole. It is evaluated in order to determine the potential attractiveness of the project, the expediency of its adoption for possible participants. It shows the objective acceptability of the IP, regardless of the financial capabilities of its participants. This efficiency, in turn, includes:

Public (socio-economic) efficiency of the project;

The commercial viability of the project.

Social efficiency takes into account the socio-economic consequences of the implementation of an investment project for society as a whole, including both the direct costs of the project and the results from the project, and "external effects" - social, environmental and other effects.

The commercial efficiency of the investment project shows the financial consequences of its implementation for the IP participant, assuming that he independently produces all necessary costs to the project and enjoy all its results. In other words, when evaluating commercial efficiency, one should abstract from the ability of project participants to finance the costs of IP, conventionally assuming that the necessary funds are available.

The effectiveness of participation in the project. It is determined in order to verify the financial feasibility of the project and the interest in it of all its participants. This efficiency includes:

The effectiveness of the participation of enterprises in the project (its effectiveness for enterprises - participants in the investment project);

Efficiency of investing in the company's shares (efficiency for JSC shareholders - participants in the investment project);

Efficiency of participation in the project of structures of a higher level in relation to the enterprises participating in the IP (national economic, regional, sectoral and other efficiency);

The budgetary efficiency of the IP (the effectiveness of the state's participation in the project in terms of expenditures and revenues of budgets of all levels).

General scheme for evaluating the effectiveness of an investment project. First of all, the social significance of the project is determined, and then, in two stages, the effectiveness of the IP is assessed. At the first stage, the performance indicators of the project as a whole are calculated. Wherein:

if the project is not socially significant (local project), then only its commercial effectiveness is evaluated;
for socially significant projects, their social effectiveness is first assessed (methods for such an assessment are outlined in the Methodological Recommendations).

If such efficiency is unsatisfactory, then the project is not recommended for implementation and cannot qualify for state support. If the social efficiency is acceptable, then the commercial efficiency is evaluated. With insufficient commercial efficiency of a socially significant IP, it is necessary to consider various options for its support, which would increase the commercial effectiveness of the IP to an acceptable level. If the conditions and sources of financing of socially significant projects are already known, then their commercial effectiveness can not be assessed.

The second stage of the assessment is carried out after the development of the financing scheme. At this stage, the composition of the participants is specified and the financial feasibility and effectiveness of participation in the project of each of them are determined. It is possible to formulate the main tasks that have to be solved when evaluating the effectiveness of investment projects:

1. Evaluation of the feasibility of the project - checking whether it is really satisfied with everything existing restrictions technical, environmental, financial and other nature. Usually, all constraints, except financial feasibility, are checked at the early stages of project formation. Financial feasibility investment project is to ensure such a structure of cash flows, in which at each calculation step there is a sufficient amount of money to implement the project that generates this IP. Accordingly, the cash flows of the investment project are understood as the cash flows of the project associated with this IP.

2. Evaluation of the potential feasibility of the project, its absolute effectiveness, that is, checking the condition according to which the cumulative results of the project are no less valuable than the required costs of all types.

3. Evaluation of the comparative effectiveness of the project, which is understood as an assessment of the advantages of the project under consideration in comparison with the alternative.

4. Evaluation of the most effective set of projects from their entire set. Essentially, this is the task of optimizing an investment project, and it generalizes the previous three tasks. As part of solving this problem, it is also possible to rank projects, that is, the choice of the optimal project.

The main methods for evaluating the effectiveness of investment projects

There are two groups of methods for evaluating investment projects:

1. simple or static methods;

2. methods of discounting.

Simple or static methods are based on the assumption of equal importance of income and expenses in investment activity, do not take into account the time value of money.

The simple ones include: a) calculation of the payback period; b) calculation of the rate of return.

The rate of return shows how much of the investment costs are recovered in the form of profit. It is calculated as the ratio of net profit to investment costs:

Rate of return = Net profit/ Investment costs.

Discounted methods for evaluating the effectiveness of an investment project are characterized by the fact that they take into account the time value of money.

At economic evaluation the effectiveness of the investment project, the indicators widely known in world practice are used:

Present Value (PV);

Net Present Value (NPV);

Payback period (PBP);

Internal rate of return (IRR);

Index of profitability (profitability) (PI).

Present Value (PV). The task of any investor is to find such a real tool that would ultimately bring income that exceeds the cost of acquiring it. This raises a difficult problem: the money to purchase real money it is necessary to spend today (at the moment t = 0), while the return on investment usually does not give immediately, but after a certain period of time (at the moment t = 1). Therefore, to solve the problem, it is necessary to determine the value of a real asset, taking into account the remoteness in time of future receipts (revenues) from its use.

In general, to find the present value PV of any asset (real or financial) used during a certain holding (investment) period, it is necessary to multiply the expected income stream from this asset (C) by 1/(1 + r):

PV = C * (1/(1+r)) ,

where r determines the yield of the best alternative financial means with the same holding period and the same level of risk.

The value 1/(1+r) is called the discount factor (discount factor). The yield of an alternative financial resource r is called the discount rate (rate). The discount rate determines the opportunity cost of capital, because it characterizes how much profit the firm has missed by investing money in real assets, and not in the best alternative financial means.

To determine the feasibility of acquiring a real asset worth C0 rubles, you must:

a) estimate what cash flow C1 for the entire holding period he expects from a real asset;

b) find out which security with the same holding period has the same level of risk as the planned project;

c) determine the current yield r of this security;

d) calculate the present value PV of the planned cash flow C1 by discounting the future income flow:

PV = C1 / (1+r) ;

e) compare the investment costs C0 with the present value PV:

if PV > C0, then the real asset can be bought;

if PV = C0, then a real asset can be bought or not bought (that is, from an economic point of view, investing in a real asset has no advantage compared to investing money in securities or other objects).

If the investment project is designed for several steps (in particular, n years), then in order to find the present value of future income from the project, it is necessary to discount all the amounts Сt that the project should provide:

PV = Σ Ct / (1+r)^t .

For example, for a three-year investment project, the present value is estimated as follows:

PV = Ct / (1+r) + Ct / (1+r)^2 + Ct / (1+r)^3 .

Some funds can provide a continuous stream of income for an unlimited time. The present value of such funds at a given and constant discount rate r is:

PV = Ct / (1+r) + Ct / (1+r)^2 + Ct / (1+r)^3 + ... = C / r .

The present value of an annuity that gives an income stream C over n periods (years) at a constant discount rate r is calculated by the formula:

PVannuity \u003d C * Fannuity,

where F annuity is the annuity factor, which is defined as follows:

F annuity = 1/r - 1/(1+r)^n .

Net Present Value (NPV)

The feasibility of acquiring a real asset can be assessed using net present value (NPV), which is understood as a net increase in the company's potential assets due to the implementation of the project. In other words, NPV is defined as the difference between the present value PV of the funds and the amount of the initial investment C0:

NPV = Σ Ct / (1+r)^n - C0 .

Payback period (RVR)

The payback period of a project is the period during which the initial investment costs are recovered, or the number of periods (calculation steps, for example, years) during which the accumulated amount of estimated future income flows will be equal to the amount of the initial investment. As a rule, the company itself sets an acceptable deadline for the completion of the investment project, for example, k steps. This period is determined by the company on the basis of its own strategic and tactical settings: for example, the company's management rejects any projects lasting more than 5 years, since in 5 years the company is planned to re-profile for the production of other products.

When the deadline k for the completion of alternative projects is determined, then the payback period of the project being evaluated can be found by calculating how many calculation steps m the sum of cash flows C1 + C2 + ... + Cm will be equal to or begin to exceed the value of the initial investment C0. In other words, to determine the payback period of the project, it is necessary to consistently compare the accumulated amounts of income with the initial investment. According to the payback period rule, the project can be accepted if the following condition is met: m

Internal rate of return (IRR)

The internal rate of return is the estimated discount rate at which the project's net present value is zero.

It is found by solving the following equation:

NPV = C0 + C1/(1+IRR) + C2/(1+IRR)^2 + C3/(1+IRR)^3 + ... + Cn/(1+IRR)^n = 0 .

Such an equation is solved by iteration. To calculate the IRR, you can use specially programmed calculators or computer programs. Internal rate of return rule: it is necessary to accept those projects for which the discount rate (that is, the cost of lost capital opportunity) is less than the internal rate of return of the project (r

The profitability index (PI) is understood as a value equal to the ratio of the present value of the expected cash flows from the implementation of the project to the initial cost of investment:

The profitability index shows how much the investor receives for the invested ruble. The profitability index rule is as follows: it is necessary to accept only those projects for which the value of the profitability index exceeds one. When evaluating two or more projects that have a positive profitability index, one should opt for the one that has a higher profitability index.

The effectiveness of the IP is assessed during the billing period - the investment horizon from the start of the project to its liquidation. The start of a project is usually associated with the start date of investment in design and survey work. The calculation period is divided into calculation steps, which are periods of time within which data is aggregated to estimate cash flows and cash flows are discounted.

It is customary to number the calculation steps (step 0, step 1, step 2, etc.). The duration of calculation steps is measured in years or fractions of a year, their sequence is counted from a fixed moment t0 = 0, taken as the base one. For reasons of convenience, the start or end time of the zero step is usually taken as the base time. If several projects are compared, it is recommended to choose the same base moment for them. When the base moment coincides with the beginning of the zero step, the moment of the beginning of step number m is denoted by tm, if the base moment coincides with the end of step 0, then tm denotes the end of step m of the calculation. The duration of different steps may be different.

Source - Maksimova V.F. Investment management: Educational and practical guide. – M.: Ed. EAOI center. 2007. - M., 2007. - 214 p.

Assessment of the commercial efficiency of the investment project is evaluated to determine the potential attractiveness of the project for possible participants and search for sources of funding.

The assessment of the commercial effectiveness of the project as a whole is made on the basis of performance indicators. which were discussed in topic 3 of this manual.

Indicators are determined both by the technical, technological and organizational solutions of the project, as well as by the scheme of its financing.

- net income (NP);
- net present value (NPV) or integral effect (another name of the indicator, quite widely used abroad, is the net present (or current) value, net present value (NPV));
- profitability index (or profitability index, profitability (PI));
- discounted investment return index (NPI)
- payback period (term of return of non-recurring costs of RS);
- internal rate of return (or internal rate of return, profitability, internal rate of retum (IRR))
- PV (modern IP value)
- FV (future value of IP).

A detailed presentation of the calculations is given in the materials of topic 3.

A number of subjects take part in the implementation and implementation of the investment project: shareholders (firms, companies), banks, budgets of different levels. Income at the disposal of the company (gross domestic product) from the sale of effective projects then divided between them.

The presence of several participants in the investment process predetermines the mismatch of their interests, different attitudes towards priority various options project. The income and expenses of these entities determine various types of investment project efficiency from the standpoint of each participant. At the same time, it should be borne in mind that the positions of the project participants are embodied in the initial information and the formation of specific cash flows for calculating performance indicators. Therefore, they may not have the same assessment results, and hence the decisions about their participation in the project.

Overall project efficiency is evaluated for the presentation of the project and in connection with this, to determine the attractiveness of the project for potential investors.

Public efficiency characterizes the socio-economic consequences of the project for society as a whole, i.e. it takes into account not only the immediate results and costs of the project, but also "external" in relation to the project costs and results in related sectors of the economy, economic, social and other non-economic effects.

Social efficiency is assessed only for socially significant investment projects that affect the interests of not one country, but several.

For projects where expertise is not required government agencies management, the development of social performance indicators is not required.

Commercial efficiency The cost of the project characterizes the economic consequences of its implementation for the initiator, based on a very conditional assumption that he incurs all the costs necessary for the implementation of the project and uses all its results. Commercial efficiency is sometimes interpreted as the effectiveness of the project as a whole. It is believed that commercial efficiency characterizes technical, technological and organizational design solutions from an economic point of view.

The most significant is the definition effectiveness of participation in the project. It is determined in order to check the feasibility of the investment project and the interest in it of all its participants.

The effectiveness of participation is evaluated primarily for the enterprise of the project developer (or potential shareholders). This type of efficiency is also called efficiency for the equity capital of the project.

The effectiveness of participation in the project includes such types as effectiveness of participation in the project of higher-level structures(financial and industrial groups, holding structures), budget efficiency investment project (effectiveness of state participation in the project in terms of expenditures and revenues of budgets of all levels).

The system of indicators determined to evaluate the listed types of efficiency, and the methodological principles for their calculation are the same. The differences lie in the initial parameters that form the real cash flows for the project in relation to each type of efficiency. In other words, a single and interconnected system of project parameters is embodied in performance indicators that are uniform in economic nature, depending on their area of application in the economic environment that they should characterize. Some exceptions are indicators of social efficiency. "External" effects are not always possible to take into account in terms of value. AT individual cases when these effects are very significant, but it is not possible to evaluate them, only a qualitative assessment of their influence is inevitable.

Feasibility study (FS) and prices

Assessment of future costs and results in determining the effectiveness of an investment project is carried out within the calculation period (calculation horizon).

The calculation horizon is measured by the number of calculation steps.

The calculation step in determining performance indicators within the calculation period can be a month, quarter or year.

The costs incurred by the participants are divided into initial, current and liquidation, which are carried out respectively at the stages construction, functioning and liquidation.

For the valuation of results and costs, basic, world and settlement prices can be used.

Under the basic prices are understood the prices prevailing in national economy at a certain point in time t b. The base price for any product or resource is considered unchanged throughout the entire billing period.

Measurement of the economic efficiency of the project in basic prices is carried out at the stage of feasibility studies of investment opportunities.

At the stage of a feasibility study (feasibility study) of an investment project, it is mandatory to calculate the economic efficiency in forecast and settlement prices. At the same time, it is recommended to carry out calculations in basic and world prices.

Forecast price Цt product or resource at the end t-th calculation step is determined by the formula:

Цt \u003d Central bank * J (t, tn),

where CB - basic price of a product or resource;

J(t,tn) - coefficient (index) of changes in prices of products or resources of the corresponding group at the end t-th step with respect to the initial moment of calculation t n (in which prices are known or basic prices are accepted).

According to projects developed by order of bodies government controlled, the values of the price change indices for certain types products and resources should be set in the design assignment in accordance with the forecasts of the Ministry of Economy of the Russian Federation.

Estimated prices are used to calculate integral performance indicators if the current values of costs and results are expressed in forecast prices. This is necessary to ensure comparability of the results obtained at different levels of inflation.

Settlement prices are obtained by introducing a defiling factor corresponding to the general inflation index

When developing and comparatively evaluating several options for an investment project, it is necessary to take into account the impact of changes in sales volumes on market price products and prices of consumed resources.

When evaluating the effectiveness of an investment project, the comparison of multi-temporal indicators is carried out by bringing (discounting) them to the value in the initial period. To bring the costs, results and effects at different times, the discount rate is used ( E) equal to the rate of return on capital acceptable to the investor (for a detailed presentation, see the materials of topic 3).

Non-economic efficiency of investment strategy implementation.

In the process of assessing the non-economic efficiency of the implementation of the investment strategy, the growth of the business reputation of the enterprise, the growth of fame and popularity are taken into account. trademark and brand of the enterprise, increasing the level of manageability of its investment activities structural divisions(during the creation of "investment centers"), increasing the level of material and social satisfaction of investment managers (due to an effective system of their material incentives for the results of investment activities, a higher level of technical equipment of their workplaces, etc.).

In this section, the social side of the assessment issue can also be assessed. Here a significant role will be played by the growth of professional skills, the acquisition of skills in working with major projects, automated programs, communication with foreign partners and many other non-economic aspects of investment activity, including in the culture of entrepreneurship and communication with government agencies, financial authorities.

With positive results of the assessment of the developed investment strategy, corresponding to the selected criteria and the mentality of investment behavior, it is accepted by the enterprise for implementation.

Thus, the development of an investment strategy allows you to take effective management decisions associated with the development of the company, in the face of changing external and internal factors that determine this development.