Successful business development often requires the skills of an entrepreneur to attract investment.To do this he can, utilizing a variety of tools.But in many cases the investor's decision over whether to invest or not in a particular business will be based on an independent analysis, assessment of prospects for a specific project.What criteria can be involved?
simplicity and complexity
Estimation of investment projects, as many experts believe, on the one hand, connected with multifactor analysis of business ideas.At the same time, may be taken into account not only the properties of the concept, but also external factors - market conditions, political processes and so on. D. The attractiveness of the investment project can be analyzed from the perspective of the individual entrepreneur, the level of preparedness of the financial plan.On the other hand, the essence of the relevant studies are usually limited to answering a set of simple questions: whether the project is profitable, how and when to expect revenues?
universal criteria that would allow clearly define what factors analysis is most clearly affect the future profitability of the business initiative, even among professional investors are not yet invented.However, the tools with which can be made a qualitative assessment and analysis of investment projects in a wide range of specific solutions, it is available.What are the criteria by which investors assess the prospects of modern business ideas?
Key criteria
First of all, the indicators reflecting the economic efficiency of investments.The "formula", applicable in assessing the specific figures on this criterion, there are two basic "variables" - the actual investments and the annual profit (sometimes expressed in profitability, ie, a percentage).In some cases, the criteria for evaluation of investment projects in this "formula" are supplemented by aspects such as the payback period.That is, if you talk, for example, on the first year of business, the investor may want to know how many months, the project will be released in at least a "zero".In general we can say that the method of evaluation of investment projects linked to the time factor.We analyze a set of the most important from an economic point of view, the criteria relative to that particular period.
If we consider the criteria for the evaluation of investment projects, which are in relation to time, in more detail, you can select them the following list:
- net present value;
- and modified internal rate of return;
- average rate and profitability index.
What are the advantages of these criteria?In almost all cases, the investor receives a streamlined digital indicator that can allow sranivat several potential projects.
optimal business model
Calculate "variables" in respect of the "formula" that we have given above, or similar to, the investor will try analyzing, first of all, the proposed owner of the business model.That is to study it for the presence of solutions that are able to provide the necessary flow of revenues in the period of time that suits investors and other interested parties.Principles for evaluation of investment projects, based on the features of the business model, based on the use of special methods for calculating key performance indicators.Consider them.
Calculation of
In practice, the calculation of indicators are usually carried out using methods of discounting.That is, the size of the average is taken of capital or, if more appropriate in terms of the business model, the average market yield on similar projects.There are discounted based on the bank rate.That is, the comparison of the profitability of the project is carried out as an option with the yield when placing the same amount of money in a bank deposit.Typically, these indicators to assess the effectiveness of investment projects also take into account inflation or adjacent to its processes, reflecting the depreciation of the critical asset for the investor.
We now turn from theory to practice.Consider how the evaluation of investment projects carried out on the example of some of the criteria indicated above us.Let's start with the payback period.This is one of the key indicators, which conducted an estimation of investment projects.If, for example, two other criteria compared business initiatives are the same, preference is usually given to where the attachment will come "zero".
analysis of the payback period
This criterion - it is the time interval between the moment of launching a business project (tranche of investments or financial investor) and fixing events, when the total cumulative net profit will be equal to the total volume of investments.Some experts added another condition - the trend in yield business, "zero", it must be sustainable.That is, if some of the months after the start of business retained earnings become equal investment, and after a while again the costs exceeded revenue, the payback period is not fixed.However, there are analysts, not taking into consideration the criterion or considering it as part of complex formulas with a lot of conditions.
In some cases, investors tend to take a positive decision on the basis of the analysis of the payback period?Experts identify two main cases.Firstly, if in correlation with the period of the earnings equal to or comparable with a minimum discount rate on an annualized basis, will be available in less than 12 months.That is, relatively speaking, if within 10 months of the project the investor will receive a margin of 15%, equal to 15% per annum in the bank, he will prefer to invest in a project, you open the deposit to the remaining 2 months into the release of capital invest more kudaa.Secondly, the decision to invest in the business, can be accepted, if the investor finds acceptable payback period, provided that the risk assessment of the investment project did not identify the factors that may affect the decrease in profitability.These cases mainly characteristic of economies with low inflation and low volatility of the exchange rate (and, therefore, with a small percentage of bank deposits) - then investors are more willing to consider investing in a real business, pay more attention not only profitability, but also risks.
However, the assessment of investment projects on the basis only of the payback period is insufficient.Mainly because in this case it is not taken into account the profit that can be obtained after revenues exceed costs.Relatively speaking, it may happen that the investor will receive 15% and withdrawing capital, miss the opportunity over the next year to earn an additional 30%.
Net present value
As we said above, the performance evaluation of investment projects include such criteria as the net present value.It represents the difference between the value of the expected revenue and the size of the original investment in the business.That is, it reflects the extent to which may increase the total capital of the company.The investor will prefer to project that the net present value at the same level of risk, and at the same time interval is expected above.At the same payback period may not be taken into consideration at all (although it is not often).
IRR
above performance evaluation of investment projects are often supplemented by criteria such as internal rate of return.The main advantage of this tool is that the investor's profit can be calculated without taking into account the discount rate.How is it possible?The fact that the internal shape of the yield is supposed to match that of the discount rate, but the magnitude of the expected revenue to match the size of your investment.Relatively speaking, investor, invest in the project 100 thousand. Rubles can be sure that at least the same amount he will receive after a specified period of time, as well as "premium", arranging it on the basis of the discount rate.
modified rate
Evaluation of investment attractiveness of the project can also be supplemented by criteria such as the modified internal rate of return.It can be used if, for example, the net present value is negative (less than the discount rate), while other indicators are positive.For example, the usual internal rate of return.That is, relatively speaking, an investor having invested 100 thousand. Rubles a specific period of time, returns them to a premium of 15% after 10 months of business, but after 24 months the overall profitability of the enterprise is 1-2%.In this case, there is a need to adjust the internal rate of return, based on the periods when revenues are insufficient to meet the criterion on the discount rate, up to a net loss of fixation.The investor is thus important to know: perhaps it is better to invest 100 thousand. Rubles on conditions of return, with interest over 10 months and 15 thousand bail. Than direct finance in circulation for 24 months and to gain only 1-2 thous. Rubles.
Profitability index
Economic evaluation of investment projects, as a rule, intended to include in the analysis of such a criterion, the index of profitability.This option allows you to determine how much will get, on average, all investors (or only if the entire capital of the company it) arrived after a specified period of time, based on the initial volume of funds directed.
Qualitative criteria
We have considered rational, quantitative criteria, which can be produced financial evaluation of the investment project.There are however also qualitative parameters.They are quite difficult to quantify (though in some respects, of course, possible).But they are often less important than the "formula" that take into account the parameters studied above.On what criteria can we talk?Experts identify the next set of them.
Firstly, studied business project must be balanced to take into account the objective conditions of the market, meet the stated objectives.Secondly, the intentions and expectations of the entrepreneur should be adequate resources available - personnel, fixed assets financing sources.Third, to be held in the proper degree of qualitative risk assessment of the investment project.Fourth, the company must calculate the possible impact of the implementation of business initsativy on non-economic areas - society, politics at the level of the region or the municipality, environment, analyze the impact of branding.
Factors profitability
In fact, where are the numbers are substituted in the "formula" for determining rational criteria, on the basis of which can be assessed the investment attractiveness of the project?Sources of data can be a lot.Let's try to determine what may be their nature.Experts identify two main groups of factors that influence the "variables" to "formula" for the sound performance - those that affect the amount of profit, and those that affect the costs.However, this classification is a variable in the part of that one and the same factor can both contribute to the growth of income of one company and at the same time complicate the business to another.A simple example - the ruble.Its growth is very favorable for exporters - their revenues in the Russian national currency is growing.In turn, the importers have to pay much.In addition to currency trading, what other factors can give an example?
This may be an increase or decrease in the capacity of a particular segment of the market, and as a result, sales will increase or decrease.As a rule, this is due to the emergence of new players in the industry, mergers, bankruptcies, and so on. E., In some cases - state policy.Another factor - the rising costs of the company as a result of inflation, changes in market stability suppliers and contractors.Also in the example is the impact of technological processes - the introduction of various tools in the production of sales or may significantly affect the overall revenue growth in the business.Generally, newer equipment involves reducing the process cycle.As a result - the goods reach the market faster.Estimating the cost of the investment project with better industrial base may be higher than that which involves the use, albeit reliable, but more conservative in terms of the dynamics of the release of goods equipment.
Additional criteria
There are also performance evaluation of investment projects, which are not so much economic nature, many are based, to a greater extent on accounting principles.That is being studied how effectively the company is adjusted to account as regularly evaluates and re-analysis of the value of fixed assets, the extent to which effective workflow is adjusted internally and with partner organizations, state structures.
also possible economic evaluation of investment projects at the macro level.That is, the analysis is a combination of factors, which may affect the prospects of the business, based on the conditions of the national or global market.In some cases, taken into account peculiarities of the legislation.That is if, for example, at the level of the sources of law at the federal level are possible partial adjustment in terms of customs legislation (for example, a ban on the import of some products from abroad), the investor may find it inappropriate investments in such a business, despite thethe fact that the estimated margins and profitability are very promising.
can be carried out not only financial evaluation of investment projects, but also, for example, the analysis of the individual business owner at the level of psychology, its connections, recommendations of other market players.The variant, when an investor decides on the basis of a personal relationship to the person who is considered as a candidate for business partners.
It is also possible, when the prospects of investments will be assessed on the basis of recommendations of other market participants, industry rankings, periodic presence of the brand and company executives in the media.If it's a serious investment - the investor usually involves an integrated approach in the assessment of the investment project.
