Investment analysis - research tool investment property that defines a property matching the specific needs of each investor.
Investment analysis includes analysis of indicators that characterize the possible effects of capital investments, as well as the factors that influence the effectiveness of these investments.Also in the analysis carried out risk assessment forms, conditions and methods of financing.
analysis of investment activity is carried out in several stages:
- of the list of investments.At this stage, all options are considered investment activities, taking into account consideration when investing possible replacement by a new and more modern equipment.
- subsequent analysis is carried out to generate cash flow projections for the future.This investment analysis should take into account only those cash flows as a result of investments which are expected positive changes in earnings after tax from the depositor.We do not consider all revenues and costs, which remain unchanged, both before and after the project.All investments in the expansion of the company can be made from such sources: own available funds, leasing and loan.If the forecast cash flows used external regulators such as taxes (eg VAT, income tax), the inflation rate and the rate of the CBR.
- forecast data for the calculation of the rates of the barrier is not needed at all if the company has been working in the country with a stable economic situation, expressed a low level of inflation and the stability of the legislation.Otherwise, the calculation of the forecast shall be based on indicators such as the average weighted cost of capital, inflation and all kinds of financial risks.
- forecast Reinvestment activities carried out by the method of extrapolating trends.
- In calculating net cash flow for each subsequent period, in the case of investing its own funds or loan, you need to make the calculation of depreciation.
- The analysis of investment activity is advisable to use a high degree of reliability of the indicators (hurdle rate and the degree of reinvestment).Only in this case, quite accurately describes the profitability and efficiency of the project indicators such as MIRR.Otherwise - IRR.If you have values only hurdle rate - existing indicators DPI.
- Evaluation of quality indicators of investments provides a sensitivity analysis to changes in certain criteria such influential factors as the level of interest rates, the inflation rate, project life cycle, the frequency of income.This calculation will identify significant risks to the appropriate investment decisions.
- analysis of the solvency and liquidity provides a fairly reliable forecast in the sphere of activity of a business entity.
- Investment analysis of individual factors is used mainly to determine the impact of investments on the main indicators of economic activity of the subject and is considered in the context of such indicators:
- getting more output per ruble of investment;
- the possibility of reducing the cost of finished products on the ruble investments;
- the payback period of the investment project on cost and profit.
analysis of the financial performance in the implementation of investment projects will identify critical positions in the course of business, will help determine the causes of the problems and take some good decisions.
