They are related to the performance indicators of investment projects. Efficiency of investments: methods and stages of assessment

Keywords: indicators, assessments, efficiency, investment, project

Efficiency markinvestment projects are carried out by calculating a number of indicators:

Net present value (NPV) , i.e. E int is defined as the sum of current effects for the entire calculation period, reduced to the initial step, or as the excess of integral results over integral costs and is calculated using the formula:

Where Rt- results achieved by t-th step calculation;

Z t - costs incurred at the t-th step;

T - time period of calculation;

E - discount rate.

The time period for the calculation is taken based on the timing of the project, including the time of creation of the enterprise (production), its operation and liquidation.

If NPV value investment project positive then it is considered effective, i.e. ensuring a level of investment not less than the accepted discount rate.

The reduction of costs and their results is carried out by multiplying them by discount factor (A t), determined for a constant discount rate E using the formula:

where t – the time from the moment of obtaining the result (incurring costs) to the moment of comparison, measured in years.

Discount rateE is the return on capital coefficient (the ratio of the amount of income to capital investments), at which other investors agree to invest their funds in the creation of projects of a similar profile.

If the discount rate changes over time, then the formula looks like this:

where E k - discount rate in the kth year;

t - time period taken into account, year.

When determining indicators of the economic efficiency of investment projects, basic, world, forecast estimated prices for products and consumed resources can be used.

Basic prices- these are the prices prevailing at a certain point in time. They are used, as a rule, at the stage of feasibility studies of investment opportunities.

Forecast prices- prices at the end of the t-th year of implementation of the investment project in accordance with the predicted index of changes in prices for products, resources, services. They are determined by the formula

Ct= C b· I t

where T - predicted price at the end t - year implementation of the investment project;

C b - the base price of a product or resource;

I t - forecast coefficient (index) of changes in prices of the corresponding products or corresponding resources at the end t th year of implementation of the investment project in relation to the moment of adoption of the base price.

Profitability index (ID) of investment is the ratio of the amounts of the reduced effect to the amount of investment K:

If the profitability index is equal to or greater than one (ID³ 1), then the investment project is effective, and if it is less, it is ineffective.

The internal rate of return (IRR) of investments represents the discount rate E inn at which the value of the reduced effect is equal to the reduced investment, i.e. E in (VND) is determined from the equality:

The rate of return calculated using this formula is compared with the return on capital required by the investor. If the IRR is equal to or greater than the required rate of return, then the project is considered effective.

Payback.This indicator is important from the standpoint of knowing the time to return the initial investment, i.e. Will the investment pay off over its life cycle? Payback is calculated using the following formula:

where K ok, - payback, months (years);

C - net investment, rub.;

D сг - average annual cash inflow from the project, rub.

However, from an economic point of view, simply returning the invested funds is unacceptable, since the investor must earn a profit on the invested funds. It follows from this that he must make a profit throughout the entire life cycle of the investment (equipment, development of a new project, etc.) after the payback period.

Let's look at this example input of one of the elements (equipment) of an automated candy production line. The cost of this installation is 100 thousand dollars. It is also the initial investment amount.

The life cycle of the introduced equipment is six years, the return on investment is 20%. In this case, the return on investment in the amount of $100 thousand at a rate of 20% and an average annual cash inflow of $25 thousand looks as follows (Table 1).

Table 1

Return on investment in the amount of 100 thousand dollars at a rate of 20%

Years	Investments, initial amount	Profit 20%	Cash flow from the project	Final amount
1st	100000	20000	25000	85000
2nd	85000	17000	25000	68000
3rd	68000	11 600	25000	54600
4th	54600	10920	25000	40520
5th	40520	8 104	25000	23624
6th	23624	4725	25000	3349

From the table 1 it follows that the payback period is 4 years. If the project ends here, the opportunity cost will reach $40,520.

At the same time, the payback indicator is not a criterion for the profitability of the project, since it does not reflect the life cycle of the investment. Therefore, in practice, investments are considered in terms of return on the initial investment and are calculated using the formula:

where R and - return on investment, %;

M n - profit after taxes, rub.;

K - investment (initial).

When assessing investment returns, it is important to pay attention to changes in the value of money over time, as discussed above. To convert cash flows into equivalent cash amounts, regardless of the time of their occurrence, use accrual at the compound discount rate.

In practice, an investor from two investment proposals prefers one that gives income earlier, since it allows him to reinvest the income and earn profit.

Otherwise (meaning waiting for a later date for receiving income), he incurs losses.

The same thing happens when an investor has the opportunity to choose between an immediate investment or a later one. For the same reasons, he will choose the second option in order to make a profit during the grace period. It follows that value of money affects the schedule for receiving or investing them. Let's show it on simple example: to earn 8%, we calculate the current discounted value of 1000 rubles, which will be received in a year:

where CD is the current discounted value, rub.;

r - interest rate.

As you can see, with an income of 8%, 1000 rubles received in a year. equivalent to today's 925.9 rubles, i.e. invested today 925.9 rubles. in a year they will give you 1000 rubles. This means that it is profitable for the investor to pay 925.9 rubles today. for a contract that will bring him 1000 rubles in a year.

The longer the waiting period, the lower the present discounted value of money to be received in the future. , because each additional waiting period increases the opportunity to earn a profit during that period.

The main problem arising in connection with the need to make investments is the choice (in the absence of financial resources) of those investments that are expected to give the desired level of profitability with an acceptable degree of risk.

The cost of capital is usually determined by its source (equity, commercial credit, long-term liabilities), as well as their supply and demand in the market. Knowing the cost of capital from various sources, we can determine weighted average cost enterprise capital ( weiqhted cost of capital ) and decide how to use it by comparing the enterprise's cost of capital with different rates of return.

Minimum rate of return - this is a level sufficient to compensate for the risk of project implementation and the impact of costs due to lost opportunities.

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Investing is a great way to earn passive extra income. At the same time, there are many investment opportunities - each project in which you invest has its own strengths and weaknesses, pros and cons. This article will describe how you can evaluate the effectiveness of investments.

How to evaluate the effectiveness of investments

It is important to understand that if you have made a decision, this is a very important and responsible step, regardless of the area in which your organization exists and operates. In order for your investments to be truly effective, it is necessary to conduct a comprehensive analysis of both the expected income and the necessary costs for the implementation of a particular investment project.

As part of assessing the effectiveness of investment investments, the main task of the manager is to choose a project (including the way of its implementation) that will bring as much as possible more profit. In other words, an investment project will be effective if it has the maximum present value compared to the price of the required investment.

Today, there are different methods for assessing the effectiveness of capital investments and investment projects. Moreover, each method is based on the same principle: thanks to investments, the organization must make a profit (that is, increase its own capital).

To assess the effectiveness of investments, various financial indicators are used, which characterize the investment project from a variety of angles. This data meets the interests of different groups of people who are related to a particular organization (creditors, investors, managers, and so on).

Elements of investment performance assessment include :

Analysis of the enterprise's capabilities from a financial point of view;

Forecast of possible future cash flow;

Selecting a discounted rate;

Calculation of investment efficiency using various indicators;

Mandatory consideration of all risk factors.

When assessing the effectiveness of any investment project, the following information is used:

Payback period – PP (Payback Period);

Net present value – NPV (Net Present Value);

Internal rate of return – IRR (Internal Rate of Return);

Modified internal rate of return - MIRR (Modified Internal Rate of Return);

Return on investment – ​​P (Profitability);

Profitability Index – PI (Profitability Index).

Each of the above indicators acts as criteria that you should rely on when choosing a project for investment.

The calculation of these coefficients is based on discount methods based on the principles of time monetary value. As a rule, the discount rate becomes the value of the weighted average cost of capital WACC, which can be adjusted for indicators possible risk(if such a need arises).

When the above-described rate is calculated to evaluate equity capital, it is permissible to select the average market return taking into account all risks for the discount rate. Sometimes, instead of a discount rate, the refinancing rate may be used.

In addition to quantitative data, to calculate the effectiveness of investments, it is also important to take into account qualitative indicators of investments, which should help analyze the project in terms of:

Compliance of the investment object with the plans and strategy of the organization;

Prospects for investing in a specific object compared to abandoning alternative investments;

Compliance of the investment project with generally accepted indicators in terms of the level of risk, stability from a financial point of view, further development of the enterprise, and so on;

Ensuring the necessary diversification of financial and economic activity organizations;

Availability of the necessary production and human resources to achieve the effectiveness of investments;

Influencing the investment project on the image and reputation of the enterprise;

Compliance of the project with environmental requirements and standards.

Investment performance indicators in more detail

Payback period for initial investment(payback period) is the time period that is necessary for the receipt of funds from invested funds in an amount that allows you to reimburse initial expenses.

With sufficient investment efficiency, the project’s payback period (the starting point from which net income begins to be positive) occurs faster.

The method of analyzing the effectiveness of investments using the payback period indicator is quite simple and therefore is often used. The scheme for calculating it depends on how evenly the projected income from investment is distributed. For example, if you have distributed the expected income over the years, then the payback calculation will look like this:

The payback rate (PP) is equal to the ratio of the initial investment (IC) to the value of the annual cash inflow (CFt) over the recovery period t.

There is a certain rule according to which it is decided whether it is worth implementing a project: if the payback period that you calculated turns out to be less than the maximum acceptable, the project is accepted, otherwise it is rejected.

In the case when the receipt of financial resources varies from year to year, the payback period is determined by directly calculating the years during which the total income will become equal to the volume of the initial investment.

This performance assessment indicator does not take into account the time factor in the calculation, which is a significant drawback. However, there is an alternative method of calculation that excludes it - the discounted payback period.

Discounted payback period Discounted Payback Period (DPP) - the time period required to recoup the discounted value of an investment using the present value of future financial earnings. This indicator can be determined by dividing the investment by the net discounted cash flow.

When you use discounting, the payback period of the project increases, in other words, the ratio always looks like DPP > PP. Ultimately, an investment project may satisfy the PP criterion, but at the same time be ineffective from the point of view of the DPP criterion.

Both of the above criteria are used when assessing the effectiveness of investments in cases where:

The project pays off and it is accepted;

The payback period for investments is calculated to be less than its maximum threshold (according to the organization), the project is accepted;

There are several project options for investment; the project with the shortest payback period is accepted.

It is the DPP and PP criteria (as opposed to the NPV, IRR and PI indicators) that can help roughly evaluate a project in terms of liquidity and possible risks.

Net present value(NPV) can be determined in different ways:

By deducting from the current value of the investment project the current cost of costs, which are discounted by using the weighted average price of the company’s entire capital (that is, debt and equity);

By subtracting from the present value of financial inflows the present value of outflows from shareholders, discounted at a rate that is equal to the monetary opportunity cost;

By calculating the present value of economic profit, which is discounted at a rate equal to lost opportunity costs (that is, opportunity cost).

All of the above methods will help reveal the essence of net present value from the point of view of economic benefit. In this case, the net present value indicator can be calculated using the following formula:

where CF is discounted cash flow; IC – initial investment (in the zero period); t – year of calculation; r – discount rate equal to the weighted average cost of capital (WACC); n – discount period.

In order for this model to be effective and successfully applied, the following conditions must be met:

The entire investment volume is accepted as completed;

The entire investment amount is taken into account for evaluation at the time of analysis;

Once the deposit is completed, the withdrawal process begins.

To determine the discount rate (r) you can use:

Bank loan rate;

Cost of capital (weighted average);

Opportunity cost of capital;

The organization's internal rate of return.

Thus, the NPV indicator allows us to determine the return on the implementation of an investment project from an economic point of view. That is, if its goal is to make a profit, and the value of this indicator in the calculations turns out to be negative, then already at this stage of the analysis you can finally reject the project.

Internal rate of return(IRR) characterizes the maximum cost of capital to finance an investment project.

Since the equation for determining the IRR criterion is not linear, there are several values ​​for this indicator. The effectiveness of investments during the review process can be examined from the point of view of the expected income from the project using this feature. Therefore, IRR is a very valuable criterion in the framework of the analysis of investments and their effectiveness and can be interpreted in different ways (depending on the point of view).

There is a certain rule on which decisions regarding an investment project are based according to the IRR criterion: if its value is less than the financing rate of the investment project, then it is not worth accepting, and if it is more, the project is worthy of attention and can be considered.

(MIRR) is a discount rate that equates the value of future cash flows over the life of the project and is calculated by the cost of capital (financing rate) in relation to the current cost of investment in the project (which, in turn, is also calculated by the cost of capital).

where OFt is the outflow of funds in period t; IFt – inflow of funds in period t; r – financing rate; n – project duration.

In order to evaluate an investment project in terms of real profitability, it is better to use MIRR. But at the same time, the NPV indicator will be more correct in order to analyze alternative projects that will differ in scale. This is because NPV can demonstrate how much a maximally optimal project would increase the overall value of an organization.

Concept return on investmentP directly related to profitability indexP.I..

represents the income that accrues per unit of funds invested by the company. It can be determined by the following formula:

It is important to understand that the profitability index is a relative indicator. In other words, it only characterizes the profitability of the project per unit of cost. Thus, the higher the index value, the greater the return on each cost unit that was invested in a specific project.

That is why the PI criterion is very convenient for choosing one of several alternative projects for investment (when these projects have approximately the same NPV indicators). It is also convenient to use PI when assembling an investment portfolio to achieve the maximum total value of the NPV criterion.

To understand the profitability of an investment project, there is a simple rule: the higher the profitability, the better project. In this case, the minimum rate of return must be shown by an index that is greater than one. If the index is one, then the net present value is zero. If the indicator is below this indicator, it does not meet the minimum rate of return.

Methods for assessing the effectiveness of investments

To determine the effectiveness of investments, you can use various techniques and methods. They are usually divided into three main groups:

Assessment of the effectiveness of financial investments based on the profit-to-expense ratio;

Calculate ROI based on analysis results financial statements;

Methods for assessing efficiency based on the theory of the time value of money.

Thanks to the methods described above, it is possible to analyze the effectiveness of investments within the project: whether these investments will develop and how attractive a particular project is. It is also customary to evaluate individual program objects.

There are the following types of performance assessment:

Economic assessment of the effectiveness of investments - it is used to determine the difference between income (profit) and expenses. At the same time, the results for individual project participants are not considered from a financial point of view. Most often, this type of assessment is used for projects National economy, production groups or regions.

Financial performance assessment – ​​helps determine the results of investments for all participants involved in the project. This assessment is based on a rate of return that is sufficient for all partners, while other consequences of monetary contributions are not taken into account.

Budgetary performance assessment is the consequences of investments for various budgets. As part of its implementation, the total volume of investment and the ratio of expected costs, including taxes and fees, are determined. Budgetary impact assessment shows the difference between taxes and expenses for a certain budget level, which depends on the implemented project.

Two stages of assessing the effectiveness of investments

The effectiveness of investments from an economic point of view reflects the compliance of the project with the interests of all its participants.

With successful investments, GDP increases, which is subsequently divided between all participants in the investment project (shareholders, employees, banks, and so on).

In general, all methods for assessing the effectiveness of investments are based on the principle of comparing financial costs and benefits from the project.

Before assessing the effectiveness of investments, it is necessary to determine the social significance of the project. This assessment is carried out in two stages:

Stage 1. The effectiveness of the project as a whole.

It is considered on the basis of social and commercial effectiveness, and from the point of view of one participant who is implementing this project using his own funds.

The assessment of the effectiveness of investments is carried out in order to:

Determine the potential attractiveness of the investment project for its participants;

Search for possible sources of financing.

In order to evaluate a socially significant project, it is necessary to first calculate its social effectiveness. When a project is not such, it is not worth implementing. If it is socially productive, then the next step is to assess commercial profitability. If such a project turns out to be ineffective from a commercial point of view, it is recommended to find some form of support that can increase commercial effectiveness to at least a minimally acceptable level.

If the project is local, then it needs to be assessed only from the point of view of commercial effectiveness. If the results are positive, you can move on to the next stage.

The main task of the first stage: to determine the effectiveness of the project as a whole, subject to its financing with the company’s own funds. This approach allows us to determine how effective the tactical, technological and organizational solutions provided for by a specific project are. It is the positive results of such an analysis that will attract the attention of investors to it.

Stage 2. Efficiency of participation in the investment project.

The project participants may include organizations that implement it, shareholders, banks, and so on. At the same time, more significant structures may be interested in it: industry, region, authorities. Particularly significant public programs may require financial support even at the federal level.

It is important to understand that if a large number of partners are involved in a project, a situation may arise in which their interests within the project will not coincide due to different priorities. Methods for assessing the effectiveness of investments may also differ due to the fact that each participant may have its own specifics in generating cash flows. Therefore, it is extremely important to immediately determine the return on investment for each individual aspect of the project.

There are two main components that influence the assessment of the effectiveness of participation in the implementation of an investment project:

Checking the feasibility of a specific project;

Determining the interest of all participants in it.

Of course, the project must be attractive in terms of benefits for all parties and meet their goals and interests. That is why at the second stage of assessment it is important to analyze a large number of types of effectiveness.

In addition to the positive economic effect, it is advisable to evaluate the project from the point of view of social and environmental aspects.

The social results of the project are interpreted in accordance with basic social norms, community standards and respect for human rights. During its implementation, normal working and rest conditions for employees must be ensured: from the provision of food to living space. All of the above are mandatory conditions for the implementation of the project; they are not subject to independent assessment.

However, if a project provides employees with free housing or other benefits, all costs are included in the total cost and must be taken into account when assessing its profitability. Income from these facilities, in turn, is also reflected in the analysis of project results.

Determining the effectiveness of investments requires studying a large amount of information, which the enterprise often does not have. Therefore, it is worth turning to professionals. Our information and analytical company “VVS” is one of those that stood at the origins of the business of processing and adapting market statistics collected by federal departments. The company has 19 years of experience in providing product market statistics as information for strategic decisions, identifying market demand. Main client categories: exporters, importers, manufacturers, participants in commodity markets and B2B services business.

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The main goal of an enterprise's investment policy is to select and implement the most effective ways to expand its assets to ensure the main directions of its development in the long term.

The investment policy of an enterprise is a form of implementation of the investment ideology and investment strategy of the enterprise in the context of the most important aspects investment activities at certain stages of its implementation.

In contrast to the investment strategy as a whole, investment policy is formed only in specific areas of the enterprise’s investment activity that require the most effective management to reach the main strategic goal this activity. The formation of an enterprise's investment policy can be multi-level.

The investment policy of the enterprise is aimed at efficient investment of capital and its return. Since obtaining the same income can be ensured by various alternative directions of investment, for example, organizing the production of a product or purchasing shares of another enterprise, a specific decision on the profitability of investment is made using different criteria and preferences.

Each enterprise has its own system of criteria and preferences, which is determined by the operating conditions and development strategy of the enterprise. The set of such preferences and criteria represents the investment policy of the enterprise. Thus, investment policy is a system for making decisions about obtaining income from investment activities.

The decision to invest in a project is made if it satisfies the following aspects: low cost of the project; minimizing the risk of inflationary losses; short payback period; stability or concentration of revenues; high profitability as such and after discounting; lack of more profitable alternatives. In practice, projects are selected not so much as the most profitable and least risky, but rather those that best fit into the company's strategy.

In conditions " perfect competition“The criterion for the effectiveness of an investment project is the level of profit received on invested capital. At the same time, profitability, profitability or profitability should be understood not simply as capital growth, but as such a rate of increase in the latter, which, firstly, fully compensates for the general (inflationary) change in the purchasing power of money during the period under review, and secondly, will provide a minimum guaranteed level profitability and, thirdly, will cover the investor’s risk associated with the implementation of the project.

The concept of “cost of capital” is often used in this context. On the one hand, for an entrepreneur (borrower), the cost of capital is the interest rate that he will have to pay for the opportunity to use financial resources for a certain period of time. On the other hand, when assessing the feasibility of taking out a loan, an entrepreneur should focus on the average prevailing level of profit brought by capital.

In reality, there is no single rate of interest or profit - on the contrary, there are many different interest rates: on short-term and long-term loans, on bonds, commercial securities, etc. Investors choose the most profitable form of investing money from several alternative options (the so-called “principle of alternatives”) Investment projects analyzed in the process of drawing up a capital investment budget have a certain logic.

It is customary to associate a cash flow with each investment project, the elements of which are either net outflows or net inflows of funds. Net outflow in a year is understood as the excess of current cash expenses for the project over current ones cash receipts(if the relationship is reversed, there is a net influx). A cash flow in which inflows follow outflows is called ordinary. If inflows and outflows alternate, the cash flow is called extraordinary.

Most often, the analysis is carried out by year, although this limitation is not mandatory. The analysis can be carried out over equal periods of any duration (month, quarter, year, etc.). At the same time, however, it is necessary to remember the comparability of the values ​​of the elements of cash flow, interest rate and length of the period.

The inflow (outflow) of funds refers to the end of the next year.

The discount factor used to value projects using discounted valuation methods should be consistent with the length of the period underlying the investment project (for example, an annual rate is taken only if the period length is a year).

So, the problem of assessing the attractiveness of an investment project is to determine the level of its profitability (rate of return).

The main approaches to solving this problem, used in the analysis of investment activity, can be divided into two groups depending on whether the time parameter is taken into account or not:

1) simple. based on accounting estimates (“statistical” methods):

payback period - PP

investment efficiency ratio - ARR (Accounted Rate of Return

2) discounting methods (dynamic methods):

net present value - NPV (Net Present Value);

return on investment index - PI (Profitability Index);

internal rate of return - IRR (Internal Rate of Return);

modified internal rate of return - MIRR (Modified Internal Rate of Return);

discounted payback period of investments - DPP (Discounted Payback Period).

The second group contains methods for analyzing investment projects that operate with the concept of “time series” and require the use of a special mathematical apparatus and more careful preparation of initial information.

The essence of all assessment methods is based on the following simple scheme:

the initial investments in the implementation of any project generate cash flow CF1, CF2, ..., CFn. Investments are considered effective if this flow is sufficient for:

return of the original amount of capital investment and

ensuring the required return on invested capital.

These indicators, as well as the corresponding methods, are used in two versions:

to determine the effectiveness of independent investment projects (the so-called absolute effectiveness), when a conclusion is made whether to accept the project or reject it,

to determine the effectiveness of mutually exclusive projects (comparative effectiveness), when a conclusion is made about which project to accept from several alternative ones.

To determine the effectiveness of investment costs, they must be assessed in terms of profitability. The effectiveness of making an investment decision is determined using statistical methods and discounting methods.

The effectiveness of investment projects is assessed by indicators of payback period, break-even point and budget effect.

The payback period is the period of time from the beginning of the project implementation according to this business plan until the moment when the difference between the accumulated amount of net profit with depreciation and amortization and the volume of investment costs becomes positive.

When determining the effectiveness of a project, the indicators of net profit and depreciation relate only to the implementation of the investment project and should not reflect the results of the current economic activities of the existing organization.

The break-even point is the minimum volume of production and sales of products at which costs will be offset by income, and with the production and sale of each subsequent unit of product the enterprise begins to make a profit. The break-even point can be determined in units of production, in monetary terms, or taking into account the expected profit margin.

Synonyms: critical point, CVP point.

Not to be confused with the payback point (of the project). It is calculated to determine the time when the project’s profit exceeds the costs spent on it; this is the same break-even point, only it is measured not in units, but in months and years.

The break-even point in monetary terms is the minimum amount of income at which all costs are fully recouped (profit is zero):

BEP (English break-even point) - break-even point,

TFC (eng. total fixed costs) - the amount of fixed costs,

VC (English unit variable cost) - the value of variable costs per unit of production,

P (eng. unit sale price) - cost of a unit of production (sales),

C (eng. unit contribution margin) - profit per unit of production without taking into account the share of variable costs (the difference between the cost of production (P) and variable costs per unit of production (VC)).

It can be noted that the expression is numerically equal to the ratio of gross margin to revenue.

The break-even point in units of production is the minimum quantity of product at which the income from the sale of this product completely covers all the costs of its production:



Graphically, the break-even point is shown in Figure 2. The budget effect of an investment project is defined as the balance of receipts and payments federal budget in connection with the implementation of this project. The calculations involve discounting the volume of receipts and payments by year of project implementation.

net income;

net present value;

internal rate of return;

the need for additional financing (other names - PF, project cost, risk capital);

cost and investment return indices;

payback period;

group of indicators characterizing financial condition enterprises;

project participant.




Figure 2 - Break-even point

Conditions for financial feasibility and performance indicators are calculated on the basis of cash flow, the specific components of which depend on the type of performance being assessed.

Quantitative criteria for selecting investment projects (Criteria for the financial efficiency of an investment project) mean: the criterion of net present value (Net Present Value, NPV), the criterion of internal rate of return (Internal Rate of Return, IRR), for each period t = 0,... ,T assessment of the operating and investment cash flows of the investment project, Weighted average required return on capital invested in the investment project at the beginning of period t, WACC, Payback period of the investment project, Specific financial efficiency of the investment project RFA.

In addition to quantitative criteria, projects are also considered according to the following criteria: qualitative (presence of a commercial organization that has confirmed its readiness to participate in the investment project, compliance of the investment project with the priorities of the socio-economic development of the Republic of Kazakhstan, presence of positive social effects associated with the implementation of the investment project, etc.), criterion budget efficiency (discounted budget cash flow generated by an investment project in period t (BCF)), assessment of economic efficiency (the ability to influence the formation of the economy’s GDP and ensure the dynamics of economic growth.).

In pre-investment studies, much attention is paid to substantiating the economic efficiency of the project, which includes analysis and integral assessment of all available technical, economic and financial information. Assessing the effectiveness of investments occupies a central place in the process of justifying and selecting possible options for investing in operations with real assets.

Methods for assessing the effectiveness of investment projects are ways of determining the feasibility of long-term investment of capital in various objects (projects, events) in order to assess the prospects for their profitability and payback. Investment projects, including development proposals new design machines and equipment, technology, new materials and other activities must be subject to detailed analysis in terms of the final results, the optimality criterion - an indicator expressing the maximum measure of the economic effect of the decision made for a comparative assessment of possible alternatives and selection of the best one.

When assessing a project, for example, a bank or external investor is not interested in the financial viability of an individual project; they are interested in the financial viability of the enterprise implementing the investment project. On the other hand, when evaluating a project, an enterprise may raise the question of the financial viability of the allocated project.

The same applies to economic efficiency. If a large enterprise is implementing a small-scale project, then issues of project efficiency from the bank’s point of view may be secondary to issues of the financial viability of the enterprise as a whole. At the same time, the effectiveness of a large-scale project for the enterprise implementing it is fundamentally important for making a decision on lending.

From the point of view of an enterprise selecting investment projects for investment, issues of their financial solvency at the stage of initial selection of projects are rather secondary. It is necessary, first of all, to determine the most effective ways to invest funds, and then determine how to ensure the financial viability of the project and the enterprise.

Static methods are the least labor-intensive and simplified. The range of calculations here is limited to one period (it is assumed that costs and results will be the same from period to period).

The initial parameter for economic calculations is the productivity and power of the equipment. The limitation of these methods is that the time factor is not taken into account in the calculations.

TO static methods Economic efficiency assessments include comparison methods: total economic costs; economic profit; profitability and payback period.

Dynamic methods for assessing efficiency are used when production volume, revenue, cost and other components of inflows and outflows of funds change from period to period (for example, when the planning range cannot be limited to one single period of time

Dynamic methods are based on cash flow theory and take into account the time factor. These include discounted value, accumulated value, and annuity methods.

The most common dynamic method for assessing efficiency is the discounted (present) value method, and the criteria are performance indicators: net cash flow (NCFt); net present value, or current present value, net present value (NPV); internal interest rate, or internal rate of return (IRR); profitability index (PI), as well as NPV rate; capital return period, or discounted payback period (PBP)

When assessing the effectiveness of investment projects, the following main indicators are used:

• · Investment payback period - PP (Payback Period);
• · Net present value - NPV (Net Present Value);
• · Internal rate of return - IRR (Internal Rate of Return);
• · Modified internal rate of return - MIRR (Modified Internal Rate of Return);
• · Return on investment - P (Profitability);
• · Profitability Index - PI (Profitability Index).

Each indicator is at the same time a decision-making criterion when choosing the most attractive project from several possible ones.

The calculation of these indicators is based on discount methods that take into account the principle of the time value of money. In most cases, the weighted average cost of capital WACC is chosen as the discount rate, which, if necessary, can be adjusted to indicators of the possible risk associated with the implementation of a specific project and the expected level of inflation.

If the calculation of the WACC indicator is associated with difficulties that cast doubt on the reliability of the result obtained (for example, when estimating equity capital), you can choose the average market return adjusted for the risk of the analyzed project as the discount rate. Sometimes the refinancing rate is used as a discount rate.

Payback period. In the general case, the required value is the PP value, for which the following holds:

INV t / (1 + i) t = ? CF k / (1 + i) k ,

where i is the selected discount rate.

The decision criterion when using the payback period calculation method can be formulated in two ways:

• a) the project is accepted if the payback as a whole takes place;
• b) the project is accepted if the found PP value lies within the specified limits. This option is always used when analyzing projects that have a high degree of risk.

A significant drawback of this indicator as a criterion for the attractiveness of a project is that it ignores positive cash flow values ​​that go beyond the calculated period.

Also, this method does not distinguish between projects with the same PP value, but with different distribution of income within the calculated period. Thus, the principle of the time value of money when choosing the most preferable project is partially ignored.

Net Present Value NPV: The difference between the present value of future cash flow and the value of the initial investment is called the project's net present value (NPV).

The NPV indicator reflects a direct increase in the company's capital, therefore it is the most significant for the company's shareholders. Net present value is calculated using the following formula:

NPV = ? CF k / (1 + i) k - ? INV t / (1 + i) t ,

The criterion for project acceptance is a positive NPV value. In cases where it is necessary to make a choice from several possible projects, preference should be given to the project with a larger net present value.

At the same time, a zero or even negative NPV value does not indicate the unprofitability of the project as such, but only its unprofitability when using a given discount rate. The same project implemented by investing cheaper capital or with a lower required return, i.e. with a smaller value of i, can give a positive net present value.

It must be borne in mind that PP and NPV indicators may give conflicting estimates when choosing the most preferable investment project.

Internal rate of return IRR. A universal performance comparison tool in various ways investment of capital, characterizing the profitability of the operation and independent of the discount rate (from the cost of invested funds) is the indicator of the internal rate of return IRR.

The internal rate of return corresponds to the discount rate at which the present value of the future cash flow coincides with the amount of invested funds, i.e. satisfies the equality:

CF k / (1 + IRR) k = ? INV t / (1 + IRR) t ,

To calculate this indicator you can use computer tools or the following approximate calculation formula:

IRR = i 1 + NPV 1 (i 2 - i 1) / (NPV 1 - NPV 2),

Here i 1 and i 2 are rates corresponding to some positive (NPV 1) and negative (NPV 2) values ​​of net present value. The smaller the interval i 1 - i 2 , the more accurate the result obtained (when solving problems, a difference between rates of no more than 5% is considered acceptable).

The criterion for accepting an investment project is that the IRR exceeds the selected discount rate (IRR > i). When comparing several projects, projects with large IRR values ​​are more preferable.

The undoubted advantages of the IRR indicator include its versatility as a tool for assessing and comparing the profitability of various financial transactions. Its advantage is its independence from the discount rate - this is a purely internal indicator.

The disadvantages of IRR are the complexity of calculation, the impossibility of applying this criterion to non-standard cash flows (the problem of multiplicity of IRR), as well as the need to reinvest all received income at a rate of return equal to the IRR implied by the rule for calculating this indicator. The disadvantages include a possible contradiction with the NPV criterion when comparing two or more projects.

Modified internal rate of return MIRR. For non-standard cash flows, solving the equation corresponding to the definition of the internal rate of return, in the vast majority of cases (non-standard flows with a single IRR value are possible) gives several positive roots, i.e. some possible values IRR indicator. In this case, the IRR > i criterion does not work: the IRR value may exceed the discount rate used, and the project under consideration turns out to be unprofitable (its NPV turns out to be negative).

To solve this problem in the case of non-standard cash flows, an analogue of IRR is calculated - the modified internal rate of return MIRR (it can also be calculated for projects generating standard cash flows).

MIRR represents interest rate, when increasing over the period of project implementation n the total amount of all investments discounted at the initial moment, the value is obtained, equal to the sum all cash inflows increased at the same rate d at the time of completion of the project:

(1 + MIRR) n ? INV / (1 + i) t = ? CF k(1+i)n-k,

The decision criterion is MIRR > i. The result is always consistent with the NPV criterion and can be used to evaluate both standard and non-standard cash flows. In addition, the MIRR indicator has another important advantage over IRR: its calculation involves reinvesting the income received at a rate equal to the discount rate (close or equal to the average market rate of return), which is more consistent with the real situation and therefore more accurately reflects the profitability of the project being evaluated.

Profitability rate and profitability index P. Profitability is an important indicator of investment efficiency, since it reflects the ratio of costs and income, showing the amount of income received for each unit (ruble, dollar, etc.) of invested funds.

P = NPV / INV x 100%,

Profitability index (profitability ratio) PI - the ratio of the present value of the project to the costs, shows how many times the invested capital will increase during the implementation of the project.

PI = [? CF k / (1 + i) k] / INV = P / 100% + 1,

The criterion for making a positive decision when using profitability indicators is the ratio P > 0 or, which is the same, PI > 1. Of several projects, those with higher profitability indicators are preferable.

This indicator is especially informative when assessing projects with different initial investments and different implementation periods.

The profitability criterion may produce results that contradict the net present value criterion if projects with different amounts of invested capital are considered. When making a decision, it is necessary to take into account the investment opportunities of the enterprise, as well as the consideration that the NPV indicator is more in line with the interests of shareholders in terms of increasing their capital.

Evaluation of investment projects of different durations. In cases where there is doubt about the correctness of comparison using the considered indicators of projects with different implementation periods, you can resort to the chain repetition method

When using this method, the least common multiple of the n deadlines for the implementation of n 1 and n 2 of the evaluated projects is found. They construct new cash flows obtained as a result of several project implementations, assuming that costs and income will remain at the same level (the beginning of the next implementation coincides with the end of the previous one). The net present value of multiple sales will change, but the internal rate of return will remain the same regardless of the number of repetitions, although the new cash flows may be unusual if the initial investment is greater than the earnings in the last period of sales. indicator efficiency investment project

Using this method in practice may involve complex calculations if several projects are being considered and in order to meet all deadlines, each will need to be repeated several times.

The main disadvantage of the chain repetition method is the assumption that the conditions for the implementation of projects, and therefore the required costs and income received, will remain at the same level, which is almost impossible in the current market situation. Also, the re-implementation of the project itself is not always possible, especially if it is quite long or relates to areas where rapid technological updating of manufactured products occurs.

In addition to those discussed quantitative indicators efficiency of capital investments when making investment decisions, it is necessary to take into account the qualitative characteristics of the attractiveness of the project, corresponding to the following criteria:

• · compliance of the project under consideration with the overall investment strategy of the enterprise, its long-term and current plans;
• · the prospects of the project in comparison with the consequences of refusing to implement alternative projects;
• · compliance of the project with accepted regulatory and planning indicators regarding the level of risk, financial stability, economic growth of the organization, etc.;
• · ensuring the necessary diversification of the financial and economic activities of the organization;
• · compliance of project implementation requirements with available production and human resources;
• · social consequences of the project, possible impact on the reputation and image of the organization;
• · compliance of the project under consideration with environmental standards and requirements.

The main ways to increase the economic efficiency of investments in the agricultural sector are:

• · priority direction of capital expenditures in the industry and production, taking into account specific conditions and the feasibility of supporting a particular enterprise, the formation of production and social infrastructure, ensuring economic security;
• · maximum utilization of existing production facilities due to the priority of technical re-equipment and reconstruction of agro-industrial production compared to new construction;
• · concentration of capital investments at launch facilities;
• · balance of capital investments and construction and installation works with financial and material resources, as well as with the capacities of construction and installation organizations;
• · linking the commissioning of capacities and facilities of related industries and enterprises, as well as housing and cultural services;
• · reduction of construction time, reduction of its estimated cost, improvement of quality and acceleration of the development of newly commissioned design capacities.

An important direction for increasing the efficiency of investments in the agro-industrial complex is to improve the structure of capital costs: technological, reproductive, sectoral, territorial.

Almost all sectors of the agro-industrial complex are in dire need of large-scale investments: Agriculture, processing industry, rural social sphere.

This problem must be solved, first of all, by improving the investment climate, helping to attract domestic and foreign investments to solve urgent problems of developing agro-industrial production and social problems sat down.

The main mechanisms aimed at increasing the influx of investment into the agro-industrial complex are:

• · creating conditions for self-financing of enterprises, which will ensure an increase in the share of own funds (profits and depreciation charges) in the financing of investment projects. at the same time, enterprises’ own savings are supplemented by credit sources and attracted funds (emission valuable papers);
• · sale of unfinished construction projects and effectively used property with their previous inventory;
• · budgetary financing of the most important state target programs of the agro-industrial complex.