Economic efficiency of investment projects and its types. Evaluating the effectiveness of investment projects

The effectiveness of investment projects implies the compliance of the project with the goals and interests of its participants. The effective implementation of projects increases the gross domestic product at the full disposal of society, which is divided between the firms participating in the project, banks, budgets of different levels, shareholders, etc. The income and expenses of these entities determine the choice of various efficiencies of investment projects.

Types of efficiency:

the effectiveness of the project as a whole;

effectiveness of participation in the project.

The effectiveness of the project as a whole is assessed to determine the possible attractiveness of the project for future participants and to find sources of financing.

It includes the public (socio-economic) and commercial effectiveness of the project.

Indicators of social efficiency - the socio-economic consequences of creating an investment project for the entire society (including both direct costs and results of the project) and “external”: costs and results in related sectors of the economy, social, environmental and other non-economic effects. In some cases, when these effects are very significant, the assessment of independent qualified experts can be used in the absence of documents. Indicators of the commercial effectiveness of a project take into account the financial consequences of its implementation for the participant who is implementing the investment project.

In general, project performance indicators from an economic point of view characterize technological, technical and organizational aspects.

The effectiveness of participation in a project lies in the interest of all its participants in it and the feasibility of the investment project.

The effectiveness of participation in the project should consist of:

the effectiveness of enterprises’ participation in the project;

the effectiveness of participation in the project by structures of a higher level than enterprises participating in the investment project;

efficiency of investing in company shares;

budgetary efficiency of the investment project.

Basic principles of efficiency:

reviewing the project throughout its entire life cycle until its termination;

correct distribution of cash flows, including all cash receipts and expenses associated with the implementation of the project for the billing period, taking into account the possibilities of using different currencies;

comparability of different projects;

the principle of positivity and maximum effect. From the investor’s point of view, in order for an investment project to be recognized as effective, it is necessary that the effect of the project’s implementation be “plus”; when comparing several investment project alternatives, preference should be given to the project with the greatest effect value;

taking into account the time factor. When assessing the effectiveness of a project, it is necessary to take into account various aspects of the time factor, as well as changes over time of the project and its economic environment; the time gap between the receipt of resources or production of products and their payment; inequality of costs or results at different times (earlier results and later costs are preferable);

accounting only for upcoming revenues and expenses. When calculating efficiency indicators, it is necessary to take into account only the revenues and costs planned during the implementation of the project, including costs that are associated with the attraction of previously formed production assets, as well as upcoming losses that are caused by the implementation of the project (for example, from the cessation of existing production in connection with the creation of place of the new one);

taking into account all the most significant consequences of the project. When assessing the effectiveness of an investment project, it is necessary to take into account all the consequences of its implementation. If their impact on performance can be quantified, it should be assessed in these cases. In other cases, this influence should be taken into account by experts;

taking into account the project participants, the contradiction of their interests and different estimates of the cost of capital;

phasing of assessment. At different stages of project development and implementation (selection of a financing scheme, investment justification, economic monitoring), its effectiveness is re-determined with varying depth of elaboration;

taking into account the impact on the effectiveness of the investment project of the need for working capital, which is necessary for the operation of production assets created at the stages of project implementation;

taking into account the impact of inflation (taking into account changes in resources and prices for various types of products during the project implementation period) and the possibility of using several currencies when implementing the project;

taking into account (in quantitative form) the impact of risks and uncertainty accompanying the implementation of the project.

The amount of initial information depends on the design stage at which the effectiveness assessment is made.

Initial information should include:

objective of the project;

nature of production, general information about the technology used, type of products (works, services) produced;

information about the economic environment;

conditions for the start and completion of the project, the duration of the billing period.

Before assessing the effectiveness, the social significance of the project is determined by experts.

National economic, large-scale projects are considered socially significant.

At the initial stage, performance indicators of the project as a whole are calculated.

The purpose of the stage is to create the necessary conditions for searching for investors and an aggregated economic assessment of project solutions.

For local projects, only their commercial effectiveness is subject to assessment; if it is acceptable, it is recommended to proceed directly to the next stage of assessment.

First of all, for socially significant projects, their social effectiveness is assessed. If social efficiency is poor, such projects are not recommended for implementation and do not have the right to apply for government support. If their social effectiveness is sufficient, their commercial effectiveness is assessed. If a socially significant investment project has sufficient commercial efficiency, then it is recommended to consider the possibility of using various forms of support to increase its commercial efficiency to the required level.

If the conditions and sources of financing are already known, the commercial effectiveness of the project need not be assessed.

After the financing scheme has been developed, the second stage of assessment is carried out.

At this stage, the composition of participants is taken into account and the financial efficiency and feasibility of participation in the project of each of them is calculated (industry and regional efficiency, budget efficiency, efficiency of participation in the project of shareholders and individual enterprises, etc.).

When assessing the effectiveness of investments for certain project participants, additional information is required about the functions and composition of these participants.

For participants who simultaneously perform several disparate functions in a project (for example, investors purchasing manufactured products or providing borrowed funds), these functions as a whole should be described. For those participants who have already been identified at this stage of calculations, information is needed about their financial condition and production potential.

The production potential of an enterprise is calculated by the value of its production capacity (preferably in kind for each type of product), wear and tear and composition of main technical equipment, structures and buildings, the presence of intangible assets (patents, know-how, licenses), the availability and professional qualification structure of personnel .

When a project involves the creation of a new company, previously collected information about its shareholders and the size of the expected share capital is necessary. Other participants (for example, a lending bank, a lessor of a particular property) are determined only by their functions during the implementation of the project.

Information about the economic environment of the project should include:

a forecast assessment of the general inflation index and a forecast of relative or absolute changes in prices for certain resources and products (services) for the entire period of project implementation;

forecast of changes in the currency exchange rate or the internal foreign currency inflation index for the entire duration of the project (for the previous and this points, it is desirable to formulate different forecast scenarios);

information about the taxation system.

Forecast prices are usually determined sequentially, based on the rate of price growth at each stage.

In some cases, the dynamics of forecast prices is determined based on the need to bring the structure of these prices closer to the structure of world prices.

The source of this information is long-term forecasts and plans of government authorities in the field of economic policy and finance, analysis of trends in prices and exchange rates, analysis of the price structure for resources and products (services) in Russia and the world.

Information about the tax system should contain, first of all, a more detailed list of taxes, excise taxes, fees, duties and other similar payments (hereinafter referred to as taxes).

Particular attention should be paid to taxes that are regulated by regional legislation (taxes of federal subjects and local taxes). For each type of tax, you must provide the following information:

tax base;

tax rate;

frequency of tax payments (payment deadlines);

on tax benefits (insofar as they relate to enterprises participating in the project). If the composition and amount of benefits are established by federal legislation, you can indicate the document by which they are determined. The benefits that have been introduced by the constituent entities of the federation and the local administration are described in full;

distribution of tax payments between budgets of different levels.

current or forecast prices for material resources, products and services provided for by the project (market) are used;

cash flows are calculated in the same currencies in which the project provides for the acquisition of resources and payment for products;

wages are included in operating costs in the amounts determined by the project (including deductions);

if the project involves both the consumption and production of some products (for example, the production and consumption of components or equipment), the calculation takes into account only the costs of its production, but not the costs of its acquisition;

the calculation takes into account deductions, taxes, fees, etc., provided for by law, in particular, VAT reimbursement for consumed resources, tax benefits established by law, etc.;

if the project provides for the full or partial binding of funds (purchase of securities, deposit, etc.), the investment of the corresponding amounts (in the form of outflow) is taken into account in cash flows from investment activities, and receipts (in the form of inflows) are taken into account in cash flows from operating activities ;

if the project involves the simultaneous implementation of several types of operating activities, the costs for each of them are taken into account.

The following tables are recommended as output forms for calculating the commercial efficiency of a project:

profit and loss statement;

cash flows with calculation of performance indicators.

To build a profit and loss statement, you must provide information about tax payments for each type of tax.

As an (optional) addition, a forecast of the balance of liabilities and assets by stages of calculation can also be provided (balance sheet table). In the process of calculating performance indicators, two main aggregates are used: the amount of receipts and the amount of payments.

From the definition given in the methodological recommendations of the World Bank, the amount of revenue is the amount of benefits received as a result of the project, and the amount of payments is the amount of costs for the implementation of the project.

investment costs, such as plant construction costs;

production costs (bricks);

tax payments;

costs of servicing debt obligations, interest on loans.

The costs of carrying out other transactions not related to the main activity (for example, financial transactions with free cash resources) may also be taken into account. The list of receipts and payments, regardless of the absence of receipts in the form of equity (shareholder) or borrowed capital, may include payments to service the debt. When receiving a loan, an enterprise actually rents money, and interest is only rental payments for the use of funds.

Items of receipts and payments made by the bank in relation to the project:

proceeds from loans issued for the project in the form of interest;

amounts paid to the bank as debt repayment by the company implementing the project;

dividends from the implementation of the project (in the case of the bank acquiring a part in the project - a block of shares in the company implementing the project);

receipt of funds if the bank sells its part (shares) of the project.

The following payments are implied:

costs of direct investment in the project (in case of acquisition of shares);

loans issued by the bank;

costs of servicing the bank's debt obligations on borrowed funds (payment for resources);

the bank's costs for supporting activities, overhead costs (as a result of assessing the entire set of bank projects).

Taking into account the effectiveness of each investor’s participation in the project, it is necessary to take an individual approach to the selection of items of payments and receipts used in the calculations, depending on the object of evaluation.

It is also necessary to take into account that the discounting process already takes into account the cost of capital (resources in the bank example).

In this case, it is not necessary to take into account the amounts paid by the bank to service the debt.

Of the indicators considered, each reflects the effectiveness of the project from different aspects, therefore, when evaluating any project, it is necessary to use the full set of criteria.

When considering projects, preference should be given to those that have higher efficiency indicators.

Therefore, to make a decision on project financing in the form of defining performance indicators, it is necessary to use the values obtained during the calculation for the equivalent of the financial result in hard currency.

The values of most criteria depend on the duration of the project.

To do this, it is necessary to take into account the time period for which they were calculated.

Even the most stable monetary units can be classified as such with a certain degree of convention.

Having agreed among themselves on the use of certain project performance indicators and very specific methods for their calculation, the specialists, of course, had in mind that the unit of measurement of the initial data and the results obtained would meet the same basic condition, namely constancy.

And also it must be a generally accepted monetary unit, which can be classified as conditionally stable.

It is necessary to invest in such a way that the income from each invested monetary unit is the same for each investment program.

If investment costs are distributed in such a way that the increment in utility obtained from the implementation of one investment program is less than from another, then the funds are used less efficiently than they could.

Therefore, utility can be increased by reducing investment in projects that generate negligible income. An investor who wants to make the most of his invested resources must redistribute his funds in this way and do this until the increase in utility from the investment becomes the same in all directions.

The way for consumers of investments to achieve the highest effect from them is that they must control that the marginal utility is the same for all investment programs and projects.

Investments should be used so that the marginal effect is the same for all projects.

This approach should be the basis for the choice of the economy as a whole, industry, and enterprise between different options for investment programs.

If all decision-makers in the national economy follow this rule, total utility and production volume will be maximized.

Ignoring this situation leads to stagnation of production, a decline in economic growth, and a deep economic recession.

Failure to use marginal utility leads to a deformation of the structure of investments, which are not directed to the most profitable economic sectors that best satisfy the consumer needs of the population, selected according to a completely different criterion.

This leads to a very deformed structure of the economy.

In order for wealth to be as high as possible, it is also necessary for investment activities to proceed as smoothly as possible.

In order for governments, businesses and citizens to make rational and sound investment decisions, they must have access to information about the costs and consequences of their choices. The costs of collecting information and the process of preparing for the implementation of an investment project should be very insignificant. The higher the costs associated with the preparation of investment programs, the less efficient the investment process itself can be organized.

Economic resources are limited compared to people's needs and desires.

Therefore, it is necessary to use them sparingly. Scarcity of resources means that people are forced to choose how to consume the resources available in order to achieve the greatest effect from their use.

Scarcity of resources also means that everything has a price, as there is always an opportunity cost.

To get the best effect from available resources, it is necessary to accurately balance profits and costs. At the level of a company or enterprise, the preference and profitability of investments is calculated in such a way that management rarely pays attention to some effects other than those directly related to the economy of the company or enterprise.

Meanwhile, government financial calculations examine the items of income and expenditure included in the government budget.

But the macroeconomic consequences of the decisions of the state, enterprises, companies and some citizens are more extensive.

They also include aspects that do not directly and directly fall into the final calculations of the company or into the debit or credit of the state budget.

Hence the need to expand the boundaries of the analysis of the consequences of certain investment decisions at the project stage, to predict the consequences, to predict the further impact on the course of the entire economic process. The value of the efficiency of investment investments is the minimum cost of resources for transportation and production of products as a result of these investments.

When calculating the efficiency of investing in fixed assets, the costs of creating working capital are also added.

In addition to direct investments, accompanying investments are also taken into account, ensuring the launch of the facility into operation (power lines, access roads, utility networks), and associated ones - in the development of production, providing this production with continuously renewable fixed assets.

The effectiveness of investments is not the same over time.

This is based on the ratio of the increase in capital investment to the increase in national income: the greater this ratio, the greater the capital intensity of national income, the more additional investments must be made per unit of increase in national income.

And this requires the largest share of savings in national income.

The issues of choosing volumes and directions of investment are the subject of a large number of publications and various discussions.

There are several reasons for the great interest in the problem of rational investment observed recently.

First of all, in the context of the transition to market forms of organization of production, responsibility and risk in the use of investment resources have greatly increased.

In addition, during the period of a market economy, at a time of dynamization of economic life, individual volumes of investment investments increase.

The correct choice of investment programs in such conditions is becoming an increasingly responsible and complex matter. It should also be said about the ongoing changes in the technical and organic structure of capital in the current era of information technology. With the progressive development and accumulation of technology and science, the proportion of fixed capital increases, the technical equipment of labor increases, and the scale of the means of labor and productivity grow. All this increases the connection of capital in the means of labor and reduces its maneuverability.

As a result, interest in the right choice of scale and investment objects is growing: the stakes in the struggle for profit are too high.

Economic science is faced with the question of finding criteria for selecting extremely profitable investment projects. The main criterion is to achieve maximum profit. Along with the direct benefit received today, more and more importance is being attached to the expected benefit.

The possibility of ousting competitors from the market must be assessed, and the benefits from the “secondary effect” provided by the development of subsequent investments and production are determined, i.e., benefits that go beyond the boundaries of a single company or enterprise.

The larger the enterprise, the corporation, the greater the capital they have, the more opportunities they have, along with investments that sharply bring greater profits, to make investments in which significant profits can be expected in the future. Income and expenses of the current moment in time are not equivalent to the future. Therefore, their comparison is necessary.

In market conditions, any capital invested in a firm or enterprise is defined as employed, on which interest must be paid.

Even if an entrepreneur invests his own capital, in order not to be at a loss, he must take into account in his costs the interest on capital, no less than that which could have been received, provided that it was provided to someone on a long-term loan.

This percentage is usually the basis when creating companies and other objects in market conditions, comparing options and choosing the more profitable one.

In addition to interest, which represents the “price of capital,” the possibility of making a profit and business income is also taken into account.

Here, much depends on certain production conditions: the supply of raw materials, energy and fuel, the availability of secure sales, and the degree of use of labor.

When calculating the most profitable investments within an enterprise or company, its management resorts to various calculation methods.

In practice, a large number of individual business entities often use very rough calculations based on experience, assumptions, conjectures, information about the actions of competitors, etc.

There are few firms that use systematic calculation methods. These are usually large firms that have a staff of specialists and better information.

The task of the former is to develop technology, study market conditions, etc.

If the project meets all criteria for assessing economic efficiency, then it can be accepted.

The effectiveness of the project as a whole is assessed to determine the possible attractiveness of the project for future participants and to find sources of financing.

Economic efficiency in the most general sense is a comparison of the results of economic activity with the resources spent on this activity: labor, material, natural. In this regard, this article discusses theoretical aspects and proposes a mechanism for studying the economic efficiency of an investment project using the example of the construction of a separate enterprise. To do this, the theoretical aspects of economic research are first substantiated; then the features of strategic management related to the achievement and maintenance of competitive advantages by companies are given; Afterwards, ways to increase the value of companies are proposed. In general, this approach allows one to assess the economic efficiency of an investment project and make a decision on the advisability of participating in it.

The eNPiVi method can also be useful for identifying the cost-effectiveness of P.

Where NPV is net present value;
- median, or average distribution of expected cash flows Xt in period t;
k is the risk-adjusted discount rate for future cash flows;
N - project lifespan;
- the amount of invested funds.

Social efficiency of an investment project.

provides for the solution (along with technical and economic problems) of ensuring compliance with international requirements for environmental friendliness, safety and ergonomics of manufactured goods and the functioning of the company, as well as indicators of social development of the team. direct social efficiency – creation of new jobs; launch of new production, provision of necessary services to the population

Quality control

Product quality control is an integral part of the production process and is aimed at identifying defects in finished products and checking reliability during the manufacturing process.

Product quality control is established at all stages of the production process, starting with quality control of the raw materials used and ending with determining the compliance of the released product with technical characteristics and parameters not only during its testing, but also during operation, and for complex types of equipment with the provision of a certain warranty period after installation of equipment at the customer’s enterprise. This approach to control involves conducting tests as individual parts of the product are ready (this is especially true for complex types of equipment, in particular complex equipment). Strengthening quality control is largely due to the orientation of production towards a specific consumer.

Enterprise-wide quality control is entrusted to the central quality control (or quality assurance) service, whose functions include the development of quality indicators for all types of products, quality control methods and test procedures, analysis of complaints and the procedure for their settlement, identification of the causes of defects and defects and conditions for their elimination. The control service carries out its activities in close contact with the relevant services in production departments, as well as with factory quality control services (or technical control departments). The central control service can check the quality of raw materials and materials, the technological process, the organization of control tests, the acceptance rules applied by the factory quality service or the technical control department, and sometimes selectively check the quality of products that have already passed technical control. One of the most important functions of the central control service is planning and coordinating all work in the field of quality assurance, establishing the necessary connections between quality control services in the production departments of enterprises. Through the central control service, management is centralized in the area of improving the quality of products.

Thus, control is intended to ensure verification of the execution of management decisions at all levels of management for compliance with established standards and conditions of economic activity of the enterprise.

To control product quality it is necessary to have:

1) indicators (standards, technical parameters) characterizing product quality;

2) methods and means of quality control;

3) technical means for testing;

5) the reasons for the occurrence of defects, defects and the conditions for their elimination.

In addition to the central service, product quality control is carried out in departments and workshops. They are the first to receive information about deviations from the norm, composition and quality of materials, about deviations in the technological process and warn about the occurrence of manufacturing defects. Timely information received allows you to quickly respond to disruptions in the technological process and take urgent measures to reduce losses from defects.

All information obtained during the monitoring is sent to the main dispatch service daily and in shifts.

Aggregate planning

Main indicators of the production plan

The production activities of enterprises are characterized by a system of indicators. The most important of them in the conditions of free market relations are such as demand for products and production volume, supply and production capacity of the enterprise, costs and prices of products, the need for resources and investments, sales volume and total income, etc.

Demand shows the quantity of goods that consumers are willing and able to purchase at prevailing market prices during a specified period of time. And for an enterprise or firm, demand determines the volume of products that they can sell on the market at a given time and, therefore, must produce in the planning period. In order for demand quantities to have significant economic significance during planning, they must relate to a certain period of time - day, week, month, quarter, year, etc. Therefore, it is necessary to distinguish between annual, quarterly, monthly and other indicators of demand necessary for planning the appropriate volumes of production and sales of products. The fundamental property of demand, as market economics teaches, is that, with all other parameters remaining constant, a decrease in the price of a product leads to an increase in the quantity demanded, and, conversely, an increase in price leads to a decrease in the quantity demanded. That is why there is an inverse, or negative, relationship between price and quantity demanded, called the economic law of demand (C), or the demand curve (Fig. 5.4).

Rice. 5.4. Equilibrium diagram of supply, demand and prices

An important indicator characterizing the relationship between price and demand is elasticity, which shows the change in one quantity as a result of the influence of the second, for example, demand on price. It expresses the change in the required quantity of goods in relation to the change in price and is determined by the formula

E C = ΔC / ΔC

Offer can be defined as a scale showing the different quantities of a product that a manufacturer is willing and able to produce and offer for sale on the market at any given price during a given period of time. Supply shows what volumes or quantities of goods will be offered for sale on the market at different prices, when all other factors remain constant. As prices rise, the quantity supplied also increases, and a reduction in prices leads to a corresponding decrease in supply. The law of supply (L), or the supply curve, shows that producers want to produce and offer for sale more of their goods at a high price, and less at a low price (Fig. 5.4). Equilibrium between supply and price is achieved at the point of intersection of the demand curve with the supply curve, called the equilibrium point (P) in economic theory. At this point, at the equilibrium price (Pr), the plans of producers and consumers for the production and purchase of products coincide.

Equilibrium determines the quantity of a good that buyers want to purchase and producers want to offer at the appropriate market price prevailing at a given time. When prices reach an equilibrium value, they determine such a volume of goods that all consumers who want to buy them at the market price have free access to them. At the same time, manufacturers who want to sell their product or service at a given price can also easily find a buyer for their goods. Thus, the equilibrium point reflects the plans of producers of goods and the demands of consumers, which coincide at current prices and the corresponding volumes of production and sale of goods and services.

Volume of production characterizes the quantity and range of products produced at the enterprise in the planned period of time. Therefore, one should distinguish between annual, quarterly, and monthly production volumes. When determining the volume of output of a specific product and including it in the annual production plan, it is necessary to take into account the amount of existing demand, its growth rate, the level of market prices, the amount of profit received, the degree of risk, the influence of competition, production costs, the possibility of reducing the cost of a unit of finished products and other factors and conditions for the production and sale of products. The planned range of products should generally ensure a balance of supply and demand, as well as a balance between the annual output volume and the production capacity of the corresponding division or the entire enterprise. Therefore, in the process of drawing up a production plan, it is necessary to correctly select the output volume meters used in the calculations.

In the theory and practice of planning at machine-building enterprises, natural, labor and cost measures of production and some of their varieties are widely used.

Natural meters express the physical volume of specific types of products in units such as pieces, tons, meters (linear, square, cubic), and serve as the basis for establishing labor and cost meters. However, in practice, the range of their application is limited to calculations of production volumes of only homogeneous products.

Labor meters are universal and most common in production. They characterize the volume of output in standard hours (man-hours, machine hours), standard rubles and other standardized indicators of labor costs or working time. These meters are the basis for technical-economic, social-labor, operational-production and many other types of intra-company planning.

As our research shows, in the context of the transition to market relations, characterized by high levels of inflation, instability of current prices for material resources and tariffs for labor resources, it is advisable to make wider use of a system of natural and labor measures that ensure higher reliability and stability of planned calculations. Based on these meters, it is possible to create in the future, as market prices stabilize, a system of cost standards suitable for subsequent use in a market economy. Such standards can become “the basis for managing production costs at enterprises.”

Cost standards characterize the volume of production in monetary terms. They make it possible to compare, analyze and summarize the volume of output of heterogeneous products on a single price basis. However, it is necessary to take into account the existing level of changes in market prices when planning and measuring the volumes of products produced at different times. Therefore, now, as already noted, in the course of planning production and sales of products, it is preferable for an enterprise to use natural and labor standards, from which it is easy to move on to the cost measurement of the volume of products planned or produced in the corresponding period of time.

In the process of developing a plan for the production and sale of products, all volumetric calculations are carried out for each product item. Under nomenclature refers to the list or composition of manufactured products by type, type, grade, size and other characteristics. All products manufactured at the enterprises are species or intended purpose is classified into main products, components and spare parts, semi-finished products, works, services, etc. By stages production and circulation, products can be unfinished, finished, or commodity, sold, or sold, gross, etc. According to economic According to the content, pure, conditionally pure and standard pure products are distinguished. During intra-company planning, it is customary to determine the gross (total) and intra-company turnover of products. Gross turnover represents the total volume of production, performance of work and provision of market services planned for the workshops and services of the enterprise in value terms. Internal turnover characterizes the part of the total production volume of an enterprise circulating between its workshops and divisions. Gross output(VP) is determined by the difference between gross (VO) and intra-company turnover (ICT) according to the formula

VP = VO - VnO

System of main planned indicators

Strategic	Long-term	Current	Operational
Name of product (services)	List of the most important product range	List and quantity of the entire product range	Detailed list and quantity of the entire product range
Approximate amount of capital investment, in rubles.	Amount of resource expenditure by type	The amount of resources spent by type and range of products	Detailed and operational standards for resource consumption by type
Estimated moving deadlines	Calendar deadlines	Exactly set deadlines	Hourly and daily execution schedules
Responsible executors	Responsible executors and co-executors by stages and types of work	Detailed list of performers by stages and types of work and product range	Detailed distribution of work among performers
Efficiency: goal achievement, cost recovery	Excess of income over expenses (profit)	Amount of net income;	Timely and complete implementation of the plan for the product range

Productive capacity - This is the maximum possible annual output of products, works and services in the established nomenclature and assortment with the fullest use of all available resources.

Production capacity depends on the quantity and quality of equipment, the maximum possible productivity of a unit of equipment, the decision made regarding the shift ratio, the nomenclature and range of products, the labor intensity of products, and the level of labor organization.

When planning, the following types of production capacity are distinguished:

· entrance,

· day off,

· average annual

Costs are the costs of purchasing factors of production.

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Course work

Economic efficiency of the investment project

Selishcheva Natalya Andreevna

Vladivostok 2012

Introduction

2.5 Calculation of the efficiency of an investment project for the construction of a gas processing complex

Conclusion

Bibliography

Applications

investment project gas processing complex

Introduction

Investment activity is extremely important because it creates the basis for the stable development of the economy as a whole, its individual sectors, and economic entities.

All enterprises are to one degree or another connected with investment activities. As a result of its functioning, any company is faced with the need to invest funds in its development. In other words, for a company to develop effectively, it needs to have a clear policy for its investment activities. In any effectively operating company, issues of managing the investment process occupy one of the most important places.

In a market economy, there are quite a lot of investment opportunities. At the same time, any enterprise, as a rule, has limited free financial resources available for investment. Therefore, it is necessary to choose the optimal investment project.

The implementation of investment goals involves the formation of investment projects that provide investors and other project participants with the necessary information to make an investment decision.

The concept of an investment project is interpreted in two ways:

as an activity (event) that involves the implementation of a set of actions that ensure the achievement of certain goals;

as a system that includes a set of organizational, legal, settlement and financial documents necessary for carrying out any actions or describing these actions.

This work talks about the assessment of capital investments in real investment projects, therefore the concept of “investment project” is used in the second meaning.

1. Economic efficiency of the investment project

1.1 The concept of an investment project and project cycle

In the Russian Federation, investments (in accordance with the Federal Law on investment activities in the Russian Federation, carried out in the form of capital investments) are usually understood as funds, securities, other property, including property rights, other rights having a monetary value, invested in objects of entrepreneurial and (or) other activity in order to make a profit and (or) achieve another beneficial effect.

Investment activity - making investments and carrying out practical actions in order to make a profit and (or) achieve another useful effect. Capital investments - investments in fixed assets (fixed assets), including costs for new construction, expansion, reconstruction and technical re-equipment of existing enterprises, purchase of machinery, equipment, tools, inventory, design and survey work and other costs.

Investment project - justification of the economic feasibility, volume and timing of capital investments, including the necessary design and estimate documentation developed in accordance with the legislation of the Russian Federation and duly approved standards (norms and rules), as well as a description of practical actions for making investments (business plan).

The payback period of an investment project is the period from the date of commencement of financing of the investment project until the day when the difference between the accumulated amount of net profit with depreciation charges and the volume of investment costs becomes positive; (paragraph introduced by Federal Law dated January 2, 2000 N 22-FZ).

In international practice, an enterprise development plan is presented in the form of a business plan, which is essentially a structured description of an enterprise development project. If the project is related to attracting investments, it is called an “investment project.” Typically, any new project of an enterprise is, to one degree or another, associated with attracting new investments. In the most general understanding, a project is a specially designed proposal to change the activities of an enterprise, pursuing a specific goal.

Projects are usually divided into tactical and strategic. The latter usually include projects that involve a change in the form of ownership (the creation of a rental enterprise, a joint stock company, a private enterprise, a joint venture, etc.) or a fundamental change in the nature of production (the release of new products, the transition to fully automated production, etc.). ). Tactical projects are usually associated with changing production volumes, improving product quality, and modernizing equipment.

The general procedure for streamlining the investment activities of an enterprise in relation to a specific project is formulated in the form of a so-called project cycle, which has the following stages:

Project formulation (sometimes the term "identification" is used). At this stage, the top management of the enterprise analyzes the current state of the enterprise and determines the highest priority directions for its further development. The result of this analysis is formalized in the form of a certain business idea, which is aimed at solving the most important problems for the enterprise. Already at this stage it is necessary to have a more or less convincing argument regarding the feasibility of the idea. Several ideas for further development of the enterprise may emerge. If they all seem equally useful and feasible, then several investment projects are developed in parallel so that a decision on the most acceptable one can be made at the final stage of development.

Development (preparation) of the project. After the business idea of the project has passed the first test, it is necessary to develop it until the moment when a firm decision can be made - positive or negative. At this stage, gradual clarification and improvement of the project plan is required in all its directions - commercial, technical, financial, economic, investment, etc.; at this stage, initial information is searched and collected to solve individual project problems. It is necessary to realize that the success of the project depends on the degree of reliability of the initial information and the ability to correctly interpret the data that appears in the process of project analysis.

Project examination. Before starting a project, its qualified examination is a highly desirable stage in the project life cycle. If the project is financed mainly by a strategic investor (credit or direct), then the investor himself conducts the examination, for example, with the help of some reputable consulting firm, preferring to spend a certain amount at this stage rather than lose most of his money in the process of project implementation . If an enterprise plans to implement an investment project primarily at its own expense, then an examination of the project is highly desirable to verify the correctness of the main provisions of the project.

Implementation of the project. The stage covers the actual development of a business idea until the moment when the project is fully put into operation. This includes monitoring and analysis of all activities as they are carried out and control by regulatory authorities within the country and/or foreign or domestic investor. This stage also includes the main part of the project implementation, the task of which is ultimately to verify the adequacy of the cash flows generated by the project to cover the initial investment and provide the return on investment desired by investors.

Evaluation of results. It is carried out both upon completion of the project as a whole and during its implementation. The main goal of this type of activity is to obtain real feedback between the ideas included in the project and the degree of their actual implementation. The results of such a comparison create invaluable experience for project developers, allowing them to be used in the development and implementation of other projects.

The criterion for the effectiveness of an investment project for a credit or institutional investor will be the return on the funds invested. Moreover, since we are talking about the future with its uncertainty, this task has two aspects: the first is the absolute value of the project’s profitability and the second is the probability of achieving it.

In this regard, it is necessary to take into account the difference in the interests of the creditor bank and the institutional investor when investing funds. The bank, as a rule, lends to the enterprise at an interest rate that fluctuates around the equilibrium market value. Accordingly, the bank is not interested in the excess of income from the implementation of the project over the amount ensuring the repayment of interest and principal on the loan. On the other hand, the bank does not participate in the authorized capital of the enterprise and, therefore, cannot directly influence the decisions taken to implement the project. These two factors determine the bank's priorities when issuing funds; the main focus is on the reliability of the project, that is, guarantees of repayment of principal and interest. On the contrary, an institutional investor, who has a share of the profits from the project and participates in decision-making on its implementation, is more interested in the effectiveness of the project.

The effectiveness of the project is analyzed using simple (statistical) methods and discounting methods. Simple (statistical) methods are based on the assumption of equal importance of project income and expenses received in different periods of time. The main statistical methods are:

calculation of a simple rate of return in the form of the ratio of net profit on the project for the analyzed period to total capital costs (investments);

calculation of the payback period as the number of years for which the net profit received from the project plus depreciation charges (the so-called “net revenue”) will cover the capital costs (investments).

Statistical methods can serve as a tool for rough assessment of a project, but their imperfection lies in the assumption of equal importance of income and expenses related to different periods of time. Meanwhile, the investor is faced with the problem of so-called “opportunity costs”, which consists in the fact that during the period between two moments of receipt of funds, he can make a risk-free and liquid investment of earlier income (for example, in government treasury bonds) and thereby receive a guaranteed income from earlier receipts to the time of receipt of later receipts. This means that income and expenses relating to different periods of time do not have the same value for the investor, or, expressed differently, capital has a time value (interest). Therefore, to conduct a rigorous analysis of an investment project, it is necessary to use discounting methods, that is, bringing project income (expenses) relating to different periods of time to one denominator through the use of a special coefficient - discount, reflecting the time value of capital. As a discount, you can use interest on liquid, risk-free investments.

Another discount option is the so-called target rate of return, equal to the minimum acceptable return on investment for a potential investor. The target rate of return can be determined as a result of direct negotiations with the investor or studying the specifics of the industry in which the investor is engaged; for example, for a bank, the target rate of return may be the interest on deposits, or the discount rate of interest, or the interest on an interbank loan, but, most likely, the average interest rate on loans issued (in the latter case, the excess of the investment efficiency of the target rate of return will characterize the “ceiling of reliability » loan repayment to the bank).

The main discounting methods are:

net present value method;

integral current value method;

internal rate of return method.

Net present value method

“Net present value” (the English abbreviation NPV for net present value) refers to the difference between discounted income and expenses over a certain period of time. Thus, the net present value (NPV) indicator is calculated for a certain period, and the maximum period for calculating this indicator is the full investment cycle (the period of full depreciation of the investments made). Since project revenues generally begin to arrive at a later date than the capital expenditures incurred, the net present value calculated over a longer period usually has a greater positive value. We present the calculations using formula (1).

where NPV is the net present value for a period of time equal to n years;

Di - net financial flows (the difference in cash receipts and expenditures) in the i -th year;

Ri is the discount value for i years from the start of the project (compound interest rate on risk-free investments, or target rate of return).

As noted above, net present value is always calculated over a specific period. The maximum calculation period is the useful life of the investment until full depreciation of the fixed assets created within the project (the so-called depreciation, or investment, cycle). It can be useful for an investor to calculate several net present value indicators for different time periods, since for the short-, medium- and long-term period he may have different investment strategies based, in particular, on the less uncertainty of the short-term period. It is important that the real usefulness of investments for an investor on a certain date consists not only of the net financial flows accumulated since the beginning of the project, but also of the liquid value of the capital investments made. The amount of money that can actually be obtained from the sale of an unfinished construction project or fixed assets that have already been put into operation. The liquid value of investments can be either greater or less than the capital costs incurred and is assessed by experts. The real utility of an investment for an investor at a certain date from the start of the project can be expressed through the integral present value (ITV) indicator. Let's reflect this in formula (2):

where (ITS)i is the integral current value i years after the start of the project;

(NPV)i - net present value i years after the start of the project;

(LP)i is the liquid value of investments i years after the start of the project;

Ri is the discount value i years after the start of the project.

It should be borne in mind that the liquid value of investments is discounted, that is, reduced to the time of the start of the project. Theoretically, the indicators of integral and net present value should coincide at the end of the depreciation cycle, when the liquid value of the investment becomes equal to 0.

Internal rate of return method

From a formal point of view, the internal rate of return method (IRR, the English abbreviation IRR for internal rate of return) is the inverse of the net present value method. Its essence is that the method of successive approximation is used to determine the discount value at which the net present value for a given period is equal to 0.

At first glance, the net present value and internal rate of return methods may seem completely interchangeable, providing the same result. However, this is not quite true. The difference between the two methods is as follows.

The internal rate of return, unlike net present value, is not directly linked to the criterion of maximizing the well-being of the company. If you need to answer the question whether or not to invest in a given project, based on the minimum possible target rate of return (the minimum acceptable discount amount at which the net present value for the period will be greater than 0 and/or which is the minimum acceptable value for the internal rate of return ), then you can use the indicator (NPV or IRR). When it comes to an alternative solution, i.e. about the choice between two or more projects, then these two indicators may conflict.

Thus, a higher net present value for project A is achieved due to the greater value of the investor’s resources “weighted” by the immobilization period (extensive way of making a profit), and the better indicator of the internal rate of return for project B characterizes a higher return per unit of immobilized funds (intensive way to make a profit).

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Figure 1 Diagram of the dependence of the value of the current value on the value of the discount (the contradiction between the net present value and the internal rate of return)

In other words, the net present value indicator characterizes the amount of profit on invested capital, and the internal rate of return indicator characterizes the amount of profit on invested capital. Consequently, the internal rate of return and net present value, with all their interdependence, characterize different aspects of the project’s attractiveness for a potential investor and therefore must simultaneously appear in the financial and economic justification and business plan of the investment project.

Thus, the use of the three listed methods allows us to obtain a comprehensive assessment of the effectiveness of investments, in which each indicator used characterizes a separate aspect of the financial results of the project for the investor:

The net worth method allows you to estimate the amount of profit on invested capital;

the integral present value method provides a quantitative expression of the total utility of investments;

The internal rate of return method characterizes the rate of return on invested capital.

The internal unity of these three methods allows us to consider the category of investment efficiency in several planes, depending on the priorities of the investor and possible scenarios for the development of the project.

So, in the context of the effectiveness of the project, the investor is interested in the following main questions:

What is the total amount of money he will receive for the entire useful life of his investments, including in the context of different project implementation periods (net present value indicator);

what total amount of money will he receive from the investment if for some reason the project is terminated at an intermediate stage and the unfinished construction project will have to be sold (integral current value indicator);

what is the comparative return per unit of investment resources compared to existing alternative investments (internal rate of return indicator);

does the project remain profitable when the market interest rate on attracted investment resources increases; what is the upper limit of this increase (internal rate of return).

Analysis of the effectiveness of the project allows us to estimate the possible interval of their change under various conditions of project implementation. Probabilistic characteristics are used for:

making investment decisions,

ranking projects,

justification of rational sizes and forms of reservation and insurance.

When applying a particular risk analysis method, it should be borne in mind that the apparent high accuracy of the results can be deceptive and mislead analysts and decision makers.

1.2 Economic efficiency of the project and its indicators

Economic efficiency is one of the important categories that characterizes the performance of an enterprise and the possibility of implementing a project aimed at improving its performance. In its most general form, economic efficiency can be defined as the ratio of the results obtained to the costs incurred or resources consumed. Let us demonstrate this with formula (3):

Economic efficiency is a relative value. The absolute value expressing any useful result is the economic effect. From the definition of economic efficiency, the dual nature of this category is clear: it is determined in relation to costs or resources, which creates certain difficulties in its practical calculations. The resources of the enterprise are: fixed assets, working capital, labor, natural and financial resources. Costs characterize the measure of consumption of a particular type of resource at a certain point in time. But different types of resources are consumed unevenly (they have different turnover rates in the production process), which makes it difficult to convert them into costs. For example, fixed assets are used in an enterprise for a long period of time, do not change their physical form and transfer their value to the cost of production gradually, in parts as they wear out. Working capital, on the contrary, is consumed in each production cycle and immediately transfers its value to the cost of finished products. Since it is difficult to convert resources into costs and to accurately determine the quantity and speed of turnover for each type of resource, economic efficiency is assessed using indicators based on both cost and resource approaches.

Currently, in accordance with the “Methodological recommendations for assessing the effectiveness of investment projects and their selection for financing”, it is recommended to evaluate effectiveness according to the following indicators:

net present value (NPV);

profitability index (ID);

internal rate of return (IRR);

payback period.

All these indicators are based on taking into account the magnitude of the time factor. The time factor in calculations of economic efficiency is determined to take into account the multi-temporal nature of the activities being implemented. The need to take into account the time factor is due to the fact that the implementation of large projects requires a long period of time, during which inflation operates, invested funds do not produce returns, the initial design conditions, prices for raw materials and finished products change.

In order to compare costs at different times, their values are reduced to a single point in time, i.e. start time of the project, by calculating the discount factor (reduction) according to formula (4):

where t is the number of the calculation step: month, quarter, year.

The t value can vary within (formula (5):

where T is the calculation horizon or the last period of time for which the project’s effectiveness is assessed;

E is the discount rate that is constant over time for each calculation.

In a market economy, the discount rate is determined based on the bank interest rate on long-term deposits and the amount of investment risk associated with the implementation of a particular project. For each investment project, its own discount rate is determined, based on the conditions for obtaining a loan and the degree of risk of the project.

If the discount rate changes over time, then the discount factor is determined by formula (6):

where Еt is a variable discount rate.

Taking into account the discount factor, the calculation of the reduced capital investments (CPR) is carried out, i.e. such, the cost, the value of which is determined at the time of the start of the project. We present the calculations in formula (7):

where t is the calculation step or the time period for which the calculation is carried out;

Кt - capital investments at the t-th step of calculation or in the t-th period of time.

Calculation of indicators of net present value, profitability index, internal rate of return, payback period is carried out taking into account the discount factor.

Net present value (NPV) or integral effect 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, as shown in formula (8):

where Rt are the results achieved at the t-th calculation step;

Zt - costs incurred at the T-th calculation step.

In practice, a modified formula for determining net present value may be used. When calculating it, the amount of capital investments is subtracted from the costs Zt and costs without taking into account capital investments are denoted Zt+. This formula (9) looks like:

The project is considered effective if the net present value is positive. If several projects are compared, then the optimal one is the one whose net present value is positive and maximum.

The profitability index is the ratio of the sum of the reduced effects to the amount of capital investment, as shown in formula (10):

When determining it, the same elements are used as in the modified formula for net present value, and if the net present value is positive, then the value of the profitability index is more than 1.

A project is considered effective if the value of the profitability index is more than 1.

The internal rate of return represents the discount rate at which the magnitude of the reduced effects is equal to the magnitude of the reduced capital investments.

They are determined by solving the following equation:

where is Evn. - internal rate of return. If its value is greater than or equal to the rate of return on invested capital required by the investor, then from his point of view, investing in this project is effective.

The payback period is the minimum time interval (from the start of the project), beyond which the integral effect becomes and remains positive in the future, i.e. This is the time during which the results obtained from the implementation of the project cover the amount of funds invested in it.

2. Assessing the effectiveness of an investment project using the example of VOJSC Khimprom

2.1 Economic characteristics of the enterprise VOJSC Khimprom

OJSC "Khimprom" is one of the largest enterprises in the domestic chemical complex.

Currently, the main activities of JSC Khimprom are the production and sale of chemical products for technical purposes, and this is an impressive list of inorganic and organochlorine compounds, polymers and plasticizers, solvents and refrigerants.

One of the new activities of the enterprise is the production of fire retardants (flame retardants).

OJSC "Khimprom" is actively engaged in the production of consumer goods, including various types of synthetic detergents, insecticides, disinfectants and detergents, and car care products.

In 2005, JSC Khimprom launched a modern Italian line for the production of aerosol preparations.

JSC Khimprom has enormous production capacity for plant protection chemicals and intends to actively develop this promising area.

The range of products includes more than 120 items. This is the widest range among chemical enterprises in our country.

OJSC "Khimprom" has all the capabilities to produce high-quality chemical products that meet the most demanding requirements of customers in Russia and abroad.

Construction of the first-born of Volgograd Chemistry began in mid-1929, and already on June 1, 1931, the first units were launched. Built among 518 industrial facilities planned for commissioning under the first five-year national economic plan of the USSR, the plant gradually increased its production capacity. By the beginning of 1938, the enterprise became a leader in the industry in terms of its potential.

The sixties of the last century became “stellar” in the history of the chemical plant. Their first half was characterized by the highest rates of development of new technologies, industries, and equipment. Over the seven-year period (1959-1965), it was possible to increase the volume of output by 4.9 times. More than 800 improvement proposals were introduced by factory inventors. On March 26, 1965, the enterprise, which until then bore code names - plant PO Box No. 91, chemical plant "Volga", plant PO Box No. 5 - was given its first open name: Volgograd Chemical Plant named after. S.M.Kirova.

The plant continued technical re-equipment and reconstruction. The range of products produced exceeded one hundred items. Considerable importance was also given to the culture of production, establishing and maintaining exemplary order and landscaping the territory of the enterprise.

Since 1988, the plant has reached the international level. The first to establish direct trade and economic ties were with Bulgaria and Hungary. Good experience was gained in the further development of foreign trade activities.

In the early 90s, the country began to experience a sharp decline in production volumes, and the living standards of the population dropped noticeably. All this did not bypass Volgograd chemists. In the first years of the post-Soviet period, Khimprom employed about 12 thousand people, produced about 160 types of products, and the company supplied its products to more than 10 thousand consumers, including 12 countries far and near abroad.

On February 21, 1995, PA Khimprom was transformed into a Volgograd open joint-stock company, the main shareholder of which was the state represented by the Ministry of Property Relations of the Russian Federation (51% of shares). Unfortunately, the enterprise turned out to be not quite ready for the new economic and social conditions of the transition period. It was not possible to avoid significant accounts payable due to the uncontrolled rise in energy prices, huge costs of maintaining social infrastructure and insufficient profits due to a decrease in consumer payment demand.

The Management Board and the Board of Directors of the enterprise developed measures to increase the volume of production and sales of seasonal products, increase profitability and product quality. By mid-1996, the financial position of the enterprise had improved somewhat. On July 31, 1996, JSC Khimprom was renamed into Volgograd Open Joint Stock Company Khimprom. The company operates under this name to this day.

The Company is an independent commercial organization with the rights of a legal entity. The Company has an independent balance sheet, settlement and other accounts in banking institutions of the Russian Federation and abroad in rubles and foreign currency, as well as a duly registered trademark and other means of visual identification.

The amount of the authorized capital of the Company is 200,804,100 (two hundred million eight hundred four thousand one hundred) rubles.

The main performance indicators over the years 2006-2008 are reflected in Table 1.

Table 1 Key performance indicators over time for 2006-2008

Indicators	Absolute deviations +(-)	Deviations in %

Revenue from sales of services
Cost of services provided
Gross profit
Revenue from sales
Other operating income
Other operating expenses
Revenue from sales of services
Non-operating expenses
Profit before tax
Net profit

The cost of production in 2008 increased by 347,597 thousand rubles. or by 15.15%.

Due to the fact that the growth in sales revenue was higher than the growth in costs, in 2008 there was an increase in profit from sales of sales by 78,518 thousand rubles or 3.5 times.

Summing up the overall results of activities, it must be said that the highest indicators were noted in 2008. This is due to an increase in production volumes.

Recently, a new direction has emerged - the processing of natural gas into chemical products. Currently, the laboratory team is theoretically considering the concept of technology for producing ethylene and propylene from methane under the conditions of chlor-alkali production infrastructure. The laboratory has a rich, at the academic institute level, instrumental base in the field of processing PVC into plastics. Here, intensive development of polymer compositions is being carried out in order to reduce their cost, reduce flammability and smoke formation. The plastics testing complex determines the mechanical properties of manufactured products. The laboratory equipment allows the use of gas-liquid chromatography (with capillary columns), spectrophotometry, and atomic emission spectroscopy with inductively coupled plasma. To carry out work on the inspection of technical devices with the issuance of conclusions on the service life of their safe operation, the division has a non-destructive testing laboratory, instrumentation, regulatory and technical documentation, and specialists in the field of industrial safety. The laboratory has a license from Rostechnadzor to conduct industrial safety examinations of technical devices used to conduct industrial safety examinations of technical devices used at hazardous production facilities, which allows us to give conclusions about the suitability of a particular equipment and determine its service life.

2.2 Main results of the analysis of the enterprise’s economic activities

OJSC Khimprom is a large holding company, which includes subsidiaries. Consolidated financial statements for 2008-2009 showed an increase in the book value of assets and equity. The source of increase in the value of equity capital is the company's net profit, which tends to grow.

The value of own current assets for the analyzed period is decreasing, which is due to the rapid growth of accounts payable compared to the dynamics of current assets. In the structure of current assets, the main share is accounts receivable, which also increases in the analyzed period. An increase in accounts receivable affects a decrease in turnover rates.

In the analyzed period, a negative trend in the decline in solvency indicators was also revealed, which was caused by a decrease in the amount of own working capital.

At the same time, there is an increase in performance indicators.

Return on sales characterizes the share of profit from sales in total revenue. It increased from 24% to 28%, because sales profit grew at a faster rate than revenue. Net profit margin reflects the share of net profit in the company's revenue. There is a tremendous increase here from 10% in 2008 to 31% in 2009, this is explained by a sharp jump in net profit due to an increase in the “other expenses” item, this is due to the sale of old mercury electrolysis equipment due to the transition to new technology. The profitability of all assets of an enterprise shows the profit per each cost unit of assets and is an indicator of competitiveness. In addition, it helps to identify the impact of taxes and other payments from profits. At Khimprom OJSC there is an increase in this indicator from 28.6% to 36.2%, which indicates an increase in competitiveness due to an increase in sales profits.

An analysis of the profitability indicators of the enterprise OJSC Khimprom is presented in Table 2.

Table 2 Analysis of enterprise profitability indicators

Indicators	Calculation formula	Changes

1. Sales revenue, million rubles.
2. Cost, million rubles.
3. Profit from sales, million rubles.	page 1 - page 2
4. Net profit, million rubles.
5. Average annual value of property, million rubles.
6. Average annual cost of insurance, million rubles.
7. Average annual value of OK, million rubles.
Profitability
	p.3/p.1
Net profitability, %	p.4/p.1
Assets, %	p.3/p.5
Own capital, %	p.3/p.6
Working capital, %	p.4/p.7

Return on equity reflects the efficiency of using the enterprise's equity capital. In 2009, this ratio was 72.5%, i.e. The company uses its own capital as efficiently as possible. Return on working capital shows the ability of an enterprise to provide profit from working capital; this indicator changed from 50% to 175%, i.e. Each ruble of working capital brought 50 kopecks, then in 2009 it began to bring 175 kopecks, therefore, the efficiency of using working capital has increased. Thus, the profitability indicators of Khimprom OJSC indicate that the company’s profitability has increased, because all indicators reflecting operational efficiency have increased significantly.

To obtain a more complete picture of the financial condition of Khimprom OJSC, it is necessary to calculate such indicators as the effect of financial leverage (EFF), the strength of financial leverage (SFR), the strength of operating leverage (SOR) and the level of the cumulative effect of both levers (USE). We present the calculations in Table 3.

Table 3 Information on the financial condition of JSC Khimprom

Indicators	Calculation formula
1Return on assets (ERA), %	From the table 2
2Return on equity (REC), %	From the table 2
3Balance sheet profit, thousand rubles.
4 Interest on loan, thousand rubles.
	str2-str1(1-dn)
	1+page4/page3
	Revenue - variable costs/gross profit
	Page6 *page7

The meaning of financial leverage is the action of increasing the return on equity capital (REC) at the expense of “other people’s money” - borrowed funds (BL), the EFR shows how much the return on each own ruble has increased compared to the economic return on all assets in percentage terms, this indicator on our the enterprise increased from 40% to 45%. The effect of operating leverage is that any changes in sales revenue generate stronger changes in current profit: Sales are growing, therefore, current profit is growing at a faster rate; Sales are falling, therefore, current profits are falling at a faster rate. At Khimprom OJSC there is practically no operating leverage, this is explained by the insignificant share of fixed costs in the total volume of production, namely this share is 0.1%. The level of total risk is measured by the value of the USE - the level of the cumulative effect of both levers. The higher the value of the ESE, the higher the total risk of the enterprise.

The ESE shows by what percentage profit will change if sales change by 1%. At this enterprise, the level of total risk is insignificant and tends to decline. This indicates stable, non-risky production.

In general, the enterprise has the necessary economic conditions to implement an investment project.

2.3 Forecasting the development prospects of VOJSC Khimprom

It is known that the capacity of the PVC market in the world and in Russia is determined not only by the volume of demand for PVC, but also by the volume of demand for caustic soda, which is obtained in the production of chlorine, as one of the two main sources of raw materials for the production of polyvinyl chloride. Forecast of PVC market capacity for the future for the period up to 2020. presented in Table 4.

Table 4 Forecast of PVC market capacity for the period until 2020

Name

Demand of everything
Including:
Plastic compounds
Profile molded products
Linoleum
Pipes and pipeline parts

Container and packaging
Other products

The volume of the Russian PVC market in 2020 should increase by 2.9 times compared to 2006 and reach 1,540 thousand tons per year. Moreover, the highest growth rates should be expected for such consumers as pipes and pipeline parts, containers and packaging, and profile molded products, which are the most in demand in world practice.

The availability of free space (the property of OJSC Khimprom) intended to accommodate the 2nd and 3rd stages of the Sayan Chemical Plant significantly reduces the cost of building new production facilities. The social infrastructure of Volgograd is also designed to support a large industrial complex (in addition to the existing PVC production and its continuation in the 2nd and 3rd stages, it was also planned to build an oil refinery for the production of ethylene and a phosphate fertilizer plant at the Volgograd site). Based on these factors, the production site of Khimprom OJSC and the city of Volgograd itself is the most favorable point for locating the largest gas chemical complex.

The regional project is the beginning of a long journey to develop the field. The regional project at the industrial site of JSC Khimprom provides for the construction of a gas processing complex (GPC), consisting of gas separation plants for natural gas (with the release of ethane, propane, butanes), production of ethylene, separation and liquefaction of helium. Ethylene is used at Khimprom OJSC to increase the production of polyvinyl chloride to 400 thousand tons. in year.

For the construction of a helium separation plant, Cryoplast CJSC was created on November 3, 2007, the founders being Khimprom OJSC and KRIOR LLC, a Russian manufacturer and supplier of commercial helium. In May 2007, JSC “Krioplast” completed the development of a feasibility study (project) “Helium Production”.

The regional project is already being implemented. The operator of the project is the East Siberian Gas Company, which is constructing the Kovykta - Volgograd - Irkutsk gas pipeline. The first stage is close to completion - laying a gas pipeline to Zhigalovo. The costs of ESGK OJSC for the project have already amounted to about $160 million. The costs of Khimprom OJSC for design work and construction preparation are $7 million.

The implementation of the regional project ensures:

the formation of a new economic sector in the Irkutsk region;

in 2007-2011 direct investments - $1.5 - 1.8 billion.

creation of new jobs (operation period) - direct employment of more than 1 thousand jobs, employment in related industries - from 4 to 5 thousand jobs;

annual tax revenues since 2010 to the consolidated budget of the region - $35-45 million.

improving the environmental situation in the region.

new export opportunities, incl. increasing the volume of exports of chemical products to Asia-Pacific countries. The scheme of the regional project is presented in Appendix A (Table A.1), as well as the social benefits of implementing the regional project in Appendix A (Table A.2).

2.4 Feasibility of an investment project for the construction of a gas processing complex

We have developed a project for the construction of a gas processing complex.

The natural gas processing complex consists of 3 installations: natural gas processing, helium production, and ethylene production. The plant's ethylene capacity was set at 190,000 t/year. based on the needs and plans for the reconstruction of polyvinyl chloride production. Since the C2+ raw material released at the natural gas processing plant is not enough for the planned ethylene capacity, we also propose, as one of the options, to involve external raw materials in the production in an amount of about 7 tons/hour. In the project of a natural gas processing plant, you can use the licensed Cryomax technology, which is characterized by the fact that an ethane recovery rate of 95% is achieved with a minimum number of equipment at minimum energy and operating costs. The project does not provide for the possibility of autonomous operation of a natural gas processing plant; it can only work in conjunction with an ethylene plant. The design of an installation for the production of ethylene using the method of steam pyrolysis of ethane uses pyrolysis furnaces with vertical radian displacement coils of the SMK type and cassette ZIA at the outlet of each coil.

Gas separation is based on low-temperature rectification by sequential separation of the light component in distillation columns.

The project uses the world's best samples of zeolites and catalysts with promoters - unique equipment, including turboexpanders with magnetic bearings, turbocompressors with dry mechanical seals, aluminum plate multi-flow heat exchangers. In order to reduce equipment contamination (polymerization), as well as the water cycle and boiler equipment with pipelines will be treated with NALCO reagents. In general, the project was completed at a high level and corresponds to the best world complexes.

The estimate of capital costs for the design and construction of a gas processing complex according to the feasibility study of the project, carried out by us on the basis of the basic design, amounted to 520 million US dollars at January 2007 prices, including 402 million US dollars for the project.

The main reasons for the discrepancy in the assessment of capital costs for the design and construction of a gas processing complex:

The investment justification did not take into account some components necessary for the operation of the gas processing complex (Liquefied gas warehouse, Local treatment facilities, Auxiliary boilers, Sulfur-alkaline waste neutralization unit, Tar water combustion unit, etc.);

Increase in price due to increased equipment costs.

In order to reduce capital costs and obtain a firm price, a contract was concluded with Toyo Engineering Corporation (TPP, Japan) for the pre-basic design of a gas processing complex in Volgograd. Taking into account the new schedule for the supply of natural gas presented by JSC VSGC, the natural gas processing capacity was determined at 4 billion n.e. m3 per year. The feedstock for the ethylene plant in this project is ethane and propane.

The natural gas processing plant is designed using Coreflux-C2 technology. It is characterized by the fact that, with an ethane recovery rate of 95%, it has minimal energy and operating costs, due to the fact that the demethanizer reflux is formed not from recycle, but from part of the processed gas flow. The installation can operate autonomously; it includes a unit for separating the C2+ fraction into components: propane, C3/C4 fraction, butane, gasoline. It is possible to operate the demethanizer in diethanizer mode, as well as return ethane to the main gas pipeline.

All this makes the installation very flexible in terms of operating modes, and increases its viability in various emergency situations. The ethylene production plant was built under license from ABB Lumus.

The project uses components with the latest technology. So, to saturate the raw material with water vapor, a saturator, a column apparatus with a nozzle, is used, on which the raw material is saturated with water vapor. After the pyrolysis furnaces, the steam is condensed in a quenching column, and the resulting process water is purified in a DOX block supply unit. After cleaning, the process water again enters the saturator. The applied technology of a closed cycle of process water increases the efficiency of the installation, reduces harmful emissions of contaminated water, and reduces energy costs.

Pyrolysis furnaces are designed with vertical radiant coils using SRT-VI technology. In the decoking mode, combustion gases are burned in the furnace of the pyrolysis furnace, which reduces harmful emissions into the atmosphere. Gas separation uses a unique low-pressure demethanizer technology.

Gas separation is based on low-temperature rectification by sequential separation of the light component in distillation columns. The project uses the world's best samples of zeolites and catalysts with promoters, as well as unique equipment, including turboexpanders with magnetic bearings, turbocompressors with dry mechanical seals, and aluminum plate multi-flow heat exchangers. In order to reduce equipment contamination (polymerization), as well as the water cycle and boiler equipment with pipelines will be treated with NALCO reagents. The project as a whole was completed at a high level and complies with the best international standards.

The estimate of capital costs for the design and construction of a gas processing complex within the design boundaries of the TPP company amounted to 539.4 million US dollars at October 2007 prices, against 422.4 million US dollars.

The difference between capital investment estimates was $117 million. According to our proposal, the construction schedule for the gas processing complex is designed for 2 years. A feasibility study project prepared for passing the state examination, the regulatory period for which will be 14 months. The only correct solution for the construction of a gas processing complex from the point of view of reducing capital and operating costs and compliance with industrial safety rules is the construction and commissioning of a gas processing complex as part of all installations simultaneously, as provided for in the projects of engineering companies. Equipment for a gas processing complex must be selected in such a way as to ensure basic performance indicators

Installations, namely:

Reliability and safety of operation;

Environmental safety, ensuring minimal emissions of harmful substances into the atmosphere and water bodies;

Ensuring high technological guarantee indicators;

...

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Types of efficiency:
1) the effectiveness of the project as a whole;
2) effectiveness of participation in the project.

The effectiveness of the project as a whole is assessed to determine the possible attractiveness of the project for future participants and to find sources of financing.

It includes the public (socio-economic) and commercial effectiveness of the project.

Indicators of social efficiency are the socio-economic consequences of creating an investment project for the entire society (including both direct costs and results of the project) and “external”: costs and results in related sectors of the economy, social, environmental and other non-economic effects. In some cases, when these effects are very significant, the assessment of independent qualified experts can be used in the absence of documents. Indicators of the commercial effectiveness of a project take into account the financial consequences of its implementation for the participant who is implementing the investment project.

In general, project performance indicators from an economic point of view characterize technological, technical and organizational aspects.

The effectiveness of participation in a project lies in the interest of all its participants in it and the feasibility of the investment project.

The effectiveness of participation in the project should consist of:
1) the effectiveness of enterprises’ participation in the project;
2) the effectiveness of participation in the project of structures of a higher level than enterprises participating in the investment project;
3) the effectiveness of investing in shares of the enterprise;
4) budgetary efficiency of the investment project. Basic principles of efficiency:
1) review of the project throughout its entire life cycle until its termination;
2) correct distribution of cash flows, including all cash receipts and expenses associated with the implementation of the project for the billing period, taking into account the possibilities of using different currencies;
3) comparability of different projects;
4) the principle of positivity and maximum effect. From the investor’s point of view, in order for an investment project to be recognized as effective, it is necessary that the effect of the project’s implementation be “plus”; when comparing several investment project alternatives, preference should be given to the project with the greatest effect value;
5) taking into account the time factor. When assessing the effectiveness of a project, it is necessary to take into account various aspects of the time factor, as well as changes over time of the project and its economic environment; the time gap between the receipt of resources or production of products and their payment; inequality of costs or results at different times (earlier results and later costs are preferable);
6) accounting only for upcoming revenues and expenses. When calculating efficiency indicators, it is necessary to take into account only the revenues and costs planned during the implementation of the project, including costs that are associated with the attraction of previously formed production assets, as well as upcoming losses that are caused by the implementation of the project (for example, from the cessation of existing production in connection with the creation of place of the new one);
7) taking into account all the most significant consequences of the project. When assessing the effectiveness of an investment project, it is necessary to take into account all the consequences of its implementation. If their impact on performance can be quantified, it should be assessed in these cases. In other cases, this influence should be taken into account by experts;
8) taking into account the project participants, the conflict of their interests and different estimates of the cost of capital;
9) stage-by-stage assessment. At different stages of project development and implementation (selection of a financing scheme, investment justification, economic monitoring), its effectiveness is re-determined with varying depth of elaboration;
10) taking into account the impact on the effectiveness of the investment project of the need for working capital, which is necessary for the operation of production assets created at the stages of project implementation;
11) taking into account the impact of inflation (taking into account changes in resources and prices for various types of products during the project implementation) and the possibility of using several currencies when implementing the project;
12) taking into account (in quantitative form) the impact of risks and uncertainty accompanying the implementation of the project.

The amount of initial information depends on the design stage at which the effectiveness assessment is made.

Initial information should include:
1) the purpose of the project;
2) the nature of production, general information about the technology used, the type of products (works, services) produced;
3) information about the economic environment;
4) conditions for the beginning and completion of the project, the duration of the billing period.

Before assessing the effectiveness, the social significance of the project is determined by experts.

National economic, large-scale projects are considered socially significant.
At the initial stage, performance indicators of the project as a whole are calculated.

The purpose of the stage is to create the necessary conditions for searching for investors and an aggregated economic assessment of project solutions.

For local projects, only their commercial effectiveness is subject to assessment; if it is acceptable, it is recommended to proceed directly to the next stage of assessment.

If the conditions and sources of financing are already known, the commercial effectiveness of the project need not be assessed.

After the financing scheme has been developed, the second stage of assessment is carried out.

When assessing the effectiveness of investments for certain project participants, additional information is required about the functions and composition of these participants.

Information about the economic environment of the project should include:
1) a forecast assessment of the general inflation index and a forecast of relative or absolute changes in prices for certain resources and products (services) for the entire period of project implementation;
2) a forecast of changes in the currency exchange rate or the internal foreign currency inflation index for the entire duration of the project (for the previous and this points, it is desirable to formulate different forecast scenarios);
3) information about the taxation system.

Forecast prices are usually determined sequentially, based on the rate of price growth at each stage.

In some cases, the dynamics of forecast prices is determined based on the need to bring the structure of these prices closer to the structure of world prices.

Information about the tax system should contain, first of all, a more detailed list of taxes, excise taxes, fees, duties and other similar payments (hereinafter referred to as taxes).

Particular attention should be paid to taxes that are regulated by regional legislation (taxes of federal subjects and local taxes). For each type of tax, you must provide the following information:
1) tax base;
2) tax rate;
3) frequency of tax payments (payment deadlines);
4) about tax benefits (insofar as they relate to enterprises participating in the project). If the composition and amount of benefits are established by federal legislation, you can indicate the document by which they are determined. The benefits that have been introduced by the constituent entities of the federation and the local administration are described in full;
5) distribution of tax payments between budgets of different levels.

This information is provided separately for tax groups, and payments for them are reflected in the enterprise’s balance sheet differently. If information about a specific tax is established by federal legislation, you can only indicate the corresponding document. As a result, if for the corresponding type of production or region this tax is calculated in a different manner, it is necessary to provide an appropriate addition and change. Calculation of indicators of commercial efficiency of individual entrepreneurs is formed on the following principles:
1) current or forecast prices for material resources, products and services provided for by the project are used;
2) cash flows are calculated in the same currencies in which the project provides for the acquisition of resources and payment for products;
3) wages are included in operating costs in the amounts determined by the project (including deductions);
4) if the project involves both the consumption and production of some products (for example, the production and consumption of components or equipment), the calculation takes into account only the costs of its production, but not the costs of its acquisition;
5) the calculation takes into account deductions, taxes, fees, etc., provided for by law, in particular, VAT reimbursement for consumed resources, tax benefits established by law, etc.;
6) if the project provides for the full or partial binding of funds (purchase of securities, deposit, etc.), the investment of the corresponding amounts (in the form of outflow) is taken into account in cash flows from investment activities, and receipts (in the form of inflows) are taken into account in cash flows from operational activities;
7) if the project involves the simultaneous implementation of several types of operating activities, the costs for each of them are taken into account.

The following tables are recommended as output forms for calculating the commercial efficiency of a project:
1) profit and loss statement;
2) cash flows with the calculation of performance indicators.
To build a profit and loss statement, you must provide information about tax payments for each type of tax.

From the definition given in the World Bank guidelines, the amount of receipts is the amount of benefits received as a result of the project, and the amount of payments is the amount of costs for the implementation of the project.

In certain cases, other income from other types of activities may also be taken into account, for example, financial transactions for placing available funds on deposit with a bank. That is, these are the following payments:
1) investment costs, for example the cost of building a plant;
2) costs of production (bricks);
3) tax payments;
4) costs of servicing debt obligations, interest on loans.

Items of receipts and payments made by the bank in relation to the project:
1) proceeds from loans issued for the project in the form of interest;
2) amounts paid to the bank as debt repayment by the company implementing the project;
3) dividends from the implementation of the project (in the case of the bank acquiring a part in the project - a block of shares in the company implementing the project);
4) receipt of funds if the bank sells its part (shares) of the project. The following payments are implied:
a) costs of direct investment in the project (in case of acquisition of shares);
b) loans issued by the bank;
c) costs of servicing the bank’s debt obligations on borrowed funds (payment for resources);
d) the bank’s costs for supporting activities, overhead costs (as a result of assessing the entire set of bank projects).

It should be taken into account that the conditions for participation in the project of different investors may differ from each other, for example, the bank that provided the loan and the venture fund that purchased the stake.
Taking into account the effectiveness of each investor’s participation in the project, it is necessary to take an individual approach to the selection of items of payments and receipts used in the calculations, depending on the object of evaluation.