Created and modernized fixed assets

Securities

Intellectual rights

Targeted cash deposits

Scientific and technical products

Rice. 1 – Objects of investment activity in the Russian Federation

Investments can be classified according to various criteria (Appendix 1). The main feature of the classification is the object of investment, on the basis of which real (direct) and financial (portfolio) investments are distinguished.

Real (direct) investments – any investment of funds in real assets associated with the production of goods and services for profit. These are investments aimed at increasing the fixed assets of an enterprise for both production and non-production purposes. Real investment are implemented through new construction of fixed assets, expansion, technical re-equipment or reconstruction of existing enterprises.

Financial (portfolio) investments – acquisition of assets in the form of securities for profit. These are investments aimed at forming a portfolio of securities.

The next sign of investment classification is the investment period, on the basis of which short-term and long-term investments are distinguished.

Short-term investments – investments of funds for a period of up to one year. Typically, a firm's financial investments are short-term.

Long-term investments – investments of funds in the implementation of projects that will ensure that the company receives benefits for a period exceeding one year. The main form of long-term investment of a company is its capital investment in the reproduction of fixed assets.

Based on the nature of a firm’s participation in the investment process, direct and indirect investments are distinguished. In the case of direct investment, the direct participation of the investor company in the selection of capital investment objects is implied; these include capital investments, investments in the authorized funds of other companies, and in certain types of securities. Indirect investment involves the participation of an intermediary, investment fund or financial intermediary in the process of selecting an investment object. Most often this is an investment in securities.

Depending on the form of ownership of the invested funds, private and public investments are distinguished. Private investments characterize investments of individuals and business organizations of non-state forms of ownership. Public investments are investments of funds from state-owned enterprises, as well as funds from the state budget at its various levels and state extra-budgetary funds.

In addition, venture investments and annuities are distinguished separately. Venture investments – These are risky investments driven by the need to finance small investment firms in areas of new technology. These are investments in shares of new enterprises or enterprises operating in new areas of business and associated with a high level of risk. In the calculation of a quick return on investment, venture investments are directed into projects that are not related to each other, but have high degree risk.

Annuity – An investment that provides the investor with a specified income at regular intervals. These are mainly investments in insurance and pension funds. 2

Subjects of investment activity

The subjects of investment activity are investors, customers, performers of work, users of objects of investment activity, as well as suppliers, various business organizations - banking, insurance and intermediary. Subjects of investment activities can be individuals and legal entities (including foreign ones), as well as states and international organizations. Subjects of investment activity have the right to combine the functions of two or more subjects. Relations between subjects of investment activity are carried out on the basis of an agreement and (or) a government contract.

The main subject of investment activity is the investor who invests his own, borrowed and (or) attracted funds in the form of investments. Investors can be:

Individuals and legal entities;

Associations of legal entities created on the basis of an agreement on joint activities and not having the status of a legal entity;

Government agencies;

Local government bodies;

Foreign business entities.

Taking into account the focus of the main economic activities carried out by investors, they are distinguished into individual and institutional investors. Individual investor – This is an individual or legal entity that invests funds in the form of investments for the development of primary production and economic activities. Institutional investor – it is a financial intermediary that accumulates funds from individual investors and carries out investment activities. Institutional investors are investment companies and investment funds, usually specializing in transactions with securities.

Depending on the investment goals that investors set for themselves, strategic and portfolio investors are distinguished. Strategic investor When making investments, the goal is to acquire a controlling stake or a predominant share of the authorized capital of another enterprise in order to obtain the possibility of real management of this enterprise. Portfolio investor invests invested funds in a variety of investment objects in order to obtain current income or capital gains.

All investors have equal rights to:

Carrying out investment activities in any form;

Possession, use and disposal of investment objects;

Independent determination of volumes and directions of investments;

Attracting other subjects of investment activity on a contractual, mainly competitive, basis;

Monitoring the intended use of invested funds;

Pooling your own and borrowed funds with the funds of other investors to make joint investments.

The next subject of investment activity is customers. Customers can be investors, as well as individuals and legal entities authorized by investors who implement investment projects without interfering with the business and other activities of other investment entities, unless otherwise provided by an agreement between them.

Contractors are individuals and legal entities who perform work under a contract and (or) government contract concluded with customers. Contractors are required to have a license to carry out those types of activities that are subject to licensing in accordance with the legislation of the Russian Federation.

Users of investment activities can be investors, as well as other individuals and legal entities (including foreign ones), state bodies and local governments, foreign states, international associations and organizations for which objects of investment activity are created.

Subjects of investment activity operate in the investment sphere, where the practical implementation of financial investments is carried out. The investment sphere includes:

The sphere of capital construction, where investments are made in fixed assets for production and non-production purposes. This area unites the activities of customers-investors, contractors, designers, equipment suppliers and other subjects of investment activity;

The investment sphere in which scientific and technical products and intellectual potential are sold;

Scope of circulation financial capital: monetary, loan and financial obligations in various forms.

In accordance with the legislation of the Russian Federation, the state guarantees the protection of investments (including foreign ones), regardless of the form of ownership. At the same time, investors (including foreign ones) are provided with equal operating conditions, excluding the use of discriminatory measures that could interfere with the management and disposal of investments. Investments cannot be nationalized or requisitioned free of charge, and measures equal to those indicated in terms of consequences can also be applied to them. The application of such measures is possible only if the investor is compensated for all losses caused by the alienation of the invested property, including lost profits, and only on the basis of legislative acts of the Russian Federation and constituent entities of the Russian Federation. 3

Features of investment activity.

There are certain features of the investment activity of a business firm. Let's look at the main ones. First of all, it should be noted that the investment activity of a company is a major part of the overall economic development strategy of a business firm. The main tasks of a company's economic development require expanding the volume or updating the composition of its assets, which is achieved through various forms of investment activity.

A feature of investment activity is also the fact that the volume of investment activity of a company makes it possible to assess the pace of its economic development. The volume of a company's investment activity is characterized by two indicators: the amount of gross investments and the amount of net investments of the company.

Gross Investment – this is the total volume of investment funds in a certain period of the company’s activity, aimed at creating, expanding or updating production fixed assets, acquiring intangible assets, and increasing inventories.

Net investment – This is the amount of gross investment for a certain period, reduced by the amount of depreciation for the same period.

It is the dynamics of the amounts of net investment that determine the nature of the economic development of an entrepreneurial firm and the potential for the formation of its profit. When the amount of net investment is a positive value, i.e. the volume of gross investment exceeds the amount of depreciation charges, this means that the entrepreneurial firm ensures expanded reproduction of non-current assets and such a firm is called growing.

When the amount of net investment is zero, the entrepreneurial firm has no economic growth, since the firm's production potential, despite investment, remains unchanged. Such a company is “marking time.” If the amount of a company’s net investment is negative, then we can draw conclusions about a decrease in its production potential, i.e. the company “eats away” its capital.

A feature of the company’s investment activity is its cyclical nature, which is determined by a number of factors:

the need for preliminary accumulation or formation of investment resources;

the influence of the external business environment on the activity of investment activities in terms of creating a favorable or unfavorable climate for the implementation of these activities;

the gradual formation of internal conditions for the so-called “investment markets”.

In the process of investment activity of a business firm, costs are long-term in nature, as a result of which, as a rule, quite a lot of time passes between the stage of making expenses and the stage of receiving investment profit. The size of this period depends on the form of the investment process carried out by the company. There are three main forms of the investment process: sequential, parallel and interval. With the parallel flow of the investment process, the formation of investment profit usually begins even before the complete completion of the capital investment process. With the sequential flow of the investment process, investment profit is formed immediately after the end of the investment of funds. In the case of an interval investment process, there is a certain time interval between the period of completion of capital investment and the formation of the company’s investment profit.

The investment activity of business firms is accompanied by the possibility of the emergence of specific types of risks, which are called investment risks. As a rule, the level of investment risk exceeds the level of production risk. 4

Investment management.

Investment management includes:

Management of investment activities at the state level, which involves regulation, control, stimulation of investment activities by legislative and regulatory methods;

Management of individual investment projects, which includes planning, organization, coordination, control during the life cycle of an investment project through the use of a system modern methods and management techniques;

Management of investment activities of an individual economic entity - a business firm, which involves the selection of investment objects and control over the course of the investment process.

At the firm level, investment activity management is aimed at ensuring the implementation of the most effective forms of capital investment. Based on this, investment management includes several stages (Appendix 2).

The first stage of investment management at the enterprise level is an analysis of the country's investment climate. It includes studying the following forecasts:

Dynamics of gross domestic product, national income and industrial production volumes;

Dynamics of national income distribution (accumulation and consumption);

Development of privatization processes;

State legislative regulation of investment activities;

Development of individual investment markets, especially money and stock markets.

The next stage is the selection of specific areas of investment activity of the company, taking into account the strategy of its economic and financial development. At this stage, the company determines the industry focus of its investment activities, as well as the main forms of investment at individual stages of activity. To do this, the investment attractiveness of individual sectors of the economy is studied - their conditions, dynamics and prospects for demand for the products of these sectors.

The investment attractiveness of economic sectors is assessed during an industrial analysis consisting of three parts:

Determination of the industry life cycle stage;

Determining the industry's position in relation to the business cycle;

Qualitative analysis and forecasting of industry development prospects.

There are the following stages of the industry life cycle:

Pioneer stage, characterized by accelerated growth in sales and profits, high levels of risk and competition, the presence of new market participants and relatively low capital investment;

The expansion stage, the main features of which are an increase in sales volume without acceleration or with some slowdown, a cessation of price increases or a slight decrease in them, a sharp influx of investments and high costs of creation, acquisition of machinery, equipment, an increase in dividends paid;

Stabilization stage – the growth of sales and profits stops or slows down, product modernization ends, the assortment stabilizes, the growth of capital costs stops and their reduction is observed;

Decaying stage, characterized by a decrease in the number of companies involved in the industry, profits, sales and capital investments.

It is most favorable for an investor to invest capital in those industries that are in the stage of expansion, when there is the greatest increase in the market value of their shares and positive business prospects are clearly visible.

The assessment of the cyclical nature of the industry is based on a comparison of its development dynamics with general economic trends. On this basis they distinguish:

growing branches, the growth of which is obscured by the general economic recession, therefore they are identified by comparing general growth with industry growth;

protected industries, which are not affected by changes in the state of the economy as a whole (food production);

cyclical industries, in which fluctuations in prices and volumes occur in unison with general economic changes (production of electrical appliances);

countercyclical industries, primarily the extraction of mineral raw materials, especially gold and oil. The development of these industries often peaks during relatively short and shallow economic downturns. A deep depression can lead to a drop in production in any industry, including gold mining;

sensitive to changes in profitability. In industries in this group, fluctuations occur depending on changes in interest rates (for example, financial services).

This analysis allows us to anticipate rising interest rates and possible changes in the general economic situation.

The qualitative analysis carried out at the conclusion of industry studies clarifies the following issues:

historical aspect of the development of the industry in a given country and in the world;

competitive conditions - the presence of entry barriers in the industry, the relationship between existing competitors, the possibility of the emergence of analogue products;

production potential of producers and solvency of buyers;

legislative provisions in force in the industry.

Based on these materials, conclusions are drawn about the prospects of investing in enterprises in this industry.

The main indicator for assessing the investment attractiveness of industries is the level of profitability of the assets used, which is calculated in two ways:

profit from the sale of products (goods, services), related to the total amount of assets used;

gross profit divided by the total amount of assets used.

In addition to assessing the investment attractiveness of industries, in the process of investment management, the company also assesses the investment attractiveness of regions, since the products of firms in the same industry located in different regions have different attractiveness. The attractiveness of regions is determined by such factors as location, development of the transport network, characteristics of social conditions; development of business infrastructure; natural and climatic conditions; availability of resources, etc.

The assessment of the investment attractiveness of the regions of the Russian Federation is carried out according to various significant factors, and the region’s indicators are compared with the average indicators for the Russian Federation.

Based on the results obtained, the entrepreneurial firm makes a decision on the choice of specific directions and forms of investment.

The next stage is the selection of specific investment objects, which begins with an analysis of proposals for investment market. Then individual real investment projects are selected and financial instruments, corresponding to the main directions of investment activity and economic strategy of the company. All selected investment objects are analyzed from the perspective of their economic efficiency. Based on the results of this analysis, objects are ranked according to the criterion of their efficiency - profitability, and from this list those objects that provide the greatest efficiency are selected for sale.

The next stage is determining the liquidity of investments. In the process of carrying out investment activities, business firms must take into account that as a result of changes in the investment climate for individual investment objects, the expected profitability may decrease significantly. Therefore, it is necessary to carefully monitor all these changes and make timely decisions on exiting individual investment programs and reinvesting capital. Taking into account the possibility of such a situation, for each investment object, the degree of liquidity of investments should initially be assessed and preference should be given to those that have the highest potential level of liquidity.

An important stage of investment management is determining the required volume of investment resources and searching for sources of their formation. At this stage, the total need for investment resources necessary to carry out the investment activities of a business firm in the planned directions is predicted. Based on the need for investment resources, the sources of their formation are determined. If there is a lack of own financial resources, a decision is made to attract borrowed funds.

As a result of the implementation of all of these activities, an investment portfolio is formed, which is a set of investment programs carried out by the company.

The final stage of investment management is investment risk management. At this stage, it is necessary to first identify the risks that the company may encounter in the investment process for all investment objects, and then develop measures to minimize investment risks. 5

Sources of investment activities.

For firms, the sources of investment activities can be:

the investor’s own financial resources and on-farm reserves, which include down payments founders at the time of organization of the company and part of the funds received as a result of economic activities, i.e. at the expense of profits, depreciation charges, funds paid by insurance authorities in the form of compensation for losses from accidents, natural disasters, etc.;

borrowed financial resources of the investor, which include a bank loan, investment tax credit, budget loan and other funds;

attracted financial resources of the investor, funds received from the sale of shares, shares and other contributions of legal entities and employees of the company;

funds received through redistribution from centralized investment funds of concerns, associations and other associations of enterprises;

investment allocations from the state budgets of the Russian Federation, republics and other subjects of the Federation within the Russian Federation, local budgets and corresponding extra-budgetary funds. These funds are allocated mainly to finance federal, regional or sectoral target programs. Grant funding from these sources actually exceeds their own source of funds;

funds of foreign investors provided in the form of financial or other participation in the authorized capital of joint ventures, as well as in the form of direct investments in cash from international organizations and financial institutions, states, enterprises of various forms of ownership, and individuals. Attracting foreign investment ensures the development of international economic relations and the introduction of advanced scientific and technical achievements.

Depending on what sources of financing a company attracts to finance its investment activities, there are three main forms of investment financing:

self-financing;

credit financing;

equity or mixed financing.

Self-financing – this is the financing of investment activities entirely from one’s own financial resources generated from internal sources. This form of financing is usually used when implementing short-term investment projects with a low rate of return.

Credit financing It is used, as a rule, in the process of implementing short-term investment projects with a high rate of return on investment. The peculiarity of borrowed capital is that it must be returned under predetermined conditions, while the lender does not claim to participate in the income from the sale of investments.

Equity financing is a combination of several sources of financing. This is the most common form of financing investment activities; it can be used in the implementation of a variety of investment projects.

When choosing a source of financing for investment activities, the issue must be decided by the company taking into account many factors: the cost of attracted capital, the efficiency of return on it, the ratio of equity and borrowed capital, which determines the level of financial independence of the company, the risk arising when using a particular source of financing, as well as economic interests of investors. 6

The concept and essence of real investment

2.1 Forms of real investment

The basis of the investment activity of a business firm is real investment. In modern economic conditions, this form of investment for many companies is the only direction of investment activity. Real investments allow firms to develop new commodity markets and ensure a constant increase in its market value.

Depending on the objectives that the company sets for itself in the investment process, all possible real investments are reduced to the following main groups:

Mandatory investments (or investments to satisfy the requirements of government authorities) are investments that are necessary so that a business firm can continue to operate. This group includes investments whose purpose is to organize the environmental safety of the company’s activities or improve the working conditions of the company’s employees to a level that meets regulatory requirements, etc.;

investments in improving the efficiency of the company. Their goal is, first of all, to create conditions for reducing the company’s costs by updating equipment, improving the technologies used, and improving labor organization and management. The implementation of these investments is necessary for a business firm in order to withstand competition;

investments in production expansion. Their goal is to increase the volume of production of goods for previously formed markets within the framework of already existing production facilities;

investments in the creation of new production facilities. IN As a result of such investments, completely new enterprises are created that will produce goods that the company has not previously manufactured or provide a new type of service.

In general, real investments are made by entrepreneurial firms in specific forms; they are presented in Figure 2. 7

New construction

Acquisition of enterprises

Reconstruction

Forms of real investment

Technical re-equipment

Acquisition of intangible assets

Expansion of the company

Rice. 2 – Basic forms of real investment

The main areas of real investment are capital investments. In accordance with the Federal Law of the Russian Federation “On investment activities in the Russian Federation, carried out in the form of capital investments” No. 39-FZ of February 25, 1999, capital investments mean investments in fixed capital (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. Therefore, capital investments include investments that are made in the form of: new construction, expansion of a company, reconstruction, technical re-equipment and acquisition of existing enterprises.

New construction is usually understood as the construction of a new facility with a completed technological cycle according to a standard or individually developed project, which, after commissioning, will have the status of a legal entity. As a rule, a business firm resorts to new construction if it is necessary to increase the volume of production and economic activities or in order to diversify the company's core activities.

As a result of the expansion of the company, new production facilities are constructed in new areas in addition to existing ones or the expansion of individual production buildings and premises is carried out. Expansion is carried out if there is not enough existing production capacity to accommodate additional or new equipment.

Reconstruction is the carrying out of construction and installation work on existing sites without stopping the main production with partial replacement of equipment - obsolete and physically worn out. Reconstruction is usually carried out in order to increase the production potential of a business firm, significantly improve the quality of products, introduce resource-saving technologies, etc. Reconstruction can also be carried out in order to change the profile of a business firm and organize the production of new products on existing production facilities.

Technical re-equipment is an event aimed at replacing and modernizing equipment, while expanding production areas is not carried out. Most often, technical re-equipment is carried out through the introduction of new equipment and technologies, mechanization and automation of production processes, modernization and replacement of obsolete and physically worn-out equipment with new ones. Technical re-equipment is carried out in order to ensure an increase in labor productivity and the volume of output, improve the quality of products, as well as improve working conditions and organization.

This form of investment, such as the acquisition of enterprises, is carried out only by large business firms, as it requires a large amount of invested funds. This form of investment leads to an increase in the total value of the assets of both enterprises and gives them certain advantages over competitors, due to the complementarity of technologies and the range of products, due to the emergence of the opportunity to reduce costs by saving on large wholesale purchases of raw materials and materials, through the sharing of sales networks, etc.

The acquisition of intangible assets represents a long-term investment by a company through the acquisition of patents, licenses, trademarks, trademarks, other rights to use production information, rights to use land and natural resources, computer software products, intellectual property rights, etc. 8

In the process of functioning of an entrepreneurial company, the choice of a specific form of investment is determined by many factors:

firstly, the tasks of industry, product and regional diversification of the company’s activities;

secondly, the possibilities of introducing new technologies;

thirdly, the presence of own investment resources and (or) the possibility of using borrowed or attracted resources. 9

2.2. The main stages of real investment

The actual investment process involves a number of steps and stages. In international practice, it is customary to distinguish three main stages:

pre-investment stage, during which a specific investment project is selected and evaluated;

the investment stage, which is directly related to the implementation of a specific investment project;

post-investment stage – the stage of operation of the investment object.

The pre-investment stage forms the basis of the real investment process, since it is at this stage that alternative investment solutions are developed and the investment project is prepared. In turn, this stage includes four stages highlighted in the UNIDO directory (United Nations Industrial Development Organization, UNYDO - United Nations Industrial Development Organization):

stage of searching for an investment idea (concept);

stage of preliminary preparation of the investment project;

stage of assessing the technical, economic and financial attractiveness of the investment project;

stage of making the final decision on the investment project.

Indeed, in the process of making a real investment, it is initially necessary to determine the investment object. Then it is necessary to thoroughly study all aspects of the implementation of the investment idea and develop an investment project. Very often it is developed in the form of a business plan. If such an investment project can be developed and is of interest, the business firm is faced with the task of assessing its effectiveness. If the results of such an assessment turn out to be attractive for the company, the stage of making a final decision on the implementation of the investment project and determining the sources of its financing begins.

The advantage of such a staged implementation of real investment is that it does not require a large amount of one-time costs, but allows the company to gradually increase the amount of funds included in the preparation of the investment project. Each of the listed stages includes an assessment of the results obtained, on the basis of which the most promising investment ideas and projects are selected and further work is carried out only with these projects. Investment projects that are not of interest to a business firm are rejected already at the first stage, which saves significant funds that would otherwise need to be spent on assessing the effectiveness of these projects. Of course, significant expenditures of time and money occur precisely in the first three stages of the pre-investment period of real investment, so they will be considered in more detail. 10

Evgeny Smirnov

# Investments

The essence and forms of real investments

In Russia, the most popular areas of real investment are mining enterprises, oil refining and the food industry.

Article navigation

• Types of real investments, classification, example
• Forms of real investments and features of their management
• Risk management in real investing
• Investments in the real sector of the economy, assets and businesses
• Investment projects for a portfolio of real investments
• Leasing as a method of financing real investments
• Methods for assessing the effectiveness of real investments

A person who is far from the world of finance and business has a very vague idea of ​​what investment is. Usually by this concept people understand financial investments in the purchase of various securities, the Forex market or the purchase of real estate. But in addition to financial investments, there are also investments in the real sector or, as they are also called, real investments.

Financial investments are usually understood as investments of monetary capital in various financial instruments - stocks, bonds, commodity futures, etc. In essence, this is the purchase of speculative assets with the aim of their further resale at a more favorable price. What investments are called real?

Real investments are investments in the real sector of the economy, that is, in production and the service sector, in the creation of tangible and intangible assets. If we look at investments from the point of view of macroeconomics, then these are investments in the general improvement of the material well-being of society.

Thus, real investments are investments in maintaining the economic complex, as well as in its modernization and expansion. In this case, investments can be aimed at acquiring or creating both tangible and intangible assets (objects intellectual property- production licenses, artistic works, software, etc.).

Real investment is, in most cases, financing large, expensive projects. If, when making financial investments, you can buy securities in small quantities for literally a few thousand or even a few hundred dollars, in the real sector any investments almost always represent fairly large amounts.

For this reason, real investors are either wealthy individuals or legal entities with large capital. Only they are wealthy enough to provide financing for projects for the construction, modernization and expansion of production complexes of various sizes.

Types of real investments, classification, example

Real investments are more diverse than financial investments, since they are applicable to all types of economic commercial activities. And these are dozens of sectors of the economy and thousands of different types of activities, in each of which there may be several areas for investment.

In general, all types of real investments can be divided into two main groups:

1. Material investments. They represent investments in the creation or acquisition of material objects. The classification of this type of investment covers such types of costs as the purchase or creation of real estate, production and auxiliary equipment, utilities, transport infrastructure, etc.
2. Intangible investments. These are investments in the intangible sphere, which is important for conducting business activities. An example of this is investments in advertising that promote better sales of goods, the purchase of a license to use foreign technologies in production, the cost of personnel training, etc.

It is noteworthy that some categories of investments are formalized, as a rule, in the form of current production costs of the enterprise, rather than capital investments. This is due to the peculiarities of their financing through regular contributions rather than one-time costs. This happens with advertising, the use of other people's technologies (renting licenses) and software.

Real investments include the following investments:

• purchase of equipment;
• purchase land plots, including mineral deposits;
• purchase or construction of buildings and structures;
• investments in production modernization;
• expenses for structural reorganization of the enterprise;
• purchase or creation of trademarks, brands;
• purchase of patents and licenses;
• research funding;
• training and retraining of personnel.

The concept of real investment, with some stretch, also includes investments in the purchase of bonds or shares of an enterprise, if their resale to third parties is not provided, and the proceeds are used to expand or modernize production.

Real investments are in many ways more profitable than financial investments. Although they do not always provide more high level returns compared to financial ones, but less risky. Firstly, they are little exposed to short-term market fluctuations. Secondly, real investment objects have their own value, which allows them to be sold if necessary and thereby return most of the investment.

While financial investments allow the investor to make money solely on fluctuations in market conditions, real investments are focused on making a profit by producing additional tangible and intangible benefits.

Real investments are always closely related to specific production. If, when purchasing shares, an investor is only interested in the prospect of their rise in price, then when investing in the expansion or modernization of production, many additional factors become of great importance. All the problems of the production process become important to the investor, which ultimately affect the increase in production volumes and profit from the sale of products.

For these reasons, a person who wants to invest in investments and actually make money must be closely connected with the management of the enterprise. An investor needs to not only understand where exactly his money will go, but also be able to influence this process. Thus, a real investor almost always takes part in the management of the enterprise to one degree or another. He either initially owns or receives a block of voting shares in exchange for his investment.

Forms of real investments and features of their management

Investments in the real sector of the economy can be made in various ways. These methods represent separate forms of investments.

The most understandable and visual option is to purchase manufacturing enterprise. Although in principle a wealthy individual can purchase a small workshop, store or other business complex, in practice it is more common for one enterprise (or its tangible assets) to be acquired by another, larger enterprise.

An important aspect of this form of investment is that it is not individual property that is purchased, but an entire economic complex that is fully or partially ready to produce products or provide commercial services. This type of investment is well suited for experienced entrepreneurs, who can save time and effort by restoring the operation of a purchased business rather than starting their own from scratch.

Next, we should mention such a form of investment as the purchase of individual tangible assets - buildings, land, machines, transport, etc. It is resorted to in cases where it is not practical to purchase a ready-made economic complex. For example, a factory needs 100 new machines. Obviously, buying another factory just for this equipment is stupid. You just need to contact the manufacturer of this type of machine and buy the required number of machines.

Another popular form of real investment is the construction of new buildings, engineering facilities and communications, transport and industrial infrastructure. This form is in demand in cases where an enterprise needs new buildings, facilities and communications, but does not have the opportunity to purchase them. For example, an agricultural enterprise needs its own granary. And if there is no such facility in the area, in principle, then it is impossible to buy it. Similarly, you cannot buy a road between two production workshops on your own territory, you can only build it.

The main forms of real investment also include reconstruction and modernization. This is a special form of real investment, which to some extent is an alternative to enterprise expansion. In this case, the goal is not to increase the number of fixed assets, but to improve them or replace them with more advanced ones that are suitable for modern technical realities. Although increased production volumes are often a consequence of this type of investment, the main goal is still to reduce production costs by optimizing production processes and reducing the costs of raw materials, personnel and energy resources.

Constant modernization is the only type of real investment that no enterprise can do without. Even if we are talking about a small family cafe in a provincial town, where, in principle, there are no prospects for expanding the business, constant technical re-equipment is still necessary both in the kitchen and in the sales area.

Finally, there is such a form of investment as the purchase or creation of intangible assets. As mentioned above, this includes technical patents, trademarks, manufacturing licenses, software, and more.

Risk management in real investing

Analysis and risk management when making real investments is one of the main tasks of the investor. Although investments in the real economy are considered more reliable compared to the financial sector, risks still exist. This is an objective phenomenon that exists both at the industry level and at the level of an individual enterprise. Features of their management are a separate science.

When implementing any investment project, you need to take into account possible risks that investments will not be able to pay for themselves due to reasons arising at the macroeconomic and local level. For any investment project, an assessment of the degree of risk is made, taking into account its specifics, and possible methods and features of their management are also provided. The following types of risks are distinguished:

1. Risk of insolvency. This implies the possibility that during the implementation of the project the investor will run out of money and the project will be disrupted, and the investments already made will be lost.
2. Design risk. The danger of having significant errors in the business plan or technical design that could greatly affect the profitability or even the possibility of implementing the original project.
3. Execution risk. Unskilled performers can ruin all the original plans by doing the job poorly, taking too long, or increasing costs excessively.
4. Marketing risk. The possibility that consumer demand for the product for which the project is being created will be lower than expected.
5. Inflation risk. As a result of inflation, the costs of implementing the project will greatly increase, or the final real profit will be less than the real costs.
6. Tax risk. The possibility of new taxes appearing or existing ones being increased, which will cast doubt on the economic feasibility of the project.
7. Structural operational risk. During operation already completed project, ongoing operating expenses may increase for various reasons and reduce its profitability.

And these are just some of the most common problems that have to be taken into account when conducting risk analysis and management.

Various classification methods can be applied to investment objects. They are distinguished by the following characteristics:

• scale;
• project focus;
• the nature and content of the investment cycle;
• the nature of state participation in the project;
• investment efficiency.

The most typical objects to which real funds can be directed as part of an investment project are land plots, buildings, production equipment, utilities, etc. More specific objects for this type of investment include scientific and technical research, development of new improved types products and services, advertising, expansion of the sales network, company reorganization, personnel training.

Investments in the real sector of the economy, assets and businesses

The key feature of investing in a real business compared to investing in financial assets is the direct connection with the real sector of the economy. While speculation in securities is only remotely related to the actual production process, every penny of real investment directly affects the production of goods and services.

It is noteworthy that financial investor may not understand at all how the company whose shares he bought works. For him, only general things matter financial results activities of the enterprise, as well as the state and prospects of the sector of the economy in which it operates. For a real investor, absolutely all aspects are important, right down to the territorial localization of production workshops and the average age of employees.

Thus, to make real investments you need to be a real professional and expert in the industry in which you are investing. Or you need to hire such experts as consultants.

The investor also has to take into account that investments in real assets have extremely low liquidity. They are difficult (and often completely impossible) to convert back into financial resources, which almost eliminates the possibility of speculative disposal of them. For this reason, real investments are always made for the long term.

From a macroeconomic point of view, real investment is the only source of real economic growth. Speculation in securities can enrich specific individuals, but only investments in the real sector of the economy - in the construction of buildings, production of goods and services - can ensure a general increase in production volumes in the country.

Investment projects for a portfolio of real investments

A portfolio of real investments is a collection of several investment projects in the real sector of the economy, subordinated to certain tasks and goals. Theoretically, such a portfolio could be owned by a private investor who invests his capital in various enterprises in order to minimize risks while maintaining high rates of return on investments.

However, in practice, a portfolio of real investments is, as a rule, a set of investment projects implemented at a specific enterprise in order to increase production volumes, reduce production costs and expand the distribution network.

Any portfolio of real investments is characterized by extremely low liquidity. It often has zero value as a speculative asset and can only generate profit for the investor in the medium to long term. This is due to the fact that the only way to make a profit from these investments is the production and sale of products (services) of the enterprise in which the funds were invested.

A portfolio of real investments is very difficult to manage and is directly related to the management of the enterprise itself. For this reason, the real investor is often either the owner of the company (individual or other legal entity) or the company itself.

Within one enterprise, a portfolio of real investments is formed from investment projects based on the general development strategy of a given business entity. Accordingly, profiting from these investments is directly tied to increasing production volumes, reducing costs and expanding the customer base.

As an example of such an investment portfolio, let’s take a small agricultural enterprise that is on the verge of large-scale expansion. The owners and management decide to implement several projects at once:

• purchase new tractors;
• acquire additional land plots for new agricultural crops;
• build a livestock complex;
• hire and train additional staff.

Each item on this list is a real investment project that can be financed both from the operating profit of the enterprise, and from funds raised from outside through the mechanism of issuing shares and bonds, or from credit funds. Well, all these projects together are combined into a single portfolio, which at the same time is the overall development strategy of this company.

Leasing as a method of financing real investments

Leasing as a method of financing long-term investment projects is an excellent alternative tool for raising funds. In a stagnant economy with high inflation and high stakes for bank loans, leasing allows you to successfully implement expensive investment projects with a long payback period. How it works?

Inflation can eat up all the profits from long-term investments, so an outside investor is not interested in a real investment project designed for a long term. If the enterprise does not have enough of its own working capital for such a project, he only has a bank loan. But due to high interest rates, investments in real assets may turn out to be unprofitable.

The solution to this situation is leasing. A third-party investor purchases the relevant property (for example, industrial machines) and leases them to the industrial enterprise. As a result, the investor receives a rental profit that covers the level of inflation, and at the same time remains the owner of the property, which can be sold after the lease agreement expires.

In turn, the enterprise receives for use the property it needs, the rent of which is covered from the profit generated by this property. Moreover, the cost of rent is lower than payments on a bank loan.

Another important point should also be noted regarding this source investment financing. A bank loan can only be taken out from a bank in the country in which the enterprise is located. The law prohibits direct lending from foreign banks with lower interest rates. But a leasing agreement can be concluded with non-residents, that is, you can rent property from companies and individuals registered in another country.

By the way, the decisive prerequisite for the influx of real foreign investment is just the high cost bank loans in our country. Foreign investors are willing to participate in leasing schemes, which are quite safe and at the same time provide all parties with excellent conditions for making a profit.

Methods for assessing the effectiveness of real investments

The criteria that justify the feasibility of real investments are divided into two main categories - profitability assessment and risk assessment.

When assessing the expected return on real investments, the main method of analysis is the development of a feasibility study (feasibility study). This is a document that reflects rough aggregated calculations of all key production indicators, as well as costs and revenue.

An important element in calculating the effectiveness of investments is drawing up a business plan. Moreover, at each stage of the project implementation such a plan is drawn up anew. That is, first a preliminary business plan is developed, then a current plan during the implementation of the project and a final plan at the start of operation of an already implemented project.

Key methods for assessing the effectiveness of investments in terms of profitability are based on calculating the following indicators:

• profitability index;
• payback period;
• net present value;
• internal rate of return on investments.

Having compared different projects according to these indicators, the investor chooses the most suitable and profitable one to implement first.

As for risk assessment when implementing real investment projects, this also occurs through a comparison of the main profitability indicators. To do this, select indicators of production, financing and product sales within the project, and model their changes in order to assess the sensitivity and vulnerability of the project to such changes.

From a risk perspective, analyzing the effectiveness of investments comes down to drawing up three business plans:

• pessimistic;
• optimistic;
• average or realistic.

The smaller the fluctuations in the main indicators between these three scenarios, the more stable and less risky the investment project is.

Investments are key at both micro and macro levels. These funds act as one of the main factors of economic development. Investment flows determine the future of the state, its individual subjects, and each enterprise.

Main functions

Investment is an exchange of a certain current value for a possible uncertain future value. In the field of training economists, the study of this phenomenon is one of the most important stages. Considering the role of investments in a broad sense, it should be noted that they provide economic development and financing for the growth of the country’s economic sphere. The intensity of these processes largely depends on how quickly financial resources will be mobilized to meet the increasing needs of the state itself and the companies operating within its borders, as well as individuals. Thus, investment activity and economic growth are interdependent phenomena.

Strategy

One of the key conditions for sustainable economic growth is the activation of the state’s investment policy. This strategy involves a system of measures that determines the structure, volume and directions of capital investments, an increase in fixed assets, as well as their renewal in accordance with the latest achievements of technology and science. Investment policy regulates and stimulates the financing process, creates conditions for the sustainable development of the socio-economic sector of the country, region, a certain industry, and entrepreneurship in general. The most important areas provided for in the strategy include:

Legal aspect

The most important condition for intensifying investment is the improvement of the mechanism of its legal regulation. The main laws in this area are Federal Law No. 39 and Federal Law No. 160. The first regulates investment activities on the territory of the Russian Federation, carried out in the form of capital investments, the second provides the conditions for distribution foreign funds. The legal foundations are also laid down in the Civil Code.

Real investment

These funds are impossible without financial investments. The latter, in turn, receive their logical conclusion when the former are implemented. Currently, real investments are being made:

1. In fixed capital.
2. Into intangible assets.

Classification

Depending on the purposes of financing, the following types of real investments are distinguished:

Specifics

Any form of real investment is typically long-term, large-scale financing. Investment of assets in equipment and land, construction of new structures or buildings has a fairly long payback period. But no production will exist without real investment. In order to attract funds, in addition to the company’s own proposal, their need should be justified and technical and economic calculations should be submitted. The effectiveness of real investments is ensured through constant monitoring of the developed financial project. This process is key to the effectiveness of the company's strategy. During monitoring, the effectiveness of real investments is assessed and the achieved results are compared with the planned ones. Depending on the results, the project is adjusted.

Implementation Features

Real investments act as the main tool for implementing the developed company development strategy. The main goal of this process is achieved through the implementation of effective financial projects. At the same time, strategic development itself is directly a complex of implemented plans. An analysis of real investments shows that it is precisely this type of investment that ensures the company’s successful entry into new regional and product markets and a constant increase in its value. This method of financing is closely related to the operating activities of the company.

Solving the problems of increasing production and sales volume, expanding the range of products, improving their quality, and reducing current costs allows competent management of real investments. At the same time, the indicators of the upcoming operational process, as well as the potential for expanding activities, will largely depend on the financial projects implemented by the company. Real investments lead to higher levels of profitability.

The ability to generate a significant rate of profit acts as one of the incentives to continue entrepreneurial activity. Realized investments provide the company with a steady flow of net cash. It is formed from intangible assets and depreciation charges from fixed assets even when the operation of projects does not generate income. The assets under consideration are distinguished by a high level of anti-inflation protection. As practice shows, in conditions of inflation, the intensity of price growth for real investment objects not only corresponds to, but often exceeds its rate.

Negative traits

An assessment of real investments shows a high risk of obsolescence. It accompanies activities both at the stage of project implementation and at the stage of their subsequent operation. The intensive technological process has created a tendency to increase the level of this risk during actual investment. Invested assets have the lowest liquidity. This is due to the narrow target orientation of most investment forms. Being unfinished, they have practically no alternative use on the farm. In this regard, it is very problematic to compensate for mismanagement of real investments.

Acquisition of property complexes

This is one of the areas in which real investments are made. The acquisition of property (entire) complexes is an operation large companies, through which regional, product or sectoral diversification of activities is ensured. The result of this form of investment, as a rule, is the “synergy effect”. It consists of increasing the total price of the assets of both companies (relative to their book value) due to the ability to more effectively use the overall financial potential and reduce operating costs, mutual complementation of the range and technology of manufactured products, joint use of the sales network in different regional trading platforms and other similar factors.

Construction

This investment operation is associated with the construction of new facilities with completed technological cycles according to a standard or individual project in specially designated areas. The company resorts to new construction in the event of a dramatic increase in the volume of its operating activities in the future period, its regional, industry or product diversification (formation of subsidiaries, branches, and so on).

Reconstruction

This form of investment involves a significant transformation of the entire production process based on modern scientific and technological advances. The reconstruction is carried out according to a comprehensive plan to radically increase the production potential of the company, introduce resource-saving advanced technologies, significantly improve the quality of manufactured products, and so on. During this process, individual buildings and premises may be expanded (if new equipment cannot be installed in existing ones), structures and buildings of the same purpose may be constructed on the site of those liquidated on the company’s territory, the operation of which is not practical in the future for economic and technological reasons.

Modernization

An investment operation of this type is associated with improving and bringing the operating part of the main production assets to a state that corresponds to the modern level of technological processes. This is achieved through constructive changes to the main set of equipment, machines and mechanisms that are used by the company in the course of operating activities. Repurposing is considered a derivative process from modernization. During this investment operation, a complete change in production technologies is carried out to produce new products.

Updating individual equipment

This form of investment concerns the replacement (due to physical wear and tear) or addition (due to an increase in volumes and the need to increase labor productivity) of the existing set of machines with individual new types that do not change the general scheme of the process. Renewal characterizes mainly the simple reproduction of the active part of fixed assets.

Problem of choice

The investment forms listed above can be reduced to three main areas:

1. Innovative investing.
2. Investment in the growth of current assets.

The choice of a specific option is determined by the objectives of product, industry or regional diversification of the company’s activities aimed at increasing the volume of operating profit, the possibilities of introducing labor-saving technologies and new resources that reduce costs, the potential that sources of real investment have (capital in monetary and other terms that is attracted to make investments).

Long-term security

Such investments are made for a period of 3 or more years. Effective regulation of the company's activities ensures its successful development in a competitive environment. This directly relates to the complex process of long-term investing. Quick and correct implementation of activities in this area allows the company not only not to lose its main advantages in the competitive struggle to retain the market for the sale of its products, but also to improve existing production technologies. This, in turn, contributes to further efficient operation and increased profits.

All main regulatory functions are carried out within the framework of the developed strategic plan, which ensures the implementation of the main concept. Distribution of resources, coordination of the work of different departments, organization of structure, relations with the market allow the company to achieve its goals, making optimal use of available funds. Developing a long-term investment strategy is quite difficult process. This is due to the impact of many external and internal factors on the financial and economic position of the company.

Recently, models that help assess the investment prospects of enterprises have become increasingly popular. The main tasks in this area are the selection of solution options, forecasting priority targets and identifying reserves for increasing the profitability of the company as a whole. The use of various types of matrices, the formation and analysis of models of initial system factors, is quite popular. Each specific situation will determine one or another line of behavior for long-term investments.

The main and most popular type of investment for legal entities is considered to be investing in securities, bank deposits, as well as the currencies of other countries with a strong stable exchange rate. Investing in foreign exchange market assets does not involve the investment of time, but it is worth noting that such investments are subject to a high level of risks.

Bank deposits, on the contrary, are considered the most reliable types of deposits with a clearly established rate, but receiving dividends requires a lot of time.

Legal entities also often invest their capital in leasing, as well as in providing credit services to third parties.

Classification of investment deposits

According to the timing of the investment process, there are:

• Short-term – investments for a period of up to one year, or investments that provide for profit in a year;
• Long-term – investments for a period of one year or more, or investments that provide for profit for more than one year.

According to the purposes of investing investment funds, there are

• Strategic – investing funds in the capital of third legal entities in order to consolidate their position in the market;
• Portfolio – used to eliminate the adverse effects of inflation and receive dividends.

In addition, there is a special type of alternative investment activity, which involves investing money in assets with a specifically established price in the market, which may increase over time.

Types of investing in securities

Financial investments in the securities market are less accessible, in contrast to bank deposits, but can bring greater profits for the investor.

It is worth highlighting the following types of financial investment in the securities market:

• Direct deposits, which involve investing money in equity securities that provide the right to participate in the capital of an organization;
• Portfolio, which involves investing capital in debt securities such as bills or bonds.

Also, according to the type of securities in which investment is made, a distinction is made between government and corporate securities and securities. It is also possible to distinguish between collective and individual investments by legal entities in the securities market. Individual investment involves the contribution of capital to the Central Bank, which is issued by some state or organization.

Real investment is the investment of capital in material production (in construction, industry, Agriculture etc.), as well as the acquisition of intangible assets (copyrights, patents) with their subsequent use for material production.

Real investments are classified into the following types:

1. Renewal investments carried out at the expense of the organization's funds.
2. Expansion investments made from income or stock savings.
3. Gross investment, which is the sum of expansion and renovation investments.

Characteristics of real investments

To characterize this type of investment, the following characteristics are used:

1. Investment size. This characteristic is the value expression of invested capital.
2. The investment rate is the ratio of real investment to GDP.
3. Capital intensity increase ratio. This indicator characterizes the efficiency of savings and is defined as gross real investment in fixed assets in relation to the increase in GNP for the same period.
4. Savings is the use of part of income to expand reproduction.

Principles of real investment

1. Compared to growth national currency, real investment increases faster.
2. Regarding financial ones, the risk of real investments is less, and the return is greater.
3. Real investments enable the organization to develop intensively, increase product quality, and explore new markets.
4. Real investment provides enterprises with a constant cash flow, achieved through depreciation charges on fixed capital, which are received even if the implementation of investment projects does not bring profit.
5. As a result of rapid technological progress, real investments may be subject to obsolescence.
6. Real investments have very low liquidity.

Forms of real investments

1. Acquisition of entire property complexes. Usually such investment operations are carried out large enterprises, thus providing regional, sectoral or product diversification.
2. Construction of a facility with a completed technological cycle. Such real investments are made with a significant increase in production volumes and with the formation of branches or subsidiaries.
3. The reconstruction is carried out to radically transform production on the basis of the latest scientific and technical achievements.
4. Modernization implies the improvement of existing assets of a given production.
5. Real investments in intangible assets are usually aimed at applying new scientific and technological knowledge in the production.
6. Investing to increase reserves of tangible current assets.

Real investments in working and fixed capital

The most common is investing in fixed capital. This form of investment includes capital investment in land plots, buildings, machines, and other means of production. In this case, it is worth allocating funds for production and construction purposes. Production assets include vehicles, machinery, equipment and work equipment with a service life of at least a year. Construction funds include construction mechanisms and machinery, vehicles and power equipment.

Investing in working capital involves investing funds in stocks of raw materials, structures, fuel, etc.

Real investments can be made by legal entities and individuals.

Legislation limits the participation of individuals in real investments and can be done in the following way:

1. Purchase of real estate and its further rental.
2. Purchase of equipment and subsequent rental.
3. Registration of intellectual property.
4. Formation of your own company.

As for the participation of legal entities in real investment, then, probably, any organization needs to engage in investments in order to expand and modernize its technical base.

Assessing the effectiveness of real investments(real investment effectiveness estimate) - a system of principles and indicators that determine the effectiveness of the choice for the implementation of individual real investment projects.

The main principles for carrying out such an assessment in modern practice are:

1. Assessment of the effect of investments based on net cash flow. At the same time, during the assessment process (depending on its goals), the net cash flow indicator can be taken differentiated by individual years of the upcoming operation of the investment project or as an annual average.
2. Mandatory reduction to the present value of both the volume of invested capital and the amount of net cash flow. The volume of invested capital is reduced to the present value if the process of investing in a real project is carried out in several stages in accordance with the developed business plan.
3. The choice of a differentiated discount rate in the process of bringing the amount of invested capital and net cash flow to the present value for various real investment projects. Individual investment projects differ in both the level of risk and their level of liquidity. Therefore, the discount rate, along with the average market interest rate, should take into account, if necessary, the size of the “risk premium” and the “liquidity premium” for a specific real investment project.

Taking into account the stated principles, the following main indicators are used in the process of efficiency of real investments:

1. Net present value(net present value; NPV). This indicator allows you to obtain the most generalized characteristic of the investment result, i.e. its final effect in absolute terms. Net present value is understood as the difference between the amount of net cash flow reduced to present value (by discounting) for the period of operation of the investment project and the amount of capital invested in its implementation.

This indicator is calculated using the formula:

NPV = NPV - IR

Where NPV- the amount of net present value income for a real investment project;
NPV- the amount of net cash flow (reduced to present value) for the entire period of operation of the investment project (before the start of new investments in its reconstruction or modernization). If the full period of operation before the start of a new investment in a given object is difficult to determine, it is taken in calculations at the rate of 5 years;
IR- the amount of capital invested in the implementation of a real project (in case of different investments, reduced to the present value).

An investment project for which the net present value indicator is negative or equal to zero should be rejected, since it will not bring the enterprise additional income on invested capital. Investment projects with a positive net present value indicator allow you to increase the capital of the enterprise and its market value.

2. Investment return index(profitability index; PI). It allows you to correlate the amount of invested capital with the upcoming amount of net cash flow for the project. This indicator is calculated using the following formula:

Where IDI- index of return on investment for the project;
NPV- the amount of net cash flow (reduced to present value) for the entire period of operation of the investment project;
IR- the amount of capital invested in the implementation of the investment project (in case of different investments, reduced to the present value).

If the value of the investment return index is less than one or equal to it, the investment project should be rejected due to the fact that it will not bring additional income to the enterprise. In other words, investment projects can only be accepted for implementation with an investment return index value above one.

3. Payback period(payback period; PP). It is one of the most common and understandable indicators for assessing the effectiveness of a real investment project, as it allows one to judge how quickly the funds invested in its implementation will be returned. This indicator is calculated using the following formula:

Where BY- payback period of invested capital for a real project (in the number of months or years);
IR- the amount of capital invested in the implementation of the investment project (in case of different investments, reduced to the present value);
NDP p- the average amount of net cash flow (reduced to present value) in the period (for short-term investments this period is taken as one month, and for long-term investments - one year).

If billing period If the investor is satisfied with the payback, then the real project can be accepted for implementation. The disadvantage of this indicator is that it does not take into account those amounts of net cash flow that are formed after the payback period of investments. Thus, for investment projects with a long operating life, after their payback period, a much larger amount of net present value income can be obtained than for investment projects with a short operating period (with a similar or even faster payback period).

4. Internal rate of return(internal rate of return; IRR). This indicator is considered one of the most important in the system for assessing the effectiveness of real investment projects. It characterizes the level of profitability of a specific investment project, expressed by a discount rate at which the future value of the net cash flow from investments is reduced to the present value of the invested funds.

The internal rate of return can be characterized as a discount rate at which the net present value will be reduced to zero through the discounting process. This indicator is calculated using the formula:

Where VSD- internal rate of return for a real investment project (expressed as a decimal fraction);
NPV- the amount of net cash flow reduced to present value;
IR- sum invested capital in the implementation of an investment project (in case of different investments, reduced to the present value);
n- number of discount periods.

The value of the IRR indicator can be determined using special tables for financial calculations.

The internal rate of return indicator is most suitable for comparative assessment not only within the framework of the investment projects under consideration, but also in a wider range, for example, in comparisons with the level of return on assets, the level of profitability equity, the level of income for alternative investment (if the internal rate of return exceeds the market interest rate, the investment project is considered effective). An enterprise may set the “marginal internal rate of return” indicator as a standard, and investment projects with a lower value will be automatically rejected as not meeting the requirements for the efficiency of real investment.

Investments in real business - the era of startups.

Today, almost everyone knows a couple of examples when investments in real businesses made people millionaires in a fairly short period of time. The thing is that most businesses of the late 20th and early 21st centuries lie in the information space, which closely borders the area of ​​high technology. Initial cost and financial expenses entrepreneurship on initial stage may be millions of times less than the potential it receives at a certain stage of development.

So that all this does not seem like some kind of complex and confusing process to you, let's look at a simple example. Social network Facebook. The largest social network in the world. Those people whose capital was at the origins of the formation of this company are now millionaires. The founder himself, Mark Zuckerberg, is generally one of the richest people on the planet. A logical question arises.

Would you invest at the infancy stage of this big business at least $1000 to become a dollar millionaire in a few years? Of course yes!

This is exactly the kind of investing we do. Our projects may be of a smaller scale now, but today there are already a couple of brands from the development of which we have earned good money.

What should be the investment in a real business:

• Promising. Before choosing any investment object from a business area, we carefully study all the documentation, business plans, calculations and prospects for this project. And we are not talking about how likely the success of the business is, we are talking about the coefficient by which we can increase our capital.
• Scalable. Depositing $1000 to receive the same $1000 every year may not be bad for some. Still, after all, this is 100% per annum. But we believe that if you risk your capital, then understand that all transactions will have the maximum return. By following this rule, you can make many times more profit.

If you understand how much potential this type of investment has, and how enormous a profit you can get here, be sure to contact our contact center. Our specialist will tell you about current business investment opportunities.

NON-GOVERNMENTAL EDUCATIONAL INSTITUTION

HIGHER PROFESSIONAL EDUCATION

HUMANITIES AND PROGNOSTICS INSTITUTE

Faculty of "Financial Management"

Course work

Investments. Principles for carrying out investment activities

Completed by: Grigoriev Sergey

Course 4 DFM Group 05

Checked: ________________

Moscow 2009

Introduction. 3

1. The concept of investment. 5

2. Classification and structure of investments. 6

3. Principles of investment activity. 10

4. Investment financing. 16

The price of advanced capital and the factors that determine it. 32

Conclusion. 36

References.. 37

Introduction

The modern understanding and fundamental importance of investments and the investment process, which have existed at all times and among all peoples, for the economy develops and increases with the development of the market. After the formation of national and international markets, investments and the investment process acquire enduring importance for the national and global economy. In other words, the basis of the modern market economy of all countries and the world economy as a whole is made up of relations associated with investing in the production of material and spiritual values.

From a legal point of view, the foreign investment policy of the state is the creation of a favorable legal climate for foreign investment, which involves the use of national legal regulation, national legal forms and norms (laws and other regulations), as well as, accordingly, international legal regulation, international legal forms and norms (bilateral and multilateral treaties and agreements).

The purpose of this work is to define investments and investment activities.

To achieve this goal, the coursework addresses the following issues:

give the concept of investment;

consider the classification and structure of investments;

consider the principles of investment activity;

also consider investment financing.

The investment activity of an enterprise is an important integral part of its overall economic activity. The importance of investments in the economy of an enterprise can hardly be overestimated. Modern production is characterized by constantly growing capital intensity and the increasing role of long-term factors. In order for an enterprise to operate successfully, improve product quality, reduce costs, expand production capacity, increase the competitiveness of its products and strengthen its position in the market, it must invest capital, and invest it profitably. Therefore, he needs to carefully develop an investment strategy and constantly improve it to achieve the above goals.

1. Concept of investment

In its most general form, investments are defined as cash, bank deposits, shares, shares and other securities, technologies, machines, equipment, licenses, including trademarks, loans, any other property or property rights, intellectual values ​​invested in business or other activities for the purpose of making a profit ( income) and achieving a positive social effect.

By financial definition, investments are all types of assets (funds) invested in economic activity for the purpose of generating income.

The economic definition of investment is interpreted as expenses for the creation, expansion, reconstruction and technical re-equipment of fixed capital, as well as related changes in working capital. After all, changes in inventories are largely explained by movements in expenditures on fixed capital.

Investments in a market economy as a process of investing funds in any form are inextricably linked with obtaining income or some effect. Investment is a resource, by spending which you can get the intended result. Thus, the essence of investment contains a combination of two sides of investment activity: resource costs and results. If resource costs, i.e. investments do not lead to the desired result, then they become useless.

Investment is the use of financial resources in the form of short-term or long-term capital investments. Investments are made by legal or individuals. By type of investment, they are divided into risk (venture), direct, portfolio and annuity.

Venture capital is an investment in the form of new equity issues made in new areas of activity associated with greater risk. Venture capital is invested in unrelated projects with the expectation of a quick return on investment. It combines various forms of capital: loan, equity, entrepreneurial.

Direct investment is an investment in the authorized capital of a business entity with the aim of generating income and obtaining rights to participate in the management of this entity.

Portfolio investments are associated with the formation of a portfolio (a set of different investment values) and represent the acquisition of securities and other assets. Annuities are investments that bring the investor a certain income at regular intervals, representing investments in insurance and pension funds.

2. Classification and structure of investments

To account for, analyze, plan and improve the efficiency of investments, their scientifically based classification is necessary at both the macro and micro levels. Such a classification of investments allows not only to correctly take them into account, but also to analyze the level of their use from all sides and, on this basis, obtain objective information for the development and implementation of an effective investment policy at both the macro and micro levels.

During the time of the planned economy, the classification of capital investments according to the following criteria became most widespread in the domestic scientific literature and in practice.

Based on the intended purpose of future facilities:

For industrial construction;

For the construction of cultural and community institutions;

For the construction of administrative buildings;

For survey and geological exploration work.

By forms of reproduction of fixed assets:

For new construction;

For the expansion and reconstruction of existing enterprises;

For equipment modernization;

For major repairs.

By sources of financing - centralized and decentralized.

By direction of use - production and non-production.

With the transition to market relations, these classifications have not lost their scientific and practical significance, but they have become clearly insufficient for the following reasons.

Firstly, as already noted, investment is a broader concept than capital investment. As is known, they include both capital (real) investments and portfolio ones. This classification does not take into account portfolio investments at all.

Secondly, with the transition to market relations, the methods and methods of financing both capital investments and investments in general, as well as the scope of their application, have expanded significantly. All this does not find a place and is not reflected in the above classification.

Depending on the objects of investment, real and financial investments are distinguished.

Based on the nature of participation in investment, direct and indirect investments are distinguished.

Direct investment is understood as the direct participation of the investor in the selection of investment objects and investments.

Direct investment is carried out mainly by trained investors who have fairly accurate information about the investment object and are well acquainted with the investment mechanism.

Under indirect investments means investment mediated by other persons (investment or other financial intermediaries).

Based on the investment period, short-term and long-term investments are distinguished.

Short-term investments are usually understood as investments of capital for a period of no more than one year, and long-term investments are investments of funds for a period of more than one year.

According to the form of ownership of the investor, private, state, foreign and joint investments are distinguished.

Private investments are investments made by citizens, as well as enterprises of non-state forms of ownership, primarily collective ones.

Public investments are carried out by central and local authorities and management at the expense of budgets, extra-budgetary funds and borrowed funds.

Foreign investment is investment made by foreign citizens, legal entities and states.

Joint investments are investments made by entities of a given country and foreign countries.

Investments within the country and abroad are distinguished on a regional basis.

Investments within a country mean investments in investment objects located within the territorial borders of a given country.

Investments abroad mean funds invested in investment objects located outside the territorial borders of a given country.

The efficiency of using investments largely depends on their structure.

It is necessary to distinguish:

General investment structure;

The structure of real investments;

Structure of capital investments;

The structure of portfolio (financial) investments.

The general structure of investments refers to the relationship between real and portfolio (financial) investments.