Evaluation of investment projects. Risk assessment of the investment project. Criteria for the evaluation of investment projects

Successful business development often requires an entrepreneur to attract investment. To do this he can, using a variety of tools. But in many cases, the investor's decision on whether or not to invest in a particular business will be based on conducting an independent analysis, evaluating the prospects of a particular project. What criteria can be involved in this?

Simplicity and complexity

Evaluation of investment projects, as many experts believe, on the one hand, is related to the multifactoriness of researching a business idea. At the same time, not only the properties of the concept itself but also external factors, such as the state of the market, political processes, etc., can be taken into account. The attractiveness of the investment project can be analyzed from the point of view of the entrepreneur's personality, the level of elaboration of the financial plan. On the other hand, the whole essence of the corresponding research is, as a rule, reduced to an answer to a set of the simplest questions: will the project be profitable, to what extent, and when to expect revenues?

Universal criteria that would make it possible to determine unambiguously which of the factors of analysis most clearly affect the future profitability of the business initiative, even in the environment of professional investors has not yet been invented. However, the toolkit, through which qualitative assessment and analysis of investment projects can be carried out, is available in a wide range of specific solutions. What are the criteria by which modern investors evaluate the prospects of business ideas?

Key Criteria

First of all, these are indicators that reflect the economic efficiency of investments. In the "formula" applicable to the calculation of specific figures for this criterion, there are two basic "variables" - the actual investment, as well as the annual profit (sometimes expressed in profitability, that is, in percentage terms). In some cases, the criteria for evaluating investment projects in this "formula" are supplemented by such an aspect as the payback period. That is, if we talk, for example, about the first year of doing business, then the depositor may want to know how many months the project will at least go to zero. In general, we can say that the methodology for assessing investment projects is tied to the time factor. The totality of the most important criteria from the economic point of view is correlated with the specific periods.

If we consider the criteria for evaluating investment projects that are more closely related to time, we can single out the following list:

• Net present value;
• Internal and modified rates of return;
• The average rate, as well as the profitability index.

What is the advantage of these criteria? In almost all cases, the investor receives a certain rational digital indicator, which can allow several potential projects to be stratified.

Optimal business model

Calculate the "variables" in relation to the "formula" that we gave above, or similar to it, the investor will try, analyzing, first of all, the business model proposed by the entrepreneur. That is, to study it for the existence of solutions that are able to provide the required revenue stream in the time period that the investor and other interested parties are happy with. The principles of the evaluation of investment projects, based on the peculiarities of the business model, are based on the use of special methods for calculating key indicators. Consider them.

Calculation of indicators

In practice, the calculation of indicators, as a rule, is carried out using the methods of discounting. That is, the size of the weighted average value of capital is taken or, if it is more suitable from the point of view of the business model, the average market yield for similar projects. There are methods of discounting based on bank rates. That is, the profitability of the project is compared, as an option with a return on placement of a similar amount of cash on a bank deposit. Typically, such indicators for assessing the effectiveness of investment projects also take into account inflation or related processes that reflect the depreciation of assets that are particularly important for the investor.

Let us now turn from theory to practice. Let's consider how the evaluation of investment projects is carried out by analyzing some of the criteria outlined above. Let's start with the payback period. This is one of the key indicators that are used to evaluate investment projects. If, for example, the other criteria of the two compared business initiatives are the same, then preference is usually given to where the investments go faster "to zero".

Analysis of the payback period

The given criterion is a time interval between the moment of start of the business project (or financial tranche of investments of the investor) and fixing of event when the total sum of the saved net profit becomes equal to the cumulative volume of investments. Some experts add one more condition - the trend characterizing the business exit "to zero" should be sustainable. That is, if in some of the months after the start of the business the accumulated profit became equal to the investment, and after a while the costs again exceeded the revenue, then the payback period is not fixed. However, there are analysts who do not take into account this criterion or take it into account in the framework of complex formulas with a large number of conditions.

In which cases is the investor inclined to make a positive decision based on the analysis of the payback period? Experts identify two main cases. First, if, in relation to this period, a profit equal to or comparable to the minimum annual discount rate will be received faster than 12 months. That is, provisionally speaking, if for 10 months of the project the investor will receive profitability of 15%, equal to 15% per annum in the bank, he will prefer to invest in the project than to open a deposit in order to invest another two months in the release of capital, Something. Secondly, the decision to invest in a business can be made if the investor finds the payback period acceptable, provided that the risk assessment of the investment project does not reveal factors that could affect the decline in profitability. Such cases are mainly characteristic for economies with low inflation and low volatility of the exchange rate (and, hence, with small interest on bank deposits) - then investors are more willing to consider investing in real business, paying more attention not only to profitability, but also to risks.

However, the evaluation of investment projects, based only on the payback period, is insufficient. Mainly because in this case the profit that can be received after the revenue exceeds the costs is not taken into account. Relatively speaking, it may well be that the investor, having received 15% and withdrawing capital, will miss the opportunity to earn another 30% within the next year.

Net Present Value

As we said above, the indicators of the effectiveness of investment projects include such a criterion as net present value. It is the difference between the amount of expected revenue and the size of the initial investment in the business. That is, it reflects how much the firm's total capital can grow. The investor will give preference to the project in which the net present value with the same level of risks and with the same time interval is expected to be higher. In this case, the payback period may not be taken into consideration at all (although this does not happen often).

Internal rate of return

The above indicators of investment projects evaluation are often supplemented by such criterion as the internal rate of return. The main advantage of this tool is that the investor's profit can be calculated without taking into account the discount rate. How is this possible? The matter is that the internal form of profitableness assumes conformity to that to the rate of discounting, but thus the size of expected proceeds will coincide with the size of the enclosed means. Relatively speaking, the investor, investing 100,000 rubles into the project, can be sure that at least the same amount he will receive after a specified period of time, as well as a "surcharge" that suits him, based on the chosen discount rate.

Modified rate

Evaluation of the investment attractiveness of the project can also be supplemented by a criterion such as a modified internal rate of return. It can be used if, for example, the net present income turns out to be negative (less than the discount rate chosen), although other indicators are positive. For example, the usual internal rate of return. That is, conditionally speaking, the investor, investing 100 thousand rubles in a particular period of time, returns them with a 15% premium after 10 months of business, but after 24 months the company's total profitability is 1-2%. In this case, it becomes necessary to adjust the internal yield, based on periods when revenue is insufficient to meet the criterion for the discount rate, up to the fixation of a net loss. Therefore, it is important for the investor to know: maybe it is better for him to invest 100 thousand rubles on terms of repayment with interest after 10 months and to raise 15 thousand than to put the money into circulation for 24 months and to raise only 1-2 thousand rubles.

Profitability index

Economic evaluation of investment projects, as a rule, involves the inclusion in the analysis of such a criterion as the index of profitability. This parameter allows you to determine how much, on average, all investors (or only if all of its firm's capital) will receive after a specified period of time, based on the initial volume of directed funds.

Qualitative criteria

Above we have considered the rational, quantitative criteria by which a financial evaluation of an investment project can be made. There are, however, also qualitative parameters. They are difficult to express in figures (although in some respects, of course, it is possible). But they are often no less important than "formulas", in which the parameters studied by us are taken into account. What criteria can we talk about? Experts identify their next set.

First, the studied business project should be balanced, take into account the objective conditions of the market, meet the stated goals. Secondly, the entrepreneur's intentions and expectations should be adequate to the available resources - personnel, fixed assets, sources of financing. Thirdly, a qualitative assessment of the risks of the investment project should be carried out to the proper degree. Fourth, the enterprise should calculate the possible impact of the implementation of business initiatives on non-economic areas - society, politics at the regional or municipality level, ecology, and analyze image effects.

Profitability factors

Actually, where do the numbers that are substituted into the "formulas" come from to determine the rational criteria on the basis of which the investment attractiveness of the project can be assessed? There can be a lot of data sources. Let's try to determine what their nature can be. Experts identify two main groups of factors that influence "variables" for "formulas" with respect to rational indicators-those that affect the size of profits and those on which costs depend. At the same time, this classification is variable insofar as the same factor can simultaneously contribute to the growth of the income of one firm and at the same time complicate the business for another. A simple example is the ruble rate. Its growth is very profitable for exporters - their revenue in the Russian national currency is growing. In turn, importers have to significantly overpay. In addition to currency trading, what other factors can be cited as an example?

This may be an increase or decrease in capacity in a specific segment of the market, and as a result, sales volumes will increase or decrease. As a rule, this is due to the emergence of new players in the industry, mergers, bankruptcies, etc., in some cases - state policy. Another factor is the growth of the firm's costs due to inflationary processes, changes in the market stability of suppliers and counterparties. Another example is the impact of technological processes - the introduction of certain sales tools or in production can significantly affect the overall dynamics of revenue in the business. As a rule, newer equipment involves a reduction in the technological cycle. As a result, the product enters the market faster. Estimating the cost of an investment project with a better production base may be higher than that which implies the use, albeit reliable, of equipment that is more conservative in terms of the dynamics of output of goods.

Additional criteria

There are also indicators for evaluating investment projects, which are not so much of an economic nature as are based, to a greater extent, on accounting principles. That is, we study how efficiently the company is registering, how the evaluation of the value of fixed assets is regularly carried out, to what extent the document flow within the company and with partner organizations and state structures is effectively established.

An economic evaluation of investment projects at the macro level is also possible. That is, there is an analysis of the set of factors that can affect the prospects of the business, based on the conjuncture of the national or global market. In some cases, specific features of legislation are taken into account. That is, if, for example, at the level of sources of law at the federal level, private adjustments are possible in the aspect of customs legislation (for example, the ban on the import of such goods from abroad), then the investor may find it inappropriate to invest in such and such a business, despite That the calculated indicators of profitability and profitability are very promising.

It can be carried out not only a financial evaluation of the investment project, but, for example, analysis of the personality of the business owner at the level of psychology, its links, recommendations of other market players. A variant is possible when the investor makes a decision based on a personal relationship to a person who is considered as a candidate for business partners.

It is also possible that investment prospects will be evaluated based on the recommendations of other market participants, industry ratings, the frequency of the presence of the brand and company executives in the media. If it is a question of serious investments - the investor, as a rule, uses an integrated approach to the evaluation of the investment project.