Commercial activity. Efficiency of use of financial resources (lecture notes)

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Commercial activity. Efficiency of use of financial resources (lecture notes)

Lecture notes, cheat sheets

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27. Efficiency in the use of funds

The founders of the project must be well aware of the intermediate and final results of the intended process. All possible options for the effective use of financial resources should be calculated, from which the most appropriate option for implementing the project is singled out. In the course of negotiations with investors, economic aspects can be reviewed, developed and formalized in the form of new decisions.

Investment efficiency has two main groups of criteria: absolute and relative. The absolute criterion is a significant excess of profit over costs (net profit). The relative criterion is the various ratios of income to investment funds (profitability).

Investors, when deciding to invest in a company's project, are interested in the following issues: profit margins, loan repayment terms, ability to pay interest.

For the founders and participants of the project, the following performance parameters will be of interest: net profit, break-even rate, the cost of long-term current net profit to their share of the contribution, the ratio of net profit to sales volumes.

Taking into account all the indicators of interest, the project participants have the opportunity to make the most rational decision in choosing the method of financing, in choosing the form of organization of the company, as well as in choosing the marketing strategy.

The financial section of the business plan combines sales and cost forecasts, payment forecasts, and financial risk analysis.

Financial risks include:

1) associated with a change in foreign economic policy;

2) associated with adverse changes in the social and political spheres;

3) related to changes in economic legislation;

4) associated with poor orientation in new technologies and insufficient knowledge of new technology;

5) instability of prices in the markets;

6) the possibility of changing natural and climatic conditions;

7) associated with production and technical failures;

8) associated with the uncertain behavior of project participants;

9) instability and unreliability of the financial position of the company or firm.

Given the possibility of these risks, it can be concluded that the investment assessment should depend on taking into account all possible changes in various areas that relate to the implementation of the project. Evaluation of the effectiveness of investment resources should be based on a qualified expert opinion.

Authors: Egorova E.N., Loginova E.Yu.

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