Investments. Cheat sheet: briefly, the most important

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Investments. Cheat sheet: briefly, the most important

Lecture notes, cheat sheets

Directory / Lecture notes, cheat sheets

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Table of contents

DEFINITION OF INVESTMENTS AND THEIR ECONOMIC CONTENT

There are several definitions of the term "investment":

1) investments - this is an investment of capital with the aim of its subsequent increase. At the same time, the capital gain received as a result of investment should be sufficient to compensate the investor for the rejection of available funds for consumption in the current period, reward him for risk and compensate for losses from inflation in the future period;

2) from a financial and economic point of view investments - this is a long-term investment of economic resources in order to create and receive net profit in the future, exceeding the total initial invested capital;

3) investments - investment of capital in objects of entrepreneurial activity and (or) other activities in order to make a profit and (or) achieve another beneficial effect;

4) investments - Expenses for expanding and updating production associated with the introduction of new technologies, materials and other tools and objects of labor.

In accordance with the Law of the Russian Federation "On investment activities in the Russian Federation, carried out in the form of capital investments" under investment means money, securities, other property, including property rights, other rights having a monetary value, invested in objects of entrepreneurial and (or) other activities in order to make a profit and (or) achieve another beneficial effect.

In this way, investments - this is the capital invested in various objects of activity to obtain a beneficial effect. These are funds, property and intellectual values of the state, legal entities and individuals aimed at creating new enterprises, developing, reconstructing and re-equipping existing ones, acquiring real estate, shares, bonds and other securities and assets for the purpose of making a profit and (or) otherwise positive effect.

The economic content of investments is expressed in two aspects of the movement of capital:

1) investments are embodied in the created investment object of entrepreneurial activity, forming the investor's assets;

2) with the help of investments, resources and funds are redistributed between those who have them in abundance and those who have them limited.

Investments are aimed at the reproduction of capital, its maintenance and increment. The volume and effectiveness of investments mainly determine the life cycle of the economy. The more efficiently the processes of expanded reproduction of capital take place, the more successfully and more organized the production potential and social infrastructure of the country develop.

TYPES OF INVESTMENT

There is the following classification of investments.

1. Depending on the investment object:

1) real (capital-forming) investments

▪ investment in the creation of new, reconstruction and technical re-equipment of existing enterprises. These are funds allocated to both fixed and working capital.

Real investments in the enterprise include investments:

▪ for the development of production (reconstruction and technical re-equipment; expansion of production; release of new products; modernization of products and development of new resources; acquisition of intangible assets);

▪ for the development of the non-productive sector (housing construction; construction of sports and recreational facilities, etc.);

2) financial investment - investing in securities, assets of other enterprises, bank deposits, debt rights.

In relation to the totality of real and financial investments, enterprises use the concept of an investment portfolio, and investments in various types of assets associated with a single investment policy are called portfolio investments;

3) intellectual investment - training of specialists in courses, transfer of experience, licenses and know-how, joint scientific developments, etc.

2. By the nature of participation in investment:

1) direct investments - direct participation of the investor in the choice of objects of investment and investment;

2) indirect (indirect) investments - investment carried out by investment or other financial intermediaries.

3. By investment period:

1) short-term investments (no more than 1 year);

2) long-term investments (more than 1 year).

4. According to the forms of ownership of the investor:

1) private investment - investments made by citizens, enterprises of non-state forms of ownership;

2) public investment - investments made by central and local authorities and administration at the expense of budgets, extra-budgetary funds and borrowed funds, as well as enterprises and organizations of state ownership;

3) foreign investment - investments made by foreign citizens, legal entities, states, unions of states and international organizations;

4) joint investment - investments made by the subjects of the given country and subjects of foreign states.

5. On a regional basis - investments within the country and abroad.

6. Depending on the types of investment financing sources:

1) own (amortization fund, profit, financial reserves);

2) borrowed (loans, bond issues);

3) involved (through the issue of shares).

SUBJECTS OF INVESTMENT ACTIVITY

The subjects of investment activity carried out in the form of capital investments include:

1) Investors (individuals and legal entities created on the basis of a joint activity agreement, and associations of legal entities that do not have the status of a legal entity, state bodies, local governments, foreign investors).

Legal entities include: business partnerships and companies; joint-stock companies; production cooperatives; state and municipal unitary enterprises; non-profit organizations.

Investors make capital investments in the territory of the Russian Federation using their own and (or) borrowed funds in accordance with the legislation of the Russian Federation. Among the investors - legal entities stand out:

▪ enterprises and organizations like independent investors;

▪ institutional investors (financial and credit institutions, various financial and investment funds, public organizations). Their difference is that the capital they invest is previously accumulated from other investors (individuals and legal entities);

2) customers - individuals and legal entities authorized by investors that carry out the implementation of investment projects. They do not interfere in the entrepreneurial and (or) other activities of the subjects of investment activity, unless otherwise provided by the agreement between them. The customer can also be investors.

The customer, who is not an investor, is vested with the rights to own, use and dispose of capital investments for the period and within the limits of authority established by the agreement and (or) state contract in accordance with the legislation of the Russian Federation;

3) Contractors - individuals and legal entities that perform work under a work contract and (or) a state contract concluded with customers in accordance with the Civil Code of the Russian Federation. Contractors are required to have a license to carry out those types of activities that are subject to licensing in accordance with federal law;

4) users of capital investment objects - individuals and legal entities, including foreign ones, as well as state bodies, local self-government bodies, foreign states, international associations and organizations for which these objects are created. Investors can be users of capital investment objects.

Relations between the subjects of investment activity are carried out on the basis of an agreement and (or) a state contract concluded between them in accordance with the Civil Code of the Russian Federation.

DIRECT PARTICIPATION OF THE STATE IN INVESTMENT ACTIVITIES

TAX AND DEPRECIATION POLICY OF THE STATE

Direct participation of the state in investment activities:

1) the Russian Federation with foreign states develops, approves and finances investment projects;

2) priority investment projects are financed from the federal budget and the budgets of the constituent entities of the Russian Federation;

3) The Government of the Russian Federation forms and approves a list of construction sites and facilities for technical re-equipment for federal state needs, financed from the federal budget;

4) provision on a competitive basis of state guarantees for investment projects from the federal budget, funds from the budgets of the constituent entities of the Russian Federation;

5) allocation on a competitive basis of funds from the federal budget and funds from the budgets of the constituent entities of the Russian Federation to finance investment projects;

6) examination of investment projects;

7) protection of organizations of the Russian Federation from the supply of low-quality and obsolete equipment, technology, etc.;

8) issue of bonded loans to finance investment projects, etc.

Depreciation policy regulates the accrual and use of depreciation deductions. Pursuing a depreciation policy, the Russian Federation regulates the pace and nature of reproduction (increases the renewal of fixed assets). A correct depreciation policy allows enterprises to have the necessary investment funds for the reproduction of fixed assets.

Tax policy - a system of economic, financial and legal measures of the state in the formation of the country's tax system in order to implement certain tasks facing society.

Principles of building tax policy: ratio of indirect and direct taxes; the application of progressive rates of taxation and the extent to which they are progressive or the predominance of proportional rates; discreteness or continuity of taxation; the availability of tax incentives, the nature and purpose of them; the degree of uniformity of taxation for various types of income and taxpayers; tax base formation methods; ratio of federal, state and local taxes.

Objectives of tax policy: state participation in the economy, social reproduction, aimed at stimulating or restricting economic activity; ensuring the government's needs for finances sufficient to carry out socio-economic policy, for the performance by government and management bodies of the functions assigned to them; ensuring state policy of income regulation.

STATE INVESTMENT POLICY

FEATURES OF INVESTMENT POLICY AT THE PRESENT STAGE

The state investment policy in the Russian Federation provides for:

availability of conditions for the development of investment activity in the Russian Federation; participation of the state in investment activity.

Methods for the development of investment activity in the Russian Federation: improvement of the system of taxation and depreciation; establishment of tax regimes; protecting the interests of investors; granting benefits; expanding the use of funds from the population and extra-budgetary sources of financing for housing construction, the development of mortgage lending; implementation of antimonopoly policy; development of financial leasing and collateral for lending; carrying out revaluation of fixed assets with inflation; creation of own investment funds; participation of the state in investment activity.

The Russian Federation develops, approves and finances investment projects with foreign states. The Government of the Russian Federation approves the list of construction sites and facilities for technical re-equipment for state needs, provides state guarantees for investment projects on a competitive basis, allocates funds from the federal budget and budgets of constituent entities of the Russian Federation on a competitive basis to finance investment projects, places on a returnable, paid and fixed-term basis or fixes in the state ownership of the corresponding part of the shares of the joint-stock company being created.

It also conducts appraisals of investment projects, protects organizations of the Russian Federation from the supply of low-quality equipment, technology, etc., issues bonded loans to finance investment projects, etc.

A guarantee for the investor is the stability of the conditions and regime for the implementation of the investment project. Its essence is that changes in legislation related to the amount of customs duties and federal taxes that increase the tax burden on the investor's activities are not applied to an investor implementing a priority investment project during its payback period, no more than seven years from the start of financing.

An important role in the investment policy of the Russian Federation is played by foreign investments, which enjoy full legal protection on the territory of the Russian Federation.

Foreign investments on the territory of the Russian Federation enjoy full legal protection, which is provided by law.

Foreign investments in the Russian Federation are not subject to nationalization and cannot be subject to confiscation provided for by law. In cases of nationalization, the foreign investor is paid prompt and adequate compensation.

CONCEPT OF INVESTMENT PROJECT, CONTENT, CLASSIFICATION

Investment project - a comprehensive action plan aimed at creating a new or reconstructing existing production of goods and services in order to achieve the strategic goals of the company, obtaining economic and other positive effects.

Under investment project in a narrow sense, a set of documents containing a reasonable goal of the forthcoming activity and certain measures aimed at achieving it is understood.

Therefore, the "investment project" can be interpreted as:

1) an activity or event that involves the implementation of a set of actions that ensure the achievement of certain goals (obtaining certain results);

2) a system that includes a certain set of organizational, legal, settlement and financial documents necessary for carrying out any actions or describing such actions.

It reveals the capabilities of the company (summary), types of goods (services), markets for goods (services), competition in the markets, marketing plan, production plan, financial plan.

Classification of the investment project:

1) by the number of participants and the degree of influence on the world around:

▪ small projects - plans to expand production and the range of products. They have short lead times;

▪ medium projects - projects for reconstruction and technical re-equipment of existing production facilities. Implemented in stages, by production, according to developed schedules for the receipt of all resources;

▪ large projects - objects of large enterprises, based on the idea of industrial production of products necessary to meet demand;

▪ megaprojects - targeted investment programs containing projects interconnected by the final product. There are international, state, regional;

▪ global projects, their implementation affects the economic, social or environmental situation on Earth;

▪ large-scale projects, their implementation affects the economic, social or environmental situation in other countries;

▪ regional, city (industry) scale projects, their implementation affects the economic, social and environmental situation in a certain region, but does not affect the situation in other regions;

2) by main areas of activity: social; economic; organizational; technical; mixed;

3) by duration: short-term (up to 3 years); medium-term (3-5 years); long-term (over 5 years);

4) by complexity: simple; complex; very complex.

STAGES OF DEVELOPMENT AND IMPLEMENTATION OF INVESTMENT PROJECT

Investment projects can be innovative. Despite the variety of possible ideas, each investor evaluates his financial capabilities, the level of competition, return on invested capital, risk and other factors of project implementation in the future.

Any investment project goes through three stages of development and implementation: pre-investment, investment and operational, which together make up its life cycle.

The first pre-investment stage includes the following activities:

▪ checking the original design of the project;

▪ drawing up assignments for the development and justification of the project;

▪ development of a business plan;

▪ choosing the location of the object;

▪ allocation of investments for design;

▪ holding tenders for design;

▪ selection of a design organization and conclusion of an agreement with it;

▪ development of a feasibility study for the project;

▪ development of design and estimate documentation;

▪ approval of design and estimate documentation;

▪ allocation of land for construction;

▪ obtaining a construction permit;

▪ holding tenders for construction;

▪ development of working documentation;

▪ conclusion of a contract agreement.

The extent of due diligence varies from the requirements of the investor, possibly funding from the time allotted for their implementation. Allocate three levels of due diligence:

feasibility studies; preparatory, or pre-project, research; feasibility assessment or feasibility studies. The general document of pre-investment research is the business plan of the investment project.

The cost of conducting the pre-investment stage of research in the total amount of capital investments is quite high.

Investment stage project implementation consists of the following activities: construction of facilities included in the project; installation of equipment; commissioning; production of prototypes; reaching design capacity. During the investment stage of the project, the assets of enterprises are formed, contracts for the supply of raw materials and components are concluded, workers and employees are recruited, and a portfolio of orders is formed.

Operational stage project significantly affects the effectiveness of invested funds in the project. The further its upper limit is carried in time, the greater the total income will be. During this phase, ongoing monitoring of the economic performance of the project is carried out so that the investor can compare the project's performance with their expectations.

BUSINESS PLAN OF INVESTMENT PROJECT

business plan is a strictly structured document that requires the necessary elaboration, which describes the goals of the enterprise and the methods for its implementation. The specificity of a business plan lies not only in the accuracy and reliability of quantitative indicators, but also in the substantive justification of the project ideas and their quality.

a business plan is considered as a tool for attracting finance, and for investors it is a guarantee of a stable and optimal investment of capital. A thorough justification of the business plan finds investors confidence in the effectiveness and safety of investments.

The composition of the business plan and the degree of its structure depend on the scale, size and industry of the project. The idea and development of a business plan is preceded by the definition and justification of the goals of the project, the collection and processing of reliable information on a wide range of issues. The full volume of this information during the implementation of the project is constantly increasing, so it is recommended to prepare two versions of one business plan. The first is a kind of internal business plan, a practical guide to action; the second is an external business plan intended for potential partners.

The internal business plan is intended to serve as a working document within the company, should concentrate the entire amount of information necessary to solve specific problems and predict the development of events when performing individual activities and monitoring.

The structure of the business plan includes:

1) summary;

2) analysis of the state of affairs in the industry;

3) the meaning of the future project;

4) market research and analysis;

5) marketing plan;

6) production plan;

7) organizational plan and personnel management;

8) degree of risk;

9) financial plan;

10) applications.

A characteristic feature of the business plan is the brevity of the presentation, achieved through a distinct structure of sections that reflect different aspects of achieving the goals.

Drawing up a business plan is necessary so that the owner of the capital, referring to the indicators included in it, can draw conclusions about whether everything is going in accordance with the goals, and, if necessary, take corrective measures.

External factors for the implementation of the business plan include: the economic situation in the country; consumer demand; emergence of new technologies and innovations; changing the policy of competitors, etc.

The most effective business plan may lose relevance and expediency when the conditions for its implementation and implementation change, and the investor will not make appropriate adjustments in a timely manner.

CONSIDERING INFLATION IN INVESTMENT DECISIONS

Inflation affects the value of the effectiveness of an investment decision, the conditions of financial feasibility, the need for financing and the effectiveness of participation in a project of equity capital. This impact is noticeable for projects with a temporary investment cycle (in the extractive industry), or (and) requiring a significant share of borrowed funds, or (and) implemented with the simultaneous use of several currencies (multi-currency projects). Inflation should be taken into account when examining the effect of uncertainty and risk on the feasibility and effectiveness of projects.

Accounting for inflation is carried out using:

▪ general index of ruble domestic inflation, determined taking into account the adjusted working forecast of the course of inflation;

▪ forecasts of the ruble exchange rate;

▪ forecasts of external inflation;

▪ forecasts of changes over time in prices for products and resources (gas, oil, energy resources, equipment, etc.), forecasts of changes in the level of average wages and other aggregated indicators for the future;

▪ forecast of tax rates, duties, refinancing rates of the Central Bank of the Russian Federation, etc., financial standards of state regulation.

Inflation affects:

▪ on price indicators;

▪ for financial need;

▪ for the need for working capital.

Inflation Forecast Procedure

First you need to determine which category of inflation the project belongs to:

▪ if measures have been taken to reduce the impact of inflation on the need for financing, then for projects of the second category the minimum possible level of inflation should be used (for example, calculate in current prices). For projects of the first category, the maximum one should be chosen from all reasonable inflation forecasts;

▪ if such measures are not taken, then, along with the described maximum inflation forecasts, it is necessary to consider scenarios associated with the fastest (of those actually predicted) reduction in inflation from the accepted maximum to the accepted minimum value;

▪ estimate the lower limit of possible changes in one of the characteristics of changes in the exchange rate (for example, chain indices of internal inflation of foreign currency), including from considerations of the ratio of dollar prices for products: according to the project and existing ones (within the country and abroad).

In addition, the financial feasibility and effectiveness of the project should be tested at various levels of inflation as part of an assessment of the sensitivity of the project to changes in external conditions.

When forecasting inflation, one should take into account official data, as well as expert and other estimates that take into account the GNP deflator, and (or) price indices for a fairly large "basket" of permanent composition.

THE CONCEPT AND PRINCIPLES OF ASSESSING THE EFFICIENCY OF THE INVESTMENT PROJECT

Investment project efficiency reflects the compliance of the project with the goals and interests of its participants. The following types of performance need to be evaluated:

1) the effectiveness of the project as a whole (includes the public (socio-economic) and commercial (financial) effectiveness of the project);

2) the effectiveness of participation in the project (determined in order to verify the feasibility of the investment project and the interest in it of all its participants).

Basic principles for evaluating the effectiveness of investment projects:

1) consideration and analysis of the project from conducting pre-investment studies to the termination of the project;

2) cash flow modeling;

3) comparability of the conditions for comparing various projects for a qualitative choice of alternative investment decisions;

4) positivity and maximum effect.

For an investor, an investment project will be effective if the effect of its implementation is positive;

5) taking into account the time factor;

6) accounting for future costs and receipts;

7) taking into account all the most significant consequences of the project;

8) taking into account the presence of different project participants, the discrepancy between their interests;

9) taking into account the impact on the efficiency of the investment project of the need for working capital (its growth) necessary for the functioning of the production assets created during the implementation of the project, and their expanded reproduction;

10) assessment of the impact of inflation, the possibility of using several currencies in the implementation of the project;

11) taking into account the impact of uncertainties and risks in the implementation of the investment project.

The main indicators used to calculate the effectiveness of an investment project, are:

▪ commercial (financial) efficiency, showing the financial results of the investment project;

▪ budgetary efficiency, reflecting the financial consequences of the project for budgets of various levels and extra-budgetary funds;

▪ economic efficiency, taking into account the ratio of costs and results of an investment project;

▪ social efficiency, reflecting the social consequences of the implementation of an investment project;

▪ environmental efficiency, characterizing the environmental consequences of the implementation of an investment project.

SYSTEM OF INDICATORS FOR ASSESSING THE EFFICIENCY OF INVESTMENT PROJECTS

1. Indicators of commercial (financial) efficiency.

When calculating commercial efficiency the effect is a flow of real money. When implementing an investment project, three types of activities are distinguished: investment, operational and financial, within each of which there is an inflow of Pi(t) and an outflow of Oi(t) funds. Real money flow (q(t)) - the difference between the inflow and outflow of funds from investment and operating activities in each period of the project:

q(t) = [P1(t) - O1(t) + P1(t) - O2(t)] = q1(t) + q2(t).

Real money balance - the difference between the inflow and outflow of funds from all three types of activities also at each calculation step:

2. Budget performance indicatorsreflecting the consequences of the implementation of the investment project on the federal, regional and local budgets. The main indicator of budgetary efficiency is the budgetary effect, which reflects only that part of the effect that goes to the budget:

Bt \uXNUMXd Dt - Pt.

Integral budget effect - the sum of discounted annual budget effects for the entire period of implementation of the investment project or as an excess of integral budget revenues over integral budget expenditures.

3. Economic efficiency indicatorsreflecting the costs and results of the project and taking into account both the interests of its participants and the interests of the country, region or city.

Choice of various projects, in the implementation of which the state (region) participates, is carried out according to the highest value of the indicator of the integral national economic effect.

When evaluating several investment projects and selecting them, it is advisable to introduce an additional summary performance indicator, which includes a combination of all three of the above indicators:

K1,2,3 - coefficients of increase (decrease) in the significance of the indicator.

When evaluating the effectiveness of an investment project, the comparison of multi-temporal indicators is carried out by bringing them to the initial time of the project implementation. For this, the discount rate (E) is used, which is equal to the rate of return on capital acceptable to the investor.

Reduction to the initial (basic) moment of time of costs, results and effects that take place at the 1st calculation step is conveniently carried out by multiplying them by the discount factor (Kd), determined by the formula:

METHODS FOR ASSESSING INVESTMENT PROJECTS

There are both simple and complex methods for evaluating an investment project.

Simple methods for evaluating investment projects include:

1) determination of the payback period of investments - this is the period of time at the end of which the amount of the increase in funds from the implementation of the investment project will be equal to the initial amount of capital investment in the investment project. That is, the payback period characterizes the period of time during which the investment made by the investor in the project will be reimbursed by the income from its implementation.

The payback period can be determined with or without discounted cash flows. The payback period, taking into account discounting, is the duration of the period from the initial moment to "the moment of payback, taking into account discounting". The payback moment, taking into account discounting, is the earliest point in time in the billing period, after which the current net discounted income becomes and remains non-negative in the future;

2) the method of calculating the return on invested capital. This method is based on the use of information about cash flows, about the possibility of making a profit from the implementation of an investment project. This method has a number of disadvantages due to the fact that it does not take into account the time component of cash flows, does not distinguish between projects with the same amount of average annual profit, but a varying amount of profit over the years, between projects that have the same average annual profit, but generated over a different number of years. .

Complex methods for evaluating investment projects include:

1) the methodology for determining the value of investments when using compound interest - based on the reinvestment of annual interest income. As a result, the investor receives income both from the initially invested capital and from interest received in previous years.

This technique is called compounding, i.e. bringing costs and results to the final point in time;

2) the method of calculating the net present value of the investment project (net present value, integral economic effect) - the excess of the integral (for the estimated period of time) discounted cash receipts over the integral discounted cash payments due to the implementation of the investment project;

3) determination of the internal rate of return of investment projects - the discount rate that vanishes the value of the net present value. It reflects the amount of income per unit of investment invested in the project.

METHOD OF CALCULATION OF RETURN ON INVESTED CAPITAL

The method is based on the use of information about cash flows, about the possibility of making a profit from the implementation of an investment project.

Return on invested capital (ROI) is calculated using the formula:

HVAC = (Pos / Ios) x 100,

where Pos is the expected average profit from the implementation of the investment project,

Ios is the expected average investment for the project.

The expected average profit is defined as the sum of the differences in incremental revenues and expenses over the period of the project, divided by the estimated useful life of the project.

The average investment is found by dividing the initial amount of capital investments by two, if after the expiration of the analyzed project, all capital costs are written off; if residual or salvage value is allowed, its estimate should be taken into account. At the same time, the average value of the expected investment depends on the depreciation method. With straight-line depreciation, the expected investment is half the initial investment plus salvage value at the end of the project life.

A similar indicator for evaluating the effectiveness of an investment project is the average accounting rate of return, which is determined by the formula:

NPs = (By / I) x 100,

where To - the total profit for the entire period of the project life cycle,

And - the initial amount of investment in the project.

In practice, to calculate the return on invested capital, the following formula is used: return on invested capital = expected average profit / expected average investment x 100%.

Some formulas also use the total profit, which is in the numerator, or the initial investment, which is in the denominator. Many combinations are possible, but one method already chosen should be followed.

This method is based on the use as initial data of the time (number of years) required to cover the initial investment in the project; the size of the annual contribution, calculated as the difference between annual income and costs.

It does not take into account the time of receipt of income from the implementation of the project. Accounting for the degree of income and their depreciation needs to take into account the time of receipt of profit.

The advantages of m and this method are the simplicity and understanding of calculations, the certainty of the amount of initial investment, etc.

Disadvantages: neglects the return on invested capital (does not evaluate profitability), gives an equal assessment of investment levels regardless of the payback period.

ESSENCE OF CAPITAL CONSTRUCTION

Capital construction ensures the expanded reproduction of production capacities and fixed assets for the entire national economy. Together with mechanical engineering, it creates fixed assets for all branches. The result of the construction are structures of various functional purposes. The basis for its implementation are capital investments. They are directed to: new construction, modernization and reproduction of an existing enterprise, technical equipment of the production process, expansion of the facility, etc.

New construction includes the construction of a complex of facilities for the main, ancillary and service purposes of newly created enterprises, branches or individual industries at new sites according to the initially approved project, which, after their commissioning, will be on an independent balance sheet.

Expansion - construction of additional production facilities, separate workshops at an existing enterprise. It includes the construction of new branches and industries, which, after they are put into operation, will be part of an existing enterprise or organization.

Reconstruction of existing enterprises and organizations - full or partial reorganization of existing industries, workshops and other facilities without expanding the main facilities, associated with the improvement of production and raising its technical and economic level in order to increase production capacity.

The main goal of reconstruction and technical re-equipment is to increase the efficiency of production through its technical re-equipment and by increasing output, improving its quality and reducing production costs.

Capital investments are a financial source for the implementation of capital construction.

capital construction - the process of creating production and non-production fixed assets through the construction of new, expansion, reconstruction, technical re-equipment and modernization of existing facilities. With its help, the renovation of physically and morally depreciated fixed assets is being carried out. It covers all stages of the creation of fixed assets, from the design of objects and ending with their commissioning. Its decisive stages are the implementation of a complex of construction and installation works, adjustment and testing of the installed equipment in operation and ensuring the commissioning of facilities under construction.

Capital construction includes design and survey work and research, construction and installation organizations, construction industry enterprises, production of building materials and transport.

SUBJECTS OF INVESTMENT AND CONSTRUCTION ACTIVITY

Investor - a subject of investment activity that finances a construction project using its own or borrowed funds. He has legal rights to the results of the financing; determines the range of application of capital investments; develops contracts for the construction of the facility; resolves issues regarding organizational forms of construction in order to determine the designer, contractor, supplier at auction, using private proposals.

The investor is a customer, creditor, buyer of a construction object, performs the functions of a developer.

Customer is a legal or natural person who organizes, manages the construction of an object.

Developer - a legal or natural person who has rights to a plot of land for development. He is a landowner. The customer uses the land for development on a leasehold basis.

Contractor - a construction company that carries out construction under a contract or contract.

The contractor is responsible to the customer for the construction of the facility in accordance with the terms of the contract, the project, the requirements of construction standards and rules, and the cost of the order.

It may engage on a subcontract basis for the performance of certain types of work or for the construction of individual facilities or structures, subcontracting construction, installation specialized organizations. Thus, several independent organizations are involved in the investment process of creating a new construction object, which have a variety of targets in the implementation of their economic effect. The main goal of the investor and the customer is the construction of the facility and its commissioning, subject to the minimum cost of capital investments in the shortest possible time in order to generate income.

The main task of the contractor is to achieve maximum profit and profitability of work. Achieving the goal is carried out in two ways: by increasing the prices of construction and installation works (CEW), i.e., by increasing the price of construction, or by reducing costs through the introduction of scientific and technological progress and innovative technologies.

The first way is more accessible, but it contradicts the main task of the investor and the customer - putting the facility into operation with minimal capital investment. To overcome these contradictions, certain incentives are needed that would unite the interests of all construction participants in achieving the set task.

In the system of capital construction, organizational forms and organizational relations between the participants in the investment process are very important for achieving the final goal of construction.

INVESTMENT CYCLE IN CONSTRUCTION

Investment cycle - this is the period covering the process of creating an investment product based on the circulation of capital (production assets). Each enterprise has its own type of activity and object of management. For a survey organization, the object of management is the process of choosing a place for the construction of buildings, structures and industrial complexes, for design organizations - a production process in which production assets are raw materials (materials, semi-finished products, products, structures), a complex resource (technical means, finance and labor of workers ) are transferred to the finished product.

In the process of production there is a circulation of production assets. Working capital in full, and fixed assets not in full, in the form of depreciation, are transferred to a new quality, to finished building products.

Construction and assembly organizations (general contractors and subcontractors) and their enterprises and divisions that perform work packages are involved in the implementation of funds in the production process.

The production process of constructing buildings and structures is the object of management for the general contracting organization; for other organizations participating in the production process, it is the work that they perform as part of this process.

For each construction company, the management process has its own scope and time limits in the form of production programs for a certain period.

Life cycle of an investment project - the time interval from the moment the investment project appears to its completion. This cycle is divided into phases: conceptual phase, planning and design, implementation, completion. Phases are divided into stages, stages. When it comes to a specific case of an investment project - the design and construction of a specific building project, the complex of ongoing work is usually referred to as the "investment cycle". The investment cycle is divided into stages: pre-project, engineering surveys, design, construction and installation works, commissioning.

Reliability called the ability of the system to function normally under specified operating conditions for a specified period of time. In construction, the concept of reliability finds a wider application - it is the reliability of designed structures, the reliability of the functioning of the structure as a whole, the reliability of organizational systems.

Outside the Russian Federation, the entire investment cycle is selected as a management object, starting from the question of building an object to putting it into operation or until the end of its operation.

MAIN PRINCIPLES OF THE INVESTMENT AND CONSTRUCTION SPHERE

The formation and functioning of a market economy is carried out in compliance with certain principles. An assessment of the degree of their implementation makes it possible to determine the level of development of market relations in the country. The most significant principles in the investment and construction sector are as follows.

The principle of market forms of pricing. Pricing in the market regulation of the economy in the country is carried out in two forms.

These are free prices for most goods, works and services, i.e. the price is determined on the market, in the process of coordinating the interests of participants in investment and construction activities.

In a number of cases, prices for goods (works, services) are regulated by the state, although they are set either by manufacturers or by special commissions. This situation develops if the producers of products, according to certain criteria, are monopolists.

For the most part, these are the organizational structures of natural monopolies. Liberalization of business activities. The implementation of this principle allows any legal entity or individual to engage in any type of activity, with the exception of certain types of activities prohibited by law. In construction organizations, this principle has now been implemented almost completely: restrictions occur only when carrying out some special construction and installation work.

The presence of various forms of ownership with a predominance of private. Thus, almost all construction organizations in the Russian Federation have private and mixed forms of ownership, formed as a result of privatization.

Demonopolization and concentration of production. It is known that monopoly reduces competition. The openness of the domestic and foreign markets, which, on the one hand, increases the number of competitors for Russian organizations, and on the other hand, facilitates the conclusion of contracts for the performance of construction work by Russian organizations and the receipt of additional funds.

Contractual forms of relationships between economic entities. The mechanism for searching and fixing the relationship between the parties in contracts is decided on the basis of holding investment tenders and contract tenders.

The exclusive right of the owner to regulate the activities of economic entities, when the owner either directly manages the activities of the organization, or indirectly implements his desires through his intermediary in order to use his capital most efficiently.

Construction organizations are created and operate in the following organizational and legal forms: joint-stock companies, limited liability companies, production cooperatives and economic partnerships.

FEATURES OF PRICING IN CAPITAL CONSTRUCTION

The pricing mechanism in capital construction has features related to construction products: variety of construction products; the dependence of the price of construction products on the cost of the land plot on which the building is being erected; territorial location and natural and climatic factors of the object; natural and climatic conditions and construction; the condition of the land plot itself for development; high material consumption of construction products; duration of the production cycle.

Estimated construction cost - the amount of funds necessary for its implementation in accordance with the construction project. The estimated cost of construction in the investor's estimate documentation is recommended to be given: in the basic (constant) price level, determined using the current estimated norms and prices; at current or forecast levels, determined on the basis of prices prevailing at the time of the estimate or forecast for the period of the project.

The result is a summary estimate calculation, which determines the estimated limit of funds required to complete the construction of all facilities provided for by the project.

According to the economic content, the structure of the estimated cost of construction consists of:

construction works; equipment installation works; the cost of purchasing the main and auxiliary technological equipment, furniture, inventory; other costs, including costs for design and survey, research work, training, etc.

Direct costs include: the cost of wages for construction workers, the cost of materials, parts and building structures; operating costs of construction machines and mechanisms.

Overheads - part of the cost of construction and installation works related to the creation of general conditions for construction production, its organization, management and maintenance. Usually they are 20% of the direct costs.

Planned savings, or estimated profit, - the amount of funds required to cover the general expenses of construction organizations that are not included in the cost of construction products. The estimated profit is a guaranteed part of the price of construction products. It is established by agreement of the parties and is at the level of 8% of the amount of direct costs and overhead costs.

Total estimated cost of the construction project (Total):

Comm = Ssmr+Sob+Sdob+Spr,

where Csmr - the cost of construction and installation works;

Sob - the cost of the necessary equipment;

Cdop - additional costs associated with the construction of the facility;

Spr - other unaccounted costs (for design and survey work, refundable amounts, etc.).

CONCEPT AND TYPES OF SECURITIES

Security paper - a financial instrument that certifies the property right or loan relationship of the owner of the document to the person who issued such a document (issuer). The owner does not have the capital itself, but there are rights to it, fixed in the form of a security.

Types of securities:

1) by form of ownership: government securities (types of bonds); non-government securities are put into circulation by corporations, individuals;

2) by the nature of negotiability: market; non-market, when circulation is limited and they cannot be sold to anyone other than the one who issued them;

3) by risk level: risky; low-risk;

4) by the presence of income: non-profitable, when the amount of income of its owner is not specified when issuing securities; profitable;

5) by the form of capital investment (capital is invested in debt or for the acquisition of property rights):

▪ debt - issued for a limited period with a return of invested funds (bonds, bank certificates, bills, etc.);

▪ option - an agreement under which one of the parties has the right, but not the obligation, to sell (buy) the corresponding asset from the other party within a certain period at the price established at the conclusion of the agreement, with payment for this right of a certain amount of money, called a premium;

▪ owner's shares - give ownership rights to the relevant assets (shares, warrants, bills of lading, etc.);

6) by economic nature:

▪ share through which a contribution is made to the authorized capital of the joint-stock company;

▪ bond - a single debt obligation to return the invested amount of money after a specified period with or without payment of a certain income;

▪ bank certificate - a freely negotiable certificate of a deposit (savings) deposit in a bank with an obligation to make the final payment of this deposit and interest on it within a specified period;

▪ bill of exchange - a written monetary obligation of the debtor to repay the debt;

▪ check - a written order from the drawer to the bank to pay the check recipient the amount of money indicated in it;

▪ bill of lading - a document (contract) of a standard (international) form for the carriage of cargo, certifying its loading, transportation and right to receive it;

▪ futures contract - a standard exchange agreement for the purchase and sale of an exchange asset at a certain time in the future at a price set at the time of the transaction

FINANCIAL INVESTMENTS

Financial investments - investments in shares, bonds, other securities, assets of other enterprises, deposit accounts in a bank at certain interest rates, debt rights.

When making portfolio investments, the investor increases his financial capital, receiving dividends - income on securities.

The concept of "financial investment" is often identified with the concept of "portfolio investment", which can be defined as a purposefully formulated set of investments in securities (government bond, promissory note, share, check, bond, certificate of deposit and savings, bill of lading, bank savings book to bearer and etc.).

A common type of securities in the Russian Federation are shares.

Promotion - issuance security that secures the rights of its owner (shareholder) to receive part of the profit of the joint-stock company in the form of dividends, manage the joint-stock company and have a part of the property remaining after its liquidation. Distinctive features of shares are their perpetuity, direct participation of the shareholder in investments and the right to receive income on invested capital, which is directly dependent on the results of management.

Shares are:

▪ simple share - an equity security that secures the shareholder's rights to receive part of the profit of the joint-stock company (JSC) in the form of dividends and appreciation upon its sale.

▪ preferred share - a security that provides the investor with guaranteed dividends (established upon issue of shares) and preferential rights to receive part of the property upon liquidation of the company (compared to other shareholders).

Bonds are the second most common type of securities.

Bond

▪ an issue-grade security that secures the rights of its holder to receive from an element of the bond, within the period specified by it, its nominal value and the percentage of this value or the property equivalent fixed in it.

The following types of income are received on bonds: quarterly, annual (or other periodicity) interest payments; income in the form of a discount, when a security is placed at a price below its par value and is redeemed at its par value (zero coupon bonds).

Portfolio investments in the enterprise include investments in the purchase of securities (shares of other commercial organizations, bonds, other securities):

1) risk-free;

2) low-risk;

3) investments in the assets of other enterprises: manufacturing enterprises; financial and credit institutions; other commercial organizations.

SHARES DESCRIPTION

Promotion - this is an issuance security that secures the rights of its owner (shareholder) to receive part of the profit of a joint-stock company (JSC) in the form of dividends, to participate in the management of the JSC and to part of the property remaining after its liquidation.

The most significant for the investor from the standpoint of the difference in their investment qualities is the division of shares into ordinary and preferred.

The risk of using ordinary shares is balanced by the fact that income on them is not fixed, but represents an appropriate share of profits.

Shares are classified:

1) according to the features of registration and circulation: nominal; bearer;

2) by the nature of obligations: simple; privileged;

3) by form of ownership of the issuer: state-owned companies; non-state companies;

4) by region: domestic issuers; foreign issuers.

The basis for the exercise of rights under an ordinary share is its nominal value.

It is not so much its actual price as an indicator of the volume of rights assigned to its owner. Par value is rarely used for the purpose of buying and selling shares. Book values and market prices apply.

The market price of a share may differ from its face value. It consists of ideas about the reliability of the business that finances these shares.

Ordinary shares have the following advantages: they can receive higher dividends during periods of efficient operation of the JSC; their owners influence the economic process by participating in the management of the JSC; their liquidity in the stock market is higher than that of preferred ones; their income is linked to inflation in the country; Shareholders participate in the development of the JSC's dividend policy.

Advantages of preferred shares: provide their owner with a stable income in the form of dividends; payment on them is carried out regardless of the results of the economic activity of the JSC in the reporting period; fully protected from systematic risk and partially from non-systematic.

For an investor, it matters what profit a share brings, what are its prospects.

Investors in stocks are attracted by:

1) the right to vote in exchange for invested capital;

2) the right to income in the form of dividends;

3) capital gain when the share price rises in the stock market;

4) additional benefits provided by JSC to its shareholders;

5) the right of preemptive acquisition of the following issues of shares;

6) the right to a part of the JSC's property remaining after its liquidation.

SHARE RETURN DETERMINATION

Share return - the ratio of profit, which falls on one ordinary share, to its market value. The profitability of shares depends on: the growth rate of the market value of the shares; the amount of dividend payment; inflation rates and bank interest growth; the amount of income tax.

The amount of dividends received and the difference in purchase and sale prices are two indicators by which the income on shares is determined.

Dividend - income received by a shareholder from part of the net profit of the current year of the joint-stock company, which is distributed among shareholders in the form of a certain proportion of their nominal value; through a dividend, the shareholder’s right to participate in the profits received by the joint-stock company is exercised.

The dividend is paid in cash, other property at the discretion of JSC (shares). The timing of dividend payments is set by the JSC, they are divided into annual and intermediate. The size of the annual dividend cannot be more than that recommended by the Board of Directors of the JSC, and less than the interim dividend payments. The amount of dividend payments is influenced by the terms of payment, the amount of net profit allocated for the payment of dividends, the proportions of distribution of profits for consumption and accumulation.

The return on capital investment in the acquisition of shares is determined by: the size of dividend payments, fluctuations in market prices for JSC shares, the level of inflation, the tax climate, etc.

The actual market price of a share, expressed as a percentage, is called market value, or course (Ka)

Ka = (Sd / Sp) x 100,

where Cd is the dividend rate; Cn is the rate of bank interest.

Wherein:

SD = (D/N) x 100,

where D is the absolute value of the dividend per share; H is the par value of the share.

The efficiency of investment in a share can be expressed by the relative value:

E = (P1 - P0 + D) / Pd,

where P1 is the purchase price of the share; P0 - sale price; D - dividends received during the holding of the share.

Investment return for the period of holding a share (per annum) can be calculated using the formula:

E = ((P1 - P0 + D) / Pd) x (365 / T),

where T is the period of ownership of the share (in days).

The sale price may be lower than the purchase price and no dividends will be paid for the holding period. In this case, the investor will suffer a net loss and the investment return will be negative.

BONDS DESCRIPTION

Bond - this is an issue-grade security that secures the right of its holder to receive from the issuer a bond within the period specified by it at its nominal value and a percentage of this value fixed in it or other property equivalent.

Bonds as investment objects:

1) the interest on bonds is constant or changes slightly, is paid on time, regardless of profit;

2) their holders are entitled to the distributed profit and assets of the issuer upon its liquidation;

3) payment of interest within a certain period;

4) by buying a bond, the investor becomes a creditor;

5) the bond does not give the right to vote.

A bond certifies a loan relationship between its owner (creditor) and the person who issued it (borrower).

Bonds are classified:

1) by types of issuers: bonds of internal state loan; bonds of internal local loans; corporate bonds;

2) by maturity: rent; prolonged; intermediate;

3) according to the features of registration and redemption: nominal; bearer;

4) by forms of payment of income: interest; interest-free;

5) by regional affiliation of the issuer: bonds of domestic issuers; bonds of foreign issuers.

A bond has a face value (or nominal price), an issue price, a market price, and a redemption price.

Rated price - the value in monetary units, which is indicated on the bonds.

Issue price of the bond - the price at which the bonds are sold to their first owners. The issue price may be equal to, less than or greater than the face value. It depends on the type of bond and the terms of the issue.

Redemption price

▪ the price paid to bondholders at the end of the loan term. In most issues, the redemption price is equal to the par price, but it may differ from the par price.

exchange price

▪ the price at which bonds are sold on the secondary market. If a bond has a strictly defined nominal price, redemption price and issue price, the level of which is fixed when the loan is issued, then the exchange rate price undergoes significant changes during the life of the bond.

Bonds are issued as a means to raise capital to finance programs when shareholders seek to increase the volume of operations.

DETERMINING THE YIELD OF BONDS

Bond yield - this is one of the indicators that determine the characteristics of the financial efficiency of investing in a bond in the current period in the form of an annual compound interest rate, taking into account all bond income.

Total bond yield - the ratio of total income (the sum of coupon and additional income) to the purchase price (in percent).

The bond itself certifies and confirms the fact that the owner of the security has provided monetary resources to the issuer; the issuer's obligation to repay the debt; the right of the investor to receive a certain percentage of the nominal value of the bond for the provided monetary resources.

Interest on bonds remains constant or rarely changes. Interest on bonds is paid on time, agreed in advance, regardless of the profit and financial condition of the issuer before the payment of dividends on shares.

Bondholders have a pre-emptive right to distributable profits and assets of the issuer in the event of its liquidation. Interest is paid within a certain period specified in the terms of the loan. The yield level of a bond depends on the interest rate, purchase price and redemption of the bond.

If a bond is purchased at par and redeemed at par, then the yield on such a bond is equal to the interest (coupon) rate.

A bond bought below par and redeemed at or above par has a yield higher than the coupon rate.

If the purchase price of a bond is higher than par, and redemption occurs at par, then such a bond has a yield level below the coupon rate.

If the income is paid once a year, then the investment return (D) is determined by the formula:

D = P / I,

where P - the amount of interest payments in monetary units; I is the purchase price of the bond.

If the bond is paid several times a year, then The investment return for each payment period can be determined by the formula:

D = (P / I) x (365 / T),

where T is the number of days of the paid period.

Bond income is made up of the following sources: interest (coupon income) that is paid periodically; change in the market value of the bond for the period; income received from the reinvestment of previously received interest (subject to its further reinvestment).

THE CONCEPT OF A SECURITIES PORTFOLIO

INCOME AND RISK BY PORTFOLIO

Securities portfolio - a set of securities owned by an investor and managed as a whole to achieve a specific goal. The meaning of the formation of a portfolio of securities is to improve the investment conditions, giving the aggregate of securities such investment qualities that are unattainable from the standpoint of a single security and are possible only with their combination.

When forming a portfolio, an investor must have a selection mechanism for inclusion in the portfolio of certain types of securities and be able to evaluate their investment qualities through the methods of fundamental and technical analysis.

Forming a portfolio and subsequently changing its composition and structure, an investor can use a new investment quality with a given risk / income ratio.

The task of the methods is to find, among the multitude of securities, their totality, in which, investing investment funds, they will not be exposed to high risk. There is a relationship between risk and return on investment: the higher the return, the higher the risk.

According to the degree of risk, investments in the money supply are less risky (risk-free). But these investments are less profitable.

Government securities are next in terms of risk, followed by bank and corporate bonds and stocks.

Among the many banking and corporate stocks, many types of securities can be distinguished according to the degree of risk: from low-risk with low income to high-risk with high income. Shares of banks and corporations are attractive to investors, because they will ensure the growth of income from invested funds, from dividend payments and due to the growth of their market value.

Depending on the riskiness and profitability, aggressive and defensive stocks are distinguished. Aggressive stocks - stocks of developing enterprises pursuing a risky policy. Their cost at the rate can increase several times. Investing in these securities is justified when an investor wants to get a high income in a short time and takes risks for this. Defensive shares include banking and corporate shares of issuers that have established themselves in the stock market, are distinguished by stability, the ability to withstand adverse economic conditions, and whose activities have a fairly long history. Such stocks have a steady rate and regular payment of dividends, therefore they are attractive to investors seeking small but reliable income.

Investments made by investors in securities of different types, different duration and different liquidity, as a whole form a portfolio of securities.

PORTFOLIO TYPES

Portfolio type - its properties based on the ratio of income and risk. An important feature of it is how the income is received: due to the growth of the exchange rate or current payments - dividends, interest.

The types of securities portfolios are classified according to the source of income. A growth portfolio is a company's share capital, the price of which is growing, and the receipt of dividends in a small amount. Aggressive growth portfolio. This type of portfolio is formed by stocks of fast-growing young companies. High degree of risk, but also high income. The portfolio of conservative growth consists of shares of large, steadily developing companies on the market, characterized by high, stable rates of growth in market value.

The composition of the portfolio is stable for a long time, investments are aimed at preserving capital. A medium growth portfolio is a fusion of the investment properties of aggressive and conservative growth portfolios, including long-term stable securities and risky equity instruments. Stability is provided by securities of conservative growth, and profitability - by securities of aggressive growth.

The income portfolio is made up of high current income of interest and dividend payments, is formed from income shares, i.e. shares characterized by a moderate increase in market value and high dividends, bonds and other securities, the investment composition of which is high current payments with a minimum degree of risk. The portfolio of regular income is formed from highly reliable securities in a stable company, brings an average income and constitutes a minimum degree of risk.

The portfolio of income securities is formed from high-yielding bonds of corporations, securities that bring high income with an average composition of the degree of risk. A portfolio of growth and income is compiled to avoid losses in the stock market, i.e. from a depreciation or low dividend and interest payments. The financial assets included in this portfolio bring an increase in capital value to the owner, while others - income. A dual-use portfolio consists of securities that generate high returns on growth of invested capital. These are securities of dual purpose investment funds. Companies issue their own shares of two types, the first bring high income, the second - capital gains. Balanced portfolios are made up of high-yielding stocks and high-yielding stocks. Portfolios include high-risk securities, they are formed from ordinary and preferred shares and bonds.

PORTFOLIO MANAGEMENT

Portfolio management - application of a combination of different types of securities of certain methods and technological capabilities that allow:

1) keep the initially invested funds;

2) reach the maximum level of income;

3) ensure the investment orientation of the portfolio.

The first and one of the most expensive, time-consuming controls is monitoring, which is a continuous detailed analysis of:

1) the stock market, its development trends;

2) sectors of the stock market;

3) financial and economic indicators of the company - the issuer of securities;

4) investment qualities of securities.

Monitoring is the basis for predicting the amount of possible income from investment funds and the intensification of operations with securities. The combination of methods and technical capabilities applied to the portfolio represents a management method that can be characterized as active and passive. Passive management is the creation of well-diversified portfolios with a predetermined level of risk, designed for the long term.

Active portfolio management involves the systematic monitoring and rapid acquisition of those securities that no longer meet the objectives of the investor, as well as the rapid purchase of those securities that have increased their attractiveness in the stock market, and includes: selection of securities that are rational to purchase and low-income for sale; calculation of a new portfolio of securities, its profitability and risk, taking into account the rotation of securities; evaluation of the effectiveness of the old and new portfolios, taking into account the costs of buying and selling securities.

There are two portfolio management options:

1) the investor himself manages the portfolio of securities. To do this, the portfolio owner must create a special structural unit (stock department), which will be responsible for managing the portfolio. The functions of such a department include: defining the goals and type of the portfolio; development of strategy and tactics of securities portfolio management; operational planning of securities within the specified goals of the investor; implementation of operations related to portfolio management; analysis and identification of factors affecting the composition, structure and dynamics of the movement of securities included in the portfolio; adoption and implementation of practical decisions aimed at adjusting the composition and structure of the portfolio;

2) all functions of securities portfolio management are transferred to another legal entity (bank or financial company) in the form of a trust (trust management).

FINANCIAL REGULATION OF PORTFOLIO INVESTMENTS

Investment portfolio - a set of investment values that serve as a tool for ensuring a high level of investment income, the preservation and growth of capital in the future, ensuring the liquidity of the investment portfolio, the acquisition of securities for scarce types of products, raw materials, property and non-property rights, expanding the scope.

Adjusting the portfolio, the investor proceeds from the investment strategy and achieves its liquidity and a low degree of risk. Basic principles of portfolio investment regulation: security, profitability, liquidity of investments, growth.

The stages of investment portfolio regulation are distinguished:

1) selection of the optimal type of securities portfolio for a given type of investor;

2) assessment of an acceptable combination of risk and income by different levels of income in the portfolio. It is decided taking into account the general investment rule: the greater the risk of a security, the more significant income it should bring;

3) assessment of the liquidity of the portfolio is considered from two positions: the ability to quickly convert the portfolio into cash; the ability of the joint-stock company to timely repay its obligations to creditors who participated in the formation of the securities portfolio;

4) determination of the quantitative composition of the portfolio; the investor must determine how many types of securities should be in the portfolio;

5) determination of the initial composition of the portfolio and its possible change taking into account the conditions prevailing on the securities market (demand and supply of stock values). Given stock portfolio structures, an investor can be aggressive or conservative.

Each type of securities is assigned a certain fixed share in the stock portfolio, which is stable. The stock market fluctuates in the price of securities. The investor adheres to a flexible scale of shares of securities in the total portfolio. It is formed from weight ratios between types of values. Subsequently, the weight ratios are adjusted based on the analysis of the business situation in the stock market and changes in demand for securities.

The investor actively uses options and futures contracts to change the composition of the portfolio, changes in prices on the stock market.

In the process of regulating portfolio investments, the goals of the investor may change, this leads to a change in the portfolio. Portfolio renewal comes down to revising the ratio between the return and risk of incoming securities.

In the future, the goal of portfolio investment regulation is to maintain those investment qualities of the investment object for which the securities portfolio was created.

FINANCING OF INNOVATION ACTIVITIES

One way to reduce risk is project financing, which is used in the development of large investment projects.

There are three main forms of project financing:

1) financing with full recourse to the borrower (recourse is a requirement to repay the borrowed amount). There are certain guarantees or limited liability requirements for project lenders. The risks of the project fall on the borrower, but the loan price is low. Such financing is used for low-profit and non-profit projects;

2) financing without the right of recourse to the borrower. The lender has no guarantees from the borrower and bears all the risks associated with the implementation of the project. Here, the loan price is quite high and this form of financing is used for highly profitable projects using the latest technologies, resulting in competitive products;

3) financing with limited recourse. It involves the distribution of project risks among its participants, so that everyone takes on the risks that depend on him. At the same time, project participants are interested in its effective implementation, since their profit depends on it.

Compared to conventional long-term lending, project finance has the following features:

▪ banks, institutional investors and corporations participate in project financing;

▪ several sources of financing can be used:

▪ the degree of risk for the bank in this case is higher, since in the event of bankruptcy of the project it is not possible to make claims to the borrower at the expense of its remaining assets;

▪ analysis of project financing is carried out at a deep level;

▪ risks are redistributed;

▪ the project is monitored by the manager and the project company;

▪ Borrowers benefit from limited liability, but are subject to higher interest rates and fees. There is a risk for the borrower of losing independence in running the project. The advantage of banks is the possibility of tighter control.

The bank's participation in project financing is carried out by parallel and sequential financing. Parallel is divided into independent, when the bank is limited only to financing, and joint, when the bank is a manager for control and settlement. With successive transfer of debt under an assignment agreement and its securitization.

Project financing can be considered as targeted lending, a way to mobilize additional funds and distribute risks, as one of the promising tools for the participation of commercial banks in capital-intensive projects.

OWN SOURCES OF INVESTMENT

Own sources of investment financing are profit and depreciation. To properly distribute profits, you need to have a clear idea of the technical condition of the enterprise. If the enterprise has a low technical level, it is necessary to direct the profit to the renewal of non-current assets (the basis for the production of competitive products and the growth of employees' incomes).

The role of profit depends on the correctness of its distribution to consumption and accumulation. The more it is consumed, the less is left for the development of production. A positive aspect is the implementation of a targeted state tax policy in the field of profit taxation. The income tax rate was reduced from 35% to 24%, which increased the amount of net profit remaining for enterprises and contributed to the formation of their own sources of investment financing.

A reliable source of investment financing available to the enterprise are depreciation charges.

Depreciation - this is the process of transferring the value of fixed assets to manufactured products during their standard service life.

Depreciation methods

Linear method - depreciation is accrued in equal shares over the service life of fixed assets until their cost is completely transferred to production costs. Declining balance method - depreciation charges are determined based on the residual value of fixed assets at the beginning of the reporting period and the depreciation rate. The method of writing off the cost by the sum of the numbers of years of the useful life of an object of fixed assets is depreciation charges of the initial cost of the object of fixed assets and the annual ratio, where the numerator is the number of years remaining until the end of the service life of the object, and the denominator is the sum of the numbers of years of the service life of the object.

The method of writing off the cost in proportion to the volume of products (works) - accrual is based on the natural indicator of the volume of products (works) in the reporting period and the ratio of the initial cost of the fixed asset object and the estimated volume of production (work) for the entire useful life of the fixed asset object.

The depreciation fund should be used for: purchasing new equipment to replace retired equipment; mechanization and automation of production processes; carrying out research and development work; modernization and renewal of manufactured products in order to ensure their competitiveness; reconstruction, technical re-equipment and expansion of production; New construction

INVESTOR LOANS

The attracted funds of investors consist of borrowed funds, bank loans, borrowed funds of other organizations, as well as equity participation in construction, budget and extra-budgetary funds, etc. Investors take into account borrowed funds until they are repaid (repaid), depending on the period of their use. Investors take borrowed funds from the population or directly by selling bonds or resorting to the services of intermediaries - banks.

One of the most common ways to attract borrowed funds is long-term lending of capital investments. Important for the borrower is the level of discount interest, which is determined by the supply and demand for loan capital, the amount of interest on deposits, the inflation rate in the country, and investors' expectations regarding the prospects for economic development.

The interest charged by banks is differentiated depending on the terms and sizes of loans, their security, the form of lending, the degree of credit risk, etc. The need for a long-term loan stems from the discrepancy between the funds available to the enterprise and the need for them to expand production. This enables the borrower to receive money before he can withdraw it from circulation after the sale of the goods. The advantage of this method is related to the repayment of funds, it implies the relationship between the actual payback of capital costs and the return of a long-term loan on time.

Businesses can use the investment tax credit, which is a tax deferral. It can be provided both for the profit (income) tax of the enterprise, and for regional and local taxes. The decision to grant it is made by the federal executive authorities; in the part coming to the budget of the constituent entity of the Russian Federation - by the financial authorities of the constituent entity of the Russian Federation.

The investment tax credit is provided on the terms of urgency, repayment and payment.

Another means of borrowing is the pledge of immovable property for the purpose of obtaining a loan, in which the lender has the right to retain the pledged property in case of non-payment of the debt (mortgage). Mortgage lending is based on traditional principles: urgency, repayment, payment, and special importance is attached to its targeted nature and security.

The debtor receives a loan and has the opportunity to keep the mortgaged property without risking the rest of the property. The lender gets the option of repaying the loan.

Mortgaged real estate can continue to generate income: to be rented out, used as a production facility, etc.

SPECIAL FORMS OF FINANCING INVESTMENT PROJECTS (LEASING AND FORFEITING)

Leasing and forfaiting are special forms of financing investment projects.

Leasing - a complex of property relations that develop during the transfer of property for temporary use. This complex also includes other contracts: a contract of sale, a loan contract. But relations on the transfer of property for temporary use are decisive in relation to the rest.

Leasing is divided into types:

1) financial leasing (leasing with full amortization) - the lessor undertakes to acquire ownership of the property indicated by the lessee from a certain seller and transfer this property to the lessee as a leased asset for a certain fee, for a certain period and under certain conditions for temporary possession or use. At the same time, the period is commensurate in duration with the period of full depreciation of the leased asset or exceeds it;

2) operational leasing - the lessor purchases property at his own risk and transfers it to the lessee as an object of leasing for a certain fee, for a certain period and under certain conditions for temporary possession or use. The term for which the property is leased is established on the basis of a lease agreement.

3) leaseback - the seller of the leased asset also acts as a lessee. The owner of the equipment sells it to a leasing company and leases the equipment from him. The seller becomes a tenant. Leaseback is used when the owner of the object of the transaction is in dire need of money and with the help of this form of leasing improves his financial condition.

Forfaiting - a certain form of lending to trade operations. The main condition of forfaiting is that all risks under the debt obligation are transferred to the forfaitor without the right of turnover to the seller of the obligation. The forfaiter purchases debt claims from the exporter at a discount, the amount of which depends on the solvency of the importer, the term of the loan, market interest rates in a given currency, etc. But forfaiting is more expensive than a bank loan. The seller in forfaiting is the exporter who has fulfilled the obligations under the contract and seeks to collect the importer's settlement documents in order to receive cash, relieve himself of credit risk and improve his liquidity, freeing the balance from part of the receivables.

In contrast to the accounting of bills by commercial banks, forfaiting determines the transfer of all types of risk on a debt obligation to the buyer of the bill - the forfaiter. The advantages of forfaiting are a stable lending rate and a simple procedure for assigning promissory notes.

BUDGET FINANCING OF INVESTMENTS

Budget funds are considered to be a progressive mechanism for the centralized influence of the state on the paths and rates of development of national economies. The instruments of the state are: tax, budgetary mechanisms, monetary policy.

Tax incentives free up investments for enterprises that are necessary to accelerate development - replenishment of fixed and working capital. Centralized procurement and financing accelerate the implementation of large investment projects, improve socio-economic infrastructure, and accelerate scientific and technological progress by financing scientific and educational institutions. Monetary policy regulates the money supply in the economy, significantly influencing the pace of its development, the value of interest rates, the exchange rate of the national currency.

Financing from the budget is inherent in the principles:

▪ maximum economic and social effect with minimum costs. Budgetary funds should be provided if the relevant project provides the greatest impact;

▪ targeted use of budget resources;

▪ provision of budget funds to business entities to the extent that the plan is fulfilled and taking into account the use of previously allocated appropriations.

Budget financing can be returnable and irrevocable. Irrevocable financing is carried out with the aim of developing new areas of production activity. Budgetary funds are directed to the implementation of conversion, defense, environmental and other facilities that are not designed for commercial return or its quick receipt.

Return financing is focused on the commercial effect of the ongoing investment project. Any support from the state is needed in the early stages of the project. Therefore, returnable budgetary financing is represented by a system of benefits (tax, credit), which are of a temporary nature. Favorable indicators of the development of society and economic relations depend on the growth of effective investment investments that create competition. Therefore, a base of methods is needed, which is focused on increasing the efficiency of investments in the real sector of the economy.

The efficiency of investment investments is ensured by the acceleration of their turnover, the reduction of their costs and the increase in useful returns. But not all of these investment efficiency drivers are favorable under the same conditions. For example, the possibility of a quick turnover of invested funds appears in the non-productive sphere (commerce, etc.). Although the creation of competition, the growth of production and volumes, the improvement of the living standards of citizens determine the essence of the effectiveness of investments.

THE ROLE OF POPULATION INCOME AS A SOURCE OF INVESTMENT FINANCING

The traditional and proven source of loans is the savings of the population. The financial assets of the population, as part of the wealth of the family, are formed from savings - the unused part of the income of individuals or families. Being a deferred consumption, the accumulated amount of monetary assets forms the investment potential of the state, and its active attraction as investments in the economy is one of the main prerequisites for ensuring economic growth.

The income received by the population is used for final consumption (purchase of necessary goods and services, payment of mandatory payments, etc.) and savings. The savings of the population in Russia is traditionally carried out in the form of accumulation of cash (“on hand”) and bank investments, both of these forms being carried out both in national and foreign currencies. In addition, individuals have the opportunity to place free funds in securities of the state and private companies or make insurance premiums. Each type of savings has its advantages and disadvantages, is associated with risks of varying degrees and is associated with the receipt of a particular income. The task of an organization that hosts free funds of citizens is to obtain the maximum profit from the provision of services for the placement of funds and their possible use. In addition, the state must create such conditions under which it would be possible to use the savings of citizens as financial resources for lending to the economy.

Incomes of the population and their impact on the investment process can be considered in two aspects:

▪ as a source of investment financing, as investment development potential, which, by creating a certain reserve for economic growth, affects the level and quality of life of the population;

▪ as a potential opportunity for growth in consumer spending.

When it comes to the investment process, attention is paid to investments, their sources, but their connection with consumption, its dynamics, and the social development of society are not taken into account.

The growth of monetary incomes of the population contributes to the expansion of the growth of household demand for the purchase of goods and services, stimulating the development of domestic production. Therefore, such an aspect as the role of the financial assets of the population in the current turnover of their income is important. The incomes of the majority of the population are so low that they can only afford one set of living wages. Therefore, in the current situation, families more often used previously deferred savings than replenished them.

FOREIGN INVESTMENTS

Foreign investment allocate:

1) state foreign investments carried out by state budgets (state loans, loans, grants, financial assistance);

▪ private foreign investment - investing funds of foreign investors in investment objects located outside the country;

▪ mixed foreign investments - investments made outside the country jointly by the state and private investors.

Direct foreign investment the acquisition by an investor of at least 10% of a share, shares (contribution) in the authorized (share) capital of a commercial organization created or newly created on the territory of the Russian Federation in the form of a business partnership or company in accordance with the law of the Russian Federation is considered; investment of capital in fixed assets of a branch of a foreign legal entity created on the territory of the Russian Federation; leasing of equipment with a customs value of at least 1 million rubles on the territory of the Russian Federation by a foreign investor.

Portfolio foreign investments - investments of capital in shares that do not give investors the right to influence the activities of the enterprise, constituting less than 10% of the total share capital; investments in bonds, bills, other debt obligations, state and municipal securities.

Other investments include deposits in banks, commodity loans, etc.

Among the listed types of investments, priority is given to foreign direct investment, as they have a beneficial effect on the development of the country's economy:

▪ contribute to the growth of investment activity in the country;

▪ stimulate investments in the renewal and development of core production;

▪ promote the introduction of advanced management, achievements of science and technology into production;

▪ activate competition and stimulate the development of small and medium-sized businesses;

▪ ensure growth in employment and increase in income of the population;

▪ ensure an increase in tax revenues to the budget of the host country, etc.

Despite the efforts of the Russian Federation, the state of the investment climate in the country cannot be considered attractive for foreign investors. The investment attractiveness of the Russian economy for foreign investors is provided by many qualitative parameters:

▪ an extensive national market, a wide variety of capital investment objects, and economic growth that has begun in the country;

▪ availability of highly qualified and relatively cheap labor;

▪ the presence of a variety of rich natural resources;

▪ reforming the taxation system in terms of reducing the tax burden, etc.

LONG-TERM LENDING

Long-term bank lending is carried out on the principles of:

1) repayment, obligatory payment to the creditor of the amount of the principal debt on the agreed terms;

2) payment for a bank loan, based on the reimbursable nature of the services provided by banks in lending. Interest is charged for a bank loan. The interest rate is set by the parties under the loan agreement;

3) urgency, predetermined terms for the return of borrowed funds to the creditor. The term of the loan is the maximum time the loan funds are at the disposal of the borrower.

The collateral is realized with the help of a pledge, bank guarantees, insurance and methods provided by law and the agreement between the partners.

The fulfillment of the main obligation is supported by: a pledge, a penalty, a bank guarantee, a surety, a deposit.

Bail - the right of the creditor to receive compensation from the value of the pledged property to other creditors.

Surety. The guarantor undertakes to be responsible to the lender for the fulfillment by the borrower of his obligations in whole or in part. Guarantees are provided by legal entities and individuals. A surety agreement is signed between the guarantor and the creditor bank.

Penalty is the amount of money that the debtor is obliged to pay to the creditor in case of default. The penalty is set as a percentage of the amount of untimely fulfillment of the obligation for each day of delay.

Deposit - the amount of money issued by one of the contracting parties on account of payments due from it under the contract to the other party as evidence of the conclusion of the contract and to ensure its execution.

Prepaid expense - the amount of money that is transferred on account of the fulfillment of a contractual obligation. The advance is taken into account against the final payment stipulated by the contract.

Detention of the debtor's property. The creditor who has the thing to be transferred to the debtor has the right to retain it until the corresponding obligation is performed by the debtor.

The form of loan security is the bank's requirement to keep without using a certain part of the loan received (10%) in the form of a compensatory balance of money on the company's current account.

For the enterprise-investor, the value of the interest rate on the loan matters. The interest rate for a loan differs in forms, types and sizes. The credit rate can be fixed (constant) and floating (changing).

The type of credit rate (interest and discount) affects the cost of a bank loan. If the size of these rates is the same, then the use of the interest rate will be more preferential than the discount rate.

INVESTMENT TAX CREDIT

To finance investment projects, enterprises can use an investment tax credit, which is a tax deferral. An investment tax credit can be granted on the profit (income) tax of the enterprise and on regional, local taxes. The investment tax credit is provided on the terms of urgency, repayment and payment. The term for granting an investment tax credit is from 1-5 years. Interest for using an investment tax credit is set at a rate of 50-75% of the refinancing rate of the Central Bank of the Russian Federation.

The tax credit is provided for the following purposes:

1) to carry out scientific, technical and development work or technical equipment of own production. In this case, an investment tax credit is provided in the amount of 30% of the cost of equipment used for present purposes;

2) for the implementation of promotional or innovative activities, the creation of new or modernization of applied technologies, the creation of new types of raw materials or materials;

3) for the organization to carry out a particularly important order for the socio-economic development of the region or to provide it with particularly important services to the population.

In the last two cases, the amount of the investment tax credit is determined by agreement between the taxpayer and the authorized body. An investment tax credit is provided based on an application from the borrower's enterprise and the necessary documentation confirming the need for the loan.

If a positive decision is made, an agreement on an investment tax credit is concluded between the authorized body and the taxpayer organization. Its form is established by the executive authority that makes the decision to allocate a loan.

The investment tax credit agreement provides for: the duration of the agreement; amount of credit; interest rate for using credit resources; the procedure for repaying the loan and accrued interest on the loan; conditions for ensuring repayment of the loan (collateral or guarantee agreement); liability of the parties; procedure for terminating the contract.

A copy of the concluded investment tax credit agreement shall be submitted by the taxpaying organization to the tax authority at the place of its registration within five days. A taxpaying organization can simultaneously receive several investment tax credits if the investment projects it implements meet the requirements. The presence of an investment tax credit cannot serve as a basis for refusing to receive a new one.

METHODS AND SOURCES OF FINANCING INVESTMENT PROJECTS

Today, the main sources of investment financing are: net profit of enterprises; depreciation deductions; on-farm reserves; funds accumulated by the banking system and specialized non-bank financial institutions; funds received in the form of loans and borrowings from international organizations and foreign investors; funds received from the issue of securities; funds from budgets of various levels, etc.

Sources of financing investment projects:

1) centralized (budgetary) - funds of the federal budget, budgets of subjects of the Russian Federation and local budgets;

2) decentralized (non-budgetary), these include:

▪ own financial sources of investment. The main own sources of financing investments are net profit and depreciation charges;

▪ borrowed sources, which include: loans from banks, credit organizations; funds from the issue of bonds; tax investment credit; funds received in the form of loans and borrowings from international organizations and foreign investors.

Depending on the economic content, all sources of financing investment projects can be classified as follows:

1) own funds of enterprises and organizations: profit; depreciation deductions; on-farm reserves; funds paid by social insurance bodies in the form of compensation for losses from accidents, etc.;

2) borrowed and attracted extra-budgetary sources: loans from commercial banks; funds received from the issue of securities; fixed assets and equipment received under leasing; foreign investment; funds from extrabudgetary funds; funds raised under production sharing agreements, etc.;

3) borrowed and attracted budgetary sources: allocations within the framework of the implementation of state targeted programs; funds allocated from the development budget; investment tax credits provided by the state.

Methods of financing investment projects

Venture (risk) capital - a form of capital investment in investment objects with a high level of risk, counting on the rapid receipt of a high rate of return.

Project Finance - financing of investment projects, characterized by a method of ensuring the return of investments, which is based on income that will be received in the future from the implementation of an investment project.

MORTGAGE CREDIT LENDING

Mortgage - pledge of real estate for the purpose of obtaining a loan, in which the lender has the right to retain the pledged property in the event of non-payment of the debt. Mortgage lending is based on traditional principles: urgency, repayment, payment, special importance is attached to its targeted nature and security.

Mortgages - land plots, enterprises, buildings, structures and other real estate used in business activities, residential buildings, apartments and parts of residential buildings and apartments, summer cottages, garden houses, garages and other consumer buildings, aircraft and sea vessels, inland navigation vessels and commercial properties.

These credit relations are common in countries with market economies. Because a mortgage reduces the risk for both parties. The debtor receives a loan for a long period, has the opportunity to keep the mortgaged property without risking the rest of the property. The lender gets a win-win option to repay the loan. Mortgaged real estate can generate income: rent out, be used as a production facility, etc.

The relationship between the debtor and the creditor depends on how the mortgage agreement is concluded. In the Russian Federation, it is established that a mortgage agreement must be notarized and subject to state registration. The state registration of a mortgage agreement is the basis for making a mortgage entry in the Unified State Register of Rights to Real Estate and Transactions Therewith. After the state registration of the mortgage, the registration authority issues a mortgage bond to the initial mortgagee.

A mortgage bond is a registered security certifying the right to receive performance on a monetary obligation secured by a mortgage, without presenting other evidence of the existence of this obligation, the right to pledge property encumbered with a mortgage. It defines the rights and obligations of the parties; provisions related to violations of the terms of the loan; the amount of tax, insurance and other payments made by the borrower. It deals with the procedure for the sale and alienation of the pledged property, the transfer of the mortgage to a third party.

An important point is the valuation of the property offered as collateral, since the calculations on the solvency of the debtor may not be justified, then the bank will be forced to turn to the value of the collateral to pay off the debt. The principal amount of debt under a mortgage-secured obligation under an agreement or mortgage must not exceed 70% of the market value of the immovable property that is the subject of the mortgage.

MOBILIZATION OF FUNDS BY ISSUING SECURITIES

Issue of securities represents the issuance of shares, bonds and other financial instruments carried out by joint-stock companies in the process of their establishment, as well as when increasing their authorized capital or attracting additional financial resources.

Securities are issued for the following purposes:

1) for the establishment of a JSC and the full placement of shares among its founders;

2) to increase the size of the initial authorized capital (fund) of the joint-stock company by means of an additional issue of shares;

3) to mobilize borrowed capital by legal entities, the state and its bodies by issuing bonds and other debt obligations.

Issuable security - any security, including non-documentary, which is simultaneously characterized by the following features:

1) fixes the totality of property and non-property rights subject to certification, assignment and unconditional exercise in compliance with the form and procedure established by law;

2) is placed in issues;

3) has equal volumes and terms of exercising rights within one issue, regardless of the time of purchase of the security.

Issuer - a legal entity or bodies of executive power or bodies of local self-government, bearing obligations on their own behalf to the owners of securities to exercise the rights enshrined by them.

Decision to issue securities - a document registered with the state securities registration authority and containing data sufficient to establish the scope of rights secured by the security.

Stages of issue of securities

Stage 1 - adoption by the issuer of a decision on the issue of emissive securities.

Stage 2 - registration of the issue of emissive securities.

Stage 3 - production of certificates of securities (for documentary issues).

Stage 4 - placement of equity securities.

Stage 5 - registration of a report on the results of the issue of emissive securities.

When issuing securities, registration of the issue prospectus is carried out when issuing securities are placed among an unlimited number of owners or a previously known group of owners, the number of which exceeds 500, and also in the case when the total issue volume exceeds 50 thousand minimum wages.

When registering an issue of emissive securities, this issue is assigned a state registration number. The procedure for assigning a state registration number is established by the registering authority.

SHAREHOLDERING

The stock is attractive not only as an investment object. It provides certain benefits to the one who puts it into circulation (the issuer). Therefore, today one of the most common forms of raising capital is corporatization. A joint-stock company is not obliged to return to investors the capital invested in the purchase of shares.

A share is a perpetual security that the issuer is not required to redeem. When issuing shares, the issuer does not assume any financial obligations. Equity financing provides an opportunity to expand share capital on a long-term basis.

A joint stock company does not guarantee the payment of dividends to its shareholders. Without net profit, a joint stock company has no source for paying dividends. The meeting of shareholders may decide to use all the net profit of the current year for the development of production, and postpone the payment of dividends. But we must keep in mind that long-term non-payment of dividends on shares leads to a decrease in the share price and a fall in the market value. The amount of dividends on shares is set arbitrarily (as a percentage), regardless of the amount of profit used to pay them. Therefore, the absolute value of dividend payments will be different. The placement of shares, unlike a loan, does not require the use of collateral or guarantees.

An effective emission policy goes through several stages:

1) the issuer explores the possibilities of their effective placement. It is necessary to investigate the state of supply and demand for shares, the dynamics of the price level, their quotes, sales volumes of shares of new issues and other indicators. An assessment is made of the investment attractiveness of their shares in terms of the prospects for the development of the industry, the competitiveness of their products, the dynamics and level of indicators of their financial condition;

2) the purpose of the issue should be significant in the investment strategy of the enterprise, since it is necessary to pay for raising capital;

3) the volume of emission is determined based on the calculated need to attract own financial resources from external sources;

4) rapid mobilization of equity capital through the issue of shares is possible when they are attractive and accessible to investors;

5) assessment of the cost of the equity capital involved.

The estimated cost of the attracted capital is compared with the actual cost of capital and the average level of loan interest, then a decision is made on the appropriateness of the issue.

The placement of shares can be closed (among previously known investors) and open (effective forms of underwriting).

LEASING. TYPES AND BENEFITS

Leasing - property relations arising in connection with the transfer of property for temporary use.

Types of leasing (rent)

financial leasing - the lessor undertakes to acquire ownership of the property indicated by the lessee from the seller and transfer the property to the lessee as the subject of leasing for a certain fee, on time and on conditions for temporary use. Its term is commensurate with the term of full depreciation of the leased asset or exceeds it. The object of leasing becomes the property of the lessee upon the expiration of the agreement or subject to the payment by the lessee of the full amount stipulated by the leasing agreement, unless otherwise provided by the leasing agreement.

Operational leasing - the lessor purchases property at his own risk and transfers it to the lessee as a subject of leasing for a certain fee, for a period and on conditions for temporary use. The term is set on the basis of the lease agreement. Upon the expiration of the term of the leasing agreement and subject to payment by the lessee of the full amount, the object of leasing is returned to the lessor.

Return lease - the owner of the equipment sells it to a leasing company and leases this equipment from him. The seller becomes a tenant.

Advantages of leasing: receiving equipment for use without its full payment; sample of equipment before acquiring it; the tenant does not attract borrowed capital; a wide range of services for the maintenance of purchased equipment; compared to lending, a more flexible procedure for leasing payments is provided; provides tax benefits to both the lessor and the lessee; relieves the tenant of the procedures and costs associated with the ownership of the property, since the lessor remains the legal owner; the lessee benefits by purchasing the equipment at par or residual value at the end of the lease term; aimed at accelerating the renewal of machinery and production technology.

Disadvantages of leasing: gives the tenant a temporary right to use the equipment; shortfall in income in the form of liquidation value of fixed assets; may be more expensive than a bank loan; an increase in the cost of production; the implementation of accelerated depreciation is carried out with the consent of the lessor, limiting the ability of the enterprise to form its own resources; the impossibility of modernizing the used property without the consent of the lessor; losses of the lessee as a result of inflation are possible.

VENTURE FINANCING

One of the main sources of financing for innovative projects is venture capital.

Venture (risk) capital - a form of capital investment in investment objects with a high level of risk, counting on the rapid receipt of a high rate of return. Venture capital is formed to finance venture companies, which are business cooperation between the owners of the company and the owners of venture capital to implement projects with a high degree of risk in order to obtain significant (above the market average) income.

Venture financing consists of financing investments in new areas of activity, so it is accompanied by high risk in exchange for generating significant income.

A venture enterprise is an enterprise whose activities are related to the development of new types of products, services, technologies that are unknown to the consumer, but have a great market potential, which is associated with a high degree of risk of their promotion on the market. However, the innovation of their activities provides a high income.

Venture financing is based on a preliminary assessment of the investment project, the activities and financial condition of the company implementing this innovative project. Venture financing is carried out in the form of corporatization.

Venture funds are created to finance ventures. The investment resources of a venture fund are intended for venture capital companies that have a high chance of growing into large profitable enterprises. These chances come with high risk. Therefore, a venture fund is characterized by the distribution of risk between project initiators and investors.

One of the main ways to protect against investment risks is insurance. This applies to venture capital as well. The mechanisms for organizing insurance and guarantees of attracted investment resources for venture projects include the creation of a system of state risk insurance for venture investors.

The main principles of the venture fund are:

1) creation of a venture capital fund in the form of a partnership, in which the organizer is fully responsible for the use of the funds of the fund. For this, a business plan is being developed;

2) placement of venture fund funds for various projects with a risk degree of not more than 25% and with a return on investment period not exceeding 3-5 years;

3) "exit" of venture capital from a venture enterprise by turning it into an open joint-stock company with the placement of shares of a venture enterprise on the stock exchange or their sale to a large corporation.

MODE OF FUNCTIONING OF FOREIGN CAPITAL IN THE RUSSIAN FEDERATION

Depending on the form of ownership, there are:

1) state foreign investments carried out by state budgets in the form of state loans, loans, grants, financial assistance;

2) private foreign investment - the investment of foreign investors in investment objects located outside the country;

3) mixed foreign investments - investments made outside the country jointly by the state and private investors.

Foreign direct investment leads to: growth of investment activity in the country; investments in renovation and development of core production; introduction of advanced management, achievements of science and technology into production; competitive activity, development of small and medium-sized businesses; growth in employment and income; growth of tax revenues to the budget of the host country, etc.

The volumes and structure of foreign investments are determined by a combination of social, organizational, legal, political and other conditions that determine the attractiveness and expediency of investing in the country's economy and are its investment climate.

When evaluating the investment climate of a country, it is necessary to take into account:

▪ the ongoing state investment policy in the country (scale of state support, stability of political power, compliance with guarantees and agreements);

▪ economic situation in the country: dynamics of GDP, inflation, volumes of industrial production, situation on the labor market, development of monetary, financial, budgetary, tax systems, etc.;

▪ stability of the regulatory framework regulating investment activities in the country, etc.

This is necessary to assess the level of investment risk that a foreign investor will take when investing capital, to assess the feasibility, attractiveness and profitability of future investments.

Investment unattractiveness in the Russian Federation is characterized by:

▪ economic and investment crisis;

▪ the credit and banking system is at the stage of development;

▪ insufficient development of infrastructure;

▪ differences in regional implementation of investment policy, etc.

Investment attractiveness in the Russian Federation is characterized by: an extensive national market, a variety of capital investment objects, which began in the country with economic growth; availability of highly skilled and relatively cheap labor force; the presence of a variety of rich natural resources; reforming the taxation system in terms of reducing the tax burden, etc.

EXTRABUDGETARY FUNDS

Many concepts reveal the essence and significance of extrabudgetary funds. The most common are the following.

Extrabudgetary funds - these are state funds that are not included in the state budget and are used for a specific purpose (for example, a state pension fund, an employment fund, a state insurance fund).

Extrabudgetary funds - funds at the disposal of institutions and organizations allocated not from the federal (local, republican) budget, but formed from other sources. These are funds that are at the disposal of institutions, organizations, firms and corporations, are allocated not from the federal (local) budget, but are formed from other sources.

Extrabudgetary funds can be classified into special deposits and others. Special extra-budgetary funds include income that belongs to institutions of buildings, premises, are taken into account from the operation of vehicles, from the production activities of educational workshops and ancillary enterprises, proceeds from entrance fees to museums and exhibitions, fees for design expertise, consideration of cases in departmental arbitration, etc. .

Deposits - these are funds that come into the temporary disposal of a budgetary institution (deposit, amounts on unresolved court cases). Upon expiration of the deadlines, unclaimed deposits are credited to the budget.

Other extra-budgetary funds include: amounts on orders (funds from subordinate organizations for the centralized purchase of literature, materials, equipment), parental contributions for the maintenance of children in preschool institutions, amounts under contracts for research work, etc.

The cash fund, formed outside the federal budget and the budgets of the country's constituent entities, is used to provide pension benefits, social insurance in case of unemployment, health care and medical care.

Extrabudgetary funds can be attracted from various sources:

▪ estimates for design work and estimate documentation for objects are checked;

▪ funds are raised from individuals and organizations for the construction of social facilities and improvement;

▪ funds from organizations are attracted to implement the dilapidated and emergency housing program;

▪ strengthening of control over the constant payment of payments by enterprises using natural resources and the accrual of penalties for their delay are being introduced;

▪ concert activities of musical groups and festive and anniversary events;

▪ sponsorship funds.

A number of measures are being taken to save them. Many extrabudgetary funds are deducted for space activities.

INVESTMENT RISKS

Investment risk - this is the risk of depreciation of capital investments due to the actions of state authorities and management. The purpose of investment portfolio management is to increase its market value. An important criterion for selecting portfolio shares is the level of return on shares. But a high expected return is associated with a high risk of not receiving it or the risk of losing the invested capital. When managing an investment portfolio, a full assessment of its level of risk is carried out, then the level of profitability of the investment portfolio is planned.

Classification of investment risks:

1) systematic (market) risk: the risk of changes in the interest rate; currency risk; inflation risk; political risk;

2) non-systematic risk: industry risk; business risk; credit risk.

Systematic (market) risk called the risk arising from external events that affects the market as a whole:

▪ interest rate risk - the risk associated with a change in the interest rate by the country's central bank. When the interest rate decreases, the cost of loans that companies receive decreases and their profit growth increases, which is favorable and promising for the stock market. Conversely, an increase in the interest rate negatively affects the market;

▪ inflation risk - this type of risk is caused by rising inflation. It reduces the true profit of companies, which negatively affects the market, and also causes the emergence of another risk - the risk of changes in the interest rate;

▪ currency risk - the risk arising due to political and economic factors taking place in the country;

▪ political risk - this is the threat of a negative impact on the market due to political actions (change of government, war, etc.).

Here, it is important for the investor to evaluate not so much the risk of each security as the entire market risk. Systematic risk cannot be mitigated by diversifying stocks, since the different types of risks included in it affect all stocks at the same time.

Unsystematic risk, or the risk that can be reduced through diversification, is determined by events affecting only one given firm.

Unsystematic risks include:

▪ industry risk - the risk associated with the influence of industry-wide factors on the company;

▪ business risk - the risk associated with production efficiency and its management by the management of this company;

▪ credit risk arises when capital or part of it is formed at the expense of debt obligations (for example, when a credit rating is lowered and the prices of corporate bonds placed on the market are caused to fall, and also entails an increase in the cost of a bank loan).

METHODS FOR ASSESSING INVESTMENT RISKS

Statistical analysis - the level of risk is measured by two criteria: the average expected value (variance) and the variability (variation) of the possible result. Dispersion measures the possible average outcome, variation shows the measure or degree of deviation of the expected average from the actual average. Factor analysis of financial risks. The coefficients of business activity and financial stability are calculated, and the probability of bankruptcy is determined.

Method of expert assessments - here comparative characteristics of the level of risk are compiled, ratings are determined, analytical expert reviews are prepared.

Economic-mathematical modeling - a selection of criteria (target function) and factors (system of restrictions) is made, related to the strategic goal of the issuer or investor carrying out the modeling, the main thing is to make the right choice of model based on the situation. It is the models that make it possible to predict a specific situation and assess the possible probability of financial risk.

The method of socio-economic experiment is to conduct individual experiments on typical financial situations. Its disadvantages are the atypical nature of many financial situations, which makes it difficult to extend conclusions to many specific cases of the financial life of an enterprise.

analogy method. Specialists, financial managers, on the basis of publications or the practice of other enterprises, evaluate the likelihood of certain events, obtaining a specific financial result, and the degree of financial risk. It must be taken into account that each enterprise has a large number of peculiarities inherent in it alone in terms of personnel, raw materials, industry character. Risk assessment is based on a combination of scientific methods and intuition of experts and analysts. It is based on taking into account a large number of conflicting factors, the use of various theoretical approaches and knowledge of practice precedents. Systematic risk is accurately predicted by fundamental market research methods. Market analysis involves tracking the current state of the market and forecasting its development. Observation, evaluation and identification of market development trends are united by the concept of "monitoring".

Fundamental methods are used in long-term forecasting and are based on the analysis of a set of macroeconomic indicators. They are developed and used by market forecasting services created at research institutes and universities, commodity and stock exchanges.

CAPITAL INVESTMENTS, STATE GUARANTEES AND PROTECTION

The basis for the implementation of capital construction are capital investments.

They are directed to:

▪ for new construction;

▪ reconstruction and modernization of an existing enterprise;

▪ technical equipment of production;

▪ expansion of an existing enterprise or any other facility;

▪ other purposes.

The state guarantees:

1) ensuring equal rights in the implementation of investment activities;

2) publicity in the discussion of investment projects;

3) the right to appeal to the court decisions and actions (inaction) of state authorities, local governments and their officials;

4) protection of capital investments.

Stability for an investor implementing an investment project, conditions and regime is guaranteed during the payback period of the investment project, but not more than seven years from the date of commencement of financing of the specified project. In some cases, when an investor implements an investment project in the field of production or creation of transport or other infrastructure, the payback period of which exceeds seven years, the Government of the Russian Federation decides to extend the conditions and regime for the period specified by the investor.

Government of the Russian Federation:

▪ establishes criteria for assessing changes in unfavorable conditions for the investor in terms of collection of import customs duties, federal taxes and contributions to state extra-budgetary funds, the regime of prohibitions and restrictions regarding capital investments in the territory of the Russian Federation;

▪ approves the procedure determining the start date of financing an investment project with the participation of foreign investors;

▪ approves the procedure for registering investment projects;

▪ controls the investor’s fulfillment of his obligation to implement the investment project on time.

In case of non-fulfillment of obligations by the investor, he loses benefits. The amount of money not paid as a result of the provision of these benefits is subject to return.

Protection of capital investments

Capital investments can be:

▪ nationalized subject to preliminary and equivalent compensation by the state for losses caused to subjects of investment activity;

▪ requisitioned by decision of state bodies in cases, in the manner and under the conditions determined by the Civil Code of the Russian Federation;

▪ insurance of capital investments is carried out in accordance with the legislation of the Russian Federation.

SOURCES OF FINANCING OF CAPITAL INVESTMENTS

These include funds accumulated in trust funds, in the accounts of enterprises and allocated for capital investments: during the construction of facilities - to pay for design and survey, construction and installation work, and the purchase of equipment; when purchasing objects to pay their price.

Financing of capital investments is made at the expense of:

1) the investor's own financial resources and on-farm reserves (profits, depreciation of accumulated funds and savings of citizens, legal entities, insurance funds (compensation for losses from fires, natural disasters, etc.));

2) borrowed finance of the investor or his funds (bond loans, etc.);

3) attracted financial resources of investors (sale of shares, share contributions of members of labor collectives, citizens, legal entities);

4) financial resources provided by organizations, namely unions of enterprises;

5) off-budget funds and their funds;

6) the federal budget and its funds provided on a non-refundable and reimbursable basis, and funds from the budgets of the subjects of the Russian Federation;

7) foreign investors and their funds.

Capital investment and its financing for construction projects can be carried out both at the expense of one and at the expense of several sources.

The borrowed funds of organizations that finance capital investments include: loans from banks and investment funds, companies, insurance companies, pension funds, etc.; loans from foreign investors; bond loans; bills.

Financing methods:

1) centralized;

2) decentralized.

The centralized method - the federal budget, the budgets of the constituent entities of the Federation, centralized extra-budgetary investment funds, etc., act as a source of financing for capital investments.

Decentralized method - the source is the sources of enterprises and individual developers.

At the enterprise, the main sources of financing are: profit remaining at the disposal of the enterprise; depreciation deductions; funds received from the issue and sale of shares; commercial bank loans; sources of higher organizations; funds of foreign investors, etc. But the main sources of financing capital investments are profit on accumulation and depreciation.

Major changes have now taken place in the area of capital investment financing. The ratio between centralized and decentralized sources of financing capital investments has changed: the share of centralized ones has greatly decreased, while the share of decentralized ones has increased. In the transition to market relations, this phenomenon is considered natural.

DEMORTIZATION OF FIXED ASSETS AND METHODS OF ITS ACCRUATION

Depreciation of fixed assets - an indicator that reflects information on the amount of depreciation charges accumulated during the operation of fixed assets. Depreciation of fixed assets for accounting purposes is carried out in one of four ways to account 02.

The leased property is listed on the lessor's balance sheet, so the lessor charges depreciation charges. The cost of fixed assets is repaid by depreciation. One of the ways to calculate depreciation for a group of homogeneous items of fixed assets is made during the useful life of the items included in this group.

In addition to writing off the value of fixed assets through depreciation, it is provided that fixed assets worth no more than 10 rubles. per unit or another limit established in the accounting policy based on technological features, as well as purchased books, brochures and similar publications, it is allowed to write off production costs (sales expenses) as they are put into production or operation. In order to ensure the safety of these objects in production or during operation in the organization, it is necessary to organize control of their movement.

Depreciation methods

With the linear method, the annual amount of depreciation is determined based on the original cost or current (replacement) cost (in case of revaluation) of an object of fixed assets and the depreciation rate calculated based on the useful life of this object.

The reducing balance method for determining the useful life is established in the case when the efficiency of using an item of fixed assets decreases with each subsequent year.

The method of writing off the cost by the sum of the numbers of years of useful life. With this method, the annual depreciation rate is determined based on the initial cost of the fixed asset and the annual ratio, where the numerator is the number of years remaining until the end of the life of the object, and the denominator is the sum of the numbers of years of the useful life of the object.

With the method of writing off the cost of a fixed asset in proportion to the volume of products (works, services), depreciation is charged based on the natural indicator of the volume of products (works) in the reporting period and the ratio of the initial cost of the fixed asset and the estimated volume of products (works) for the entire useful life of the object fixed assets.

FINANCIAL AND INDUSTRIAL GROUPS

Financial-industrial groups (FIGs) are legal entities operating in the form of main and subsidiaries or combining their assets for the purpose of technological or economic integration for the implementation of investment and other projects that increase competitiveness and expand markets for goods and services, production efficiency, creating new workplaces.

FIGs are registered officially, but there is a significant number of informal FIGs.

Differences between industrial and banking FIGs:

1) most industrial FIGs are officially registered, while most banking FIGs are informal. The founders of industrial financial and industrial groups were former Soviet industrial ministries or large industrial companies. Informal financial and industrial groups formed around large banks and gradually changed their activities to a greater extent. Initially, they concentrated their efforts in certain industries (for example, Inkombank focused on the food industry, AlfaBank on construction and the food industry). However, at the second stage of privatization, banks entered into profitable deals regardless of whether they previously controlled enterprises in the relevant industries (in particular, all large financial and industrial groups acquired oil companies);

2) degree of integration. In informal groups, it is based on cross-ownership, and the direction of activities of members of officially registered groups is carried out through long-term contracts. Integration in officially registered groups is shallow. Instead of a mutual exchange of shares, their members enter into cooperation agreements that help them direct their activities and ensure interest in the results of each other's business activities.

Classification of financial and industrial groups:

▪ vertically integrated;

▪ horizontally integrated;

▪ diversified.

32% of officially registered FIGs are vertically integrated, 26% are horizontally integrated, and 42% are the latter. We classified as members of informal FIGs companies whose main shareholders are large banks, oil and trading companies.

On the basis of information about the ownership structure, informal FIGs are divided into:

▪ on banking groups (where the central role in implementing integration belongs to the largest Russian banks);

▪ industrial groups, or holding-type structures;

▪ groups coordinated by regional administrations.

THE CONCEPT OF REAL ESTATE

In the real estate market, the rights to real estate objects act as goods. To create a real estate market, you must first legally form real estate.

That is, to create a cadastral file for each real estate object with subsequent state registration of rights to real estate.

The state guarantees the rights to real estate, and they become a commodity only after their state registration in one of the real estate cadastres or registers. A lease agreement for a land plot is concluded on the basis of a cadastral file. Otherwise: you can rent out real estate only after its legal formation.

К immovable things (real estate, real estate) includes objects that have all the listed types of turnover, land plots, subsoil plots, isolated water objects and everything related to land, i.e. objects that cannot be moved without disproportionate damage to their purpose, including forests, perennial plantings, buildings, structures.

К movable things include everything that is subject to state registration in special registers or registries: aircraft, sea and river vessels, spaceships, etc.

Real estate includes the most valuable and generally significant objects. Real estate objects such as land and natural resources are of great economic and strategic importance for the state. Largely for this reason, real estate is subject to enhanced protection by law. The reasons for this are partly historical. Land was the most important object of real estate in pre-capitalist times, when money capital and credit played an insignificant role in economic life, while land was almost the only source of private wealth and state income, and served as an indicator of the political importance of a citizen.

These are materially realized, significant in terms of volume and cost objects, most of which are connected with the land and dependent on it.

Funds invested in real estate are protected from inflation, but at the same time can be the cause of speculative transactions in real estate, as prices rise and this can lead to the concentration of real estate in the hands of large owners for the purpose of subsequent profitable sale at a higher price. For the same reason, owning real estate not only brings benefits, but is also associated with restrictions imposed by the state in order to protect the interests of other individuals and society as a whole. For example, a purchased plot of land can be sold after a certain number of years, or it can be purchased after a lease, or the production orientation of the enterprise cannot be changed for a period of time specified in the contract.

REAL ESTATE AS ASSET FOR INVESTMENT, ITS CHARACTERISTICS

Real estate includes land, land plots, everything on and below the surface of the earth. It includes objects attached to the earth, regardless of whether they are of natural or anthropogenic origin. Real estate includes rights to real estate. Movable property includes cars, furniture, ships, aircraft, everything that can be moved. Annexes, utility rooms and buildings, i.e. extensions that are attached to movable property in such a way that they cannot be separated from it without causing damage to it.

Real estate is classified into the following types:

▪ for housing (house, dacha);

▪ for conducting commercial activities (offices, buildings, structures);

▪ for production purposes (workshops, factories, industrial buildings);

▪ for agricultural activities (agricultural complexes, farms).

The advantages of real estate are:

1) investing capital in real estate gives a higher return than providing a loan secured by real estate and receiving initial interest from the borrower;

2) real estate itself is the most reliable way to insure against a decline in the purchasing power of the currency and rising prices.

The disadvantages of real estate are:

1) real estate does not have high liquidity in a short period of time;

2) it is difficult to reasonably invest when buying real estate without qualified advice;

3) ownership of real estate forces the investor to take actions to manage it;

4) there is a high degree of risk that real estate will not bring such income that the investor expects, and even vice versa.

Real estate is also considered as an investment asset. From an investment perspective, the most important characteristics of real estate are both economic and physical characteristics. Economic characteristics include: various extensions and objects characteristic of them, rarity, which is expressed in uniqueness, originality. Physical characteristics include: immobility, which allows the legal mechanism to be regulated to a greater extent than in relation to movable property, indestructibility, which determines the permanence of investments in real estate, heterogeneity, and the presence of different types of buildings. To make a decision on investment, it is necessary to conduct an analysis of the real estate market to decide on the issues of assessing the cost of certain types, to identify profitable segments, determine the level of risks of investors, and the feasibility of investing in construction.

PRINCIPLES OF REAL ESTATE ASSESSMENT

Real estate valuation principles are grouped into four categories.

1. Principles based on the user's perceptions - utility, substitution, expectations - allow you to determine the utility of an object, its acceptable price in the market and the expected benefits from owning a property.

Usefulness of the property - the ability to meet the needs of the user in a given place and for a certain period of time. This is the "principle of utility".

The "principle of substitution" says that the value of the property being valued should not exceed the cost of acquiring a similar object.

The utility of a property is related to the value of projected future benefits (expectation of returns). The "expectation principle" says that the value of a property includes the value of all future income and takes into account the constant growth of this value under the influence of increased demand and limited supply.

2. Principles related to the property (primarily land) and its improvement.

Economic activity requires four factors of production:

▪ labor that must be compensated by wages;

▪ capital, which must be compensated by interest and dividends;

▪ entrepreneurial activity, which must be compensated by profit;

▪ land, which is compensated by rent.

3. Principles related to the market environment - dependency, compliance, supply and demand, competition.

The value of a property is affected by and itself affects the value of other properties in the surrounding area. This is the dependency principle.

The “fitness principle” provides for the conformity of the architectural style and level of amenities (services) of new properties with the needs and expectations of the market.

"The principle of demand and assumption" - when evaluating a property, it is necessary to understand what factors and how they affect supply and demand in the real estate market.

"Principle of competition" - market demand generates profit, and profit creates competition - a force that leads to the alignment of profitability in the real estate market.

The principle that characterizes changes in the utility of real estate in a given location is the "principle of change".

4. The principle of the best and most efficient use of the property is a synthesis of the principles of all groups. It allows the appraiser to identify the best and most profitable option from the possible options for using the property and use it for evaluation. This principle provides for the evaluation of a piece of land as if it were free.

REAL ESTATE APPRAISAL METHODS

There are three methods of real estate appraisal.

Cost method of real estate valuation

Cumulative methods for assessing the value of real estate, based on determining the costs that are necessary to restore or replace it, taking into account accumulated depreciation. The cost approach to real estate valuation consists of the following stages: the value of the land plot is assessed as undeveloped; the full cost of reproduction is estimated; types of wear and tear of existing improvements are assessed; the costs of reproduction and land (replacement) improvements are added to obtain the value of the property being assessed.

Market method of real estate valuation - cumulative methods for assessing the value of real estate, based on comparison of the object of assessment with similar objects for which information is available on the prices of transactions with them. This assessment is needed for the secondary issue of shares of privatized enterprises seeking to increase their authorized capital by an amount supported by real material resources. This will allow investors to avoid mistakes when setting stock prices. Valuation is necessary when dividing property, determining the optimal commercial use of land and real estate, and in all other transactions related to real estate.

Income method of property valuation - cumulative methods for estimating the value of real estate, based on the determination of future income from the commercial use of the property being valued.

There are two methods for this assessment:

▪ profit capitalization method;

▪ discounted cash flow method.

These methods predict the amount of income and expenses for the operation of the facility during the forecast period, then divide the net operating income by the discount rate, which is a percentage of return on invested capital. The capitalization (discount) rate is determined by the appraiser in accordance with existing methods.

The capitalization method is used when there is sufficient data to forecast cash flow, current cash flow is approximately equal to future cash flows, and the expected growth rate of cash flow is predictable. It is applicable to income-generating facilities with stable, predictable amounts of income and expenses. The discounted cash flow method is used when future cash flow levels are expected to differ from current ones, it is possible to predict and determine future cash flows, projected future cash flows are positive for most forecast years.

The method is applicable to the most income-producing facilities that have unstable income and expense flows.

REAL ESTATE PORTFOLIO MANAGEMENT

Real estate portfolio management - these are the cumulative processes of formation, development of management decisions that provide maximum efficiency from the strategy and tactics pursued by the owner for the most rational use of assets.

The real estate portfolio includes the housing market, which includes developers, investors, and users. The real estate investment portfolio manager is responsible for the profitability of the portfolio entrusted to him, which consists of real estate objects, for the development and implementation of a strategic management program. This strategy is aimed at compiling an optimal portfolio by making well-balanced investments and raising funds, taking into account the distribution of possible investment risks.

But it is also aimed at improving the risk ratio during operation and increasing the use value of objects. The portfolio manager sets tasks for the fund manager and finally decides on participation in the implementation of large investment projects.

The development of a strategic portfolio management program is carried out on the basis of the results of portfolio analyzes and study, market knowledge received from the portfolio manager (real estate directorate).

The composition of the portfolio is considered to be the best, taking into account the diversion of investment risks, and depends on the objects, their type, size, geographic location and age.

The main goal of portfolio management is investment and getting the maximum return on invested funds. These returns must be considered in conjunction with possible investment risks. The activities of a portfolio manager are aimed at risk management and control.

The portfolio manager is responsible for the income received on the funds invested in the portfolio in the long term, for the increase in the use value of the objects included in the portfolio, for the degree of investment risks, market share (percentage of the total sales of this product by all market participants), etc.

The essence of portfolio management is to find the starting points of the strategy, which should correspond to the composition of the portfolio, and in the implementation of this strategy. This means identifying those combinations of finished building products and markets that the organization would like to work with. In this case, all the risks (riskiness) of these combinations decide the value of choosing the optimal portfolio. The composition of the portfolio is determined at various levels, for example, at the level of market sectors (office and retail premises, housing) or countries (USA, Brazil).

Author: Kuznetsova S.A.

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