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Profit divided by capital investment, what is the indicator. Capital investment efficiency ratio

Instruction

Measure the effectiveness of capital investments at all stages of planning. When designing any objects, the efficiency is determined by two digital indicators (coefficients) - the general and comparative economic efficiency of capital investments. At the same time, the overall economic efficiency, as a rule, is a relative value - the effect to the costs necessary to obtain it.

Together with the coefficient of economic efficiency, calculate the payback period for future capital investments.

The definition of investment efficiency is determined using the following: E \u003d P / C, where E is the efficiency of investments, and P is the profit for the expected period (quarter, year, five years, longer). K is your capital investment in the construction and development of this enterprise that has begun.

If you are calculating the investment of a large amount of investments in the field of production, complicate the formula a little. It has the following form: E \u003d (C - C) / K, where E is the efficiency of the enterprise, C is the price of the annual output of goods (excluding taxes), C is the cost of goods produced.

Calculate the payback period for your capital investment. It is calculated as the result of the ratio of the volume of investment of capital investments to profit according to several formulas: in trade).

Compare the results of the calculation of efficiency with the standard indicators of possible efficiency or exactly the same indicators for an earlier period. Capital investments can be considered cost-effective if, as a result of calculations, the results of measurements of the overall efficiency are not below the normative ones.

Everyone has a legal opportunity to invest not only in bonds and shares of domestic issuers, but also in assets of other countries. A rational investor should strive to ensure that the investments made are effective.

You will need

- company;
- investments

Instruction

Diversification of investments is the main way to achieve the effectiveness of investment investments. The benefit of diversification stems from the fact that different assets respond or do not respond to the same actions or events. If the investor owns a set, then in the event of a decrease in its value due to adverse events, this is offset by the growth or stability of other assets.

That is, the whole point of diversification is that the investment portfolio consists of assets that are independent of each other. To achieve investment efficiency, it is first necessary to build an investment portfolio by studying the mutual dependence of asset dynamics. Therefore, it is worth investing in the economy of several countries that are located in different geographical areas.

The investor can determine which portfolio has been performing well, but cannot calculate which one will be the most efficient in the future. In developed countries, a private investor can build an efficient portfolio with the required risk-to-return ratio from the shares of funds available in his country. Large investment companies strive to provide shareholders with the opportunity to invest in any segment of the economy or the whole world.

Theoretically, our citizens can also purchase a share in a large scale, but in reality, when such a desire is realized, technical difficulties arise, because it is not so easy and quite expensive to transfer funds to buy a share to another country and return them back, registration and taxation cause serious difficulties.

The ultimate goal of the company's investments is to increase their efficiency by expanding the company's activities, reconstruction, technical re-equipment and new construction. Therefore, it is not the efficiency of the use of investments that is important, but the efficiency of the production of the invested object.

However, do not forget that the risk factor is always very significant, since investments are made under conditions of uncertainty, in addition, its degree is constantly changing. Indeed, even at the time of the purchase of new fixed assets, it is impossible to accurately predict the economic effect of such an operation, such decisions are based on an intuitive basis.

NORMATIVE EFFICIENCY COEFFICIENTS OF CAPITAL INVESTMENTS (En)

The normative efficiency coefficient for various industries is currently set at 0 1 - 0 2, which corresponds to a payback period of 10 - 5 years.

The normative efficiency factor is currently accepted for the power industry as 0 125, which corresponds to a payback period of 8 years.

The normative coefficient of efficiency takes into account the different economic nature of capital investments and operating costs. Capital investments are one-time, and the facilities that are put into operation as a result of these capital investments serve for a long time. Operating costs are current and are spent in the production process during the year.

The normative coefficient of efficiency performs the functions of determining the lower limit of the profitability of social production, beyond which this production becomes unprofitable for society as a whole.

The normative coefficient of efficiency, equal to 0 1, will contribute to the development of the oil industry, which is characterized by high capital intensity, the duration of the preparation of industrial reserves (exploration work) and the development of new oil-bearing regions.

The normative efficiency coefficient is an external (exogenous) parameter of comparative calculations.

The normative coefficient of efficiency expresses the minimum profit that can be obtained annually from the use of these capital investments in the national economy. This lost profit is an expense that must be accounted for in this industry. This means that the lower limit of the effectiveness of capital investments when comparing options is to obtain an annual effect from cost reduction in the amount of 15 kopecks.

The normative coefficient of efficiency of capital investments is a general indicator and reflects the level of efficiency of the entire investment process.

The normative coefficient of efficiency En can be taken as 0 12 according to the Standard methodology for determining the economic efficiency, capital investments based on the payback period of 8 years.

Taking the normative coefficient of efficiency of capital and equivalent investments equal to 0 44, we find the annual economic effect of the estimated task. Since, according to the existing methodology for assessing the economic efficiency of automated control systems, pre-production costs for the development of the system are equated to capital investments, when assessing the annual economic effect in this and other cases of calculation, the costs of setting a task on a computer are summed up with capital investments for the task. However, it should be noted that the economic nature of capital expenditures and the costs of setting tasks on a computer is different. In addition, with the adopted methodology for assessing the effectiveness of tasks, there is a double accounting of the costs of setting them up on a computer. They are included in both the running costs and the capital costs of the task.

The levels of standard efficiency ratios are different depending on what indicators (cost, profitability, net output) are used to measure it. Since in most cases comparative efficiency is measured by the ratio of cost savings by options to the difference in capital investments, the standard efficiency ratio for such calculations should also be derived from the ratio of these values.

With the standard efficiency coefficient Ea 0 2 (G0 5 years), the second option is more appropriate.

Ei - normative coefficient of efficiency, 1 / year; GMI, dN2 is the mass of metal products in the basic and new versions, t, determined according to the data of the plant or TPP.

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Calculation of KPI in Excel examples and formulas

KPI is a performance indicator that allows you to objectively evaluate the effectiveness of the actions performed. This system is used to evaluate various indicators (the activities of the entire company, individual structures, specific specialists). It performs not only the functions of control, but also stimulates labor activity. Often, a pay system is built on the basis of KPI. This is a method of forming a variable part of the salary.

KPI Key Performance Indicators: Examples in Excel

The stimulating factor in the KPI motivation system is monetary reward. It can be received by the employee who completed the task assigned to him. The amount of bonus / bonus depends on the result of a particular employee in the reporting period. The amount of remuneration may be fixed or expressed as a percentage of salary.

Each enterprise determines key performance indicators and the weight of each individually. The data depends on the tasks of the company. For example:

The goal is to provide a product sales plan in the amount of 500,000 rubles per month. The key indicator is the sales plan. Measurement system: actual sales amount / planned sales amount.
The goal is to increase the amount of shipment in the period by 20%. The key indicator is the average shipment amount. Measuring system: actual average shipment / planned average shipment.
The goal is to increase the number of customers by 15% in a certain region. The key indicator is the number of customers in the enterprise database. Measurement system: actual number of clients / planned number of clients.

The company also determines the spread of the coefficient (weights) independently. For example:

Implementation of the plan less than 80% is unacceptable.
Implementation of the plan 100% - coefficient 0.45.
Implementation of the plan 100-115% - a coefficient of 0.005 for every 5%.
No errors - coefficient 0.15.
There were no remarks in the reporting period - coefficient 0.15.

This is just a possible option for determining motivational coefficients.

The key point in measuring KPI is the ratio of the actual indicator to the planned one.

NORMATIVE COEFFICIENTS OF THE EFFICIENCY OF CAPITAL INVESTMENTS (EN)

Almost always, an employee's salary consists of a salary (fixed part) and a bonus (variable / variable part). The motivational factor influences the formation of the variable.

Let's assume that the ratio of the fixed and variable parts in the salary is 50 × 50. Key performance indicators and the weight of each of them:

We accept the following values of the coefficients (the same for indicator 1 and indicator 2):

KPI table in Excel:

Explanations:

This is a sample KPI table in Excel. Each enterprise makes its own (taking into account the peculiarities of the work and the bonus system).

KPI Matrix and Example in Excel

To evaluate employees on key performance indicators, a matrix, or agreement on goals, is drawn up. The general form looks like this:

Key indicators are the criteria by which the work of the personnel is evaluated. They are different for each position.
Weights are numbers in the range from 0 to 1, the total sum of which is 1. They reflect the priorities of each key indicator, taking into account the company's objectives.
Base - the allowed minimum value of the indicator. Below the baseline - no result.
The norm is the planned level. What an employee must do. Below - the employee did not cope with his duties.
A goal is a value to aim for. Above the norm, which allows to improve the results.
Fact - the actual results of the work.
The KPI index shows the level of the result in relation to the norm.

Formula for calculating kpi:

KPI index = ((Fact - Base) / (Norm - Base)) * 100%.

An example of filling out a matrix for an office manager:

The performance ratio is the sum of the products of indices and weights. Employee performance evaluation is visually shown using conditional formatting.

Normative coefficient of efficiency of capital investments

The concept of effect and efficiency

In order to better understand what efficiency is, it is necessary to distinguish between the concept of efficiency and effect.

The base of economic efficiency is the ratio of the effect and the costs of achieving it. But in addition to the absolute magnitude of the effect, it is important to determine its relative magnitude, which can be calculated by the ratio of the overall result (effect) to the resource costs that led to its receipt.

In practice, when making calculations, 2 performance indicators are used:

Relative efficiency (compared to something),
Overall (absolute) efficiency, which is determined by the ratio of the total amount of the effect to the corresponding costs for its implementation

Economic efficiency formula

The economic efficiency formula is calculated by dividing the economic effect by the cost of this effect. The economic efficiency formula is as follows:

E = EE/W

Here, EE is the value of the economic effect,

Z - the cost of its implementation.

In practice, the economic efficiency formula is difficult to use, since the numerator and denominator for its calculation most often cannot be measured quantitatively.

.Capital investments, investments, concept and performance indicators

This is due to the diversity of economic activity, which is easier to express in qualitative terms than in quantitative terms.

Performance indicators

At the macroeconomic level, the two most commonly used performance indicators are:

Increase in produced GDP (National Income ND) per capita;
Production of GDP (NI) per unit of input.

Macroeconomic indicators that are used to determine the level of performance in general are different from indicators that are used at the level of enterprises (primary economic entities).

At the microeconomic level, the system of indicators of economic efficiency consists of:

Indicators by types of resources used,
Estimated indicators.

Estimated indicators of the economic efficiency of the enterprise are:

profitability of products, funds;
production of a product for the corresponding amount of costs;
relative savings of fixed and working capital,
material, labor costs and wage fund.

Problems in Determining Efficiency

The most important problem in determining economic efficiency is the choice (what to produce, what types of goods, in what ways, how to distribute them, how much resources to use in this case).

The economic efficiency formula is based on the principle of comparative advantage, which is considered the basis of specialization of both each state individually and the world community as a whole. Due to the comparative advantage in the use of certain resources over others, it becomes possible to determine the most efficient production option that will provide the maximum difference between results and costs. In this case, you can set the opportunity cost of any resource.

In connection with the above, economic efficiency is defined as the ratio of the values of goods produced to the values of goods, the production of which had to be abandoned due to their maximum opportunity cost.

Efficiency is defined in two ways:

The ratio of the production result to the costs incurred,
The ratio of the result produced to the amount (amount) that had to be abandoned in the process of choosing an alternative.

Examples of problem solving

The method of calculating the investment efficiency ratio (rate of return on capital) has two characteristic features:

- the lack of accounting for the time value of money, that is, it does not involve discounting income indicators;

- income is characterized by the net profit indicator PN (balance sheet profit minus deductions to the budget).

This ratio is also called accounting (accounting) profitability. It measures returns in conventional terms by relating the specified investment (or average investment) to the future annual average net return.

The calculation algorithm is extremely simple, which predetermines the widespread use of this indicator in practice: the investment efficiency ratio (ARR) is calculated by dividing the average annual profit (PN) by the average investment. The average investment is found by dividing the initial amount of capital investments by two, if it is assumed that after the expiration of the analyzed project, all capital costs will be written off; if a residual value (RV) is allowed, then its estimate should be taken into account in the calculations.

The formula used to calculate ARR is:

(50)

There is the following tourism project (in thousands

Normative coefficients of efficiency of capital investments (En)

Initial investment - 100,000; The established duration is 20 years; Annual cash inflow - 15,500; Annual straight-line depreciation - 5000. Determine the ARR.

Net income 15,500 — 5,000 10,500

ARR = Investment = 100,000 = 100,000 = 10.5%

From an economic point of view, the most effective tourism project is the one that has the highest rate of return. Since income and the amount of investment used are common accounting items, the accounting (booking) rate of return (ARR) is easy to understand and calculate.

The method based on the investment efficiency ratio has a number of significant drawbacks, mainly due to the fact that it does not take into account the time component of cash flows (there is no way to assess the value of money over time), and accounting data are used instead of cash flow data. In particular, the method does not distinguish between projects with the same amount of average annual profit, but a variable amount of profit over the years, as well as between projects with the same average annual profit, but generated over a different number of years. That is why this method is the last ground.

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Capital investments: essence, structure.

Capital investments are real investments (investments) in fixed capital (fixed assets), including the costs of new construction, expansion, reconstruction and technical re-equipment of existing enterprises, the purchase of machinery, equipment, design and survey work and other costs, and as well as the costs of housing and cultural construction.

In statistical accounting and economic analysis, they are also called capital-forming investments.

In terms of economic content, capital investments represent a part of the social product (mainly the accumulation fund) directed to the reproduction of fixed assets.

In terms of form, however, capital investments are in the form of funds that are used for capital construction, the purchase of equipment and other means of labor that are part of fixed assets.

Capital investments, being the basis for the development of the material and technical base of economic entities, serve as a factor in strengthening their independence in market conditions, and the state - strengthening the defense capability.

The essence of capital investments lies in incurring costs for the reconstruction, acquisition or technical re-equipment of existing fixed assets. Such costs are clearly regulated by the budget, but can be both planned and emergency in case of unforeseen breakdowns of fixed assets that partially or completely disrupt the company's production process.

Capital investments are classified according to a number of criteria. On the basis of the target (industry) purpose of future objects, the following are distinguished:

* construction of industrial facilities;
* construction of agricultural facilities;
* construction of transport and communication facilities;
* housing construction;
* exploration work;
* construction of social facilities (healthcare, education, culture, trade, etc.).

According to the forms of reproduction of fixed assets, capital investments are divided into:

a) for new construction;
b) to expand existing enterprises;
c) for technical re-equipment and reconstruction.

According to the sources of financing, the following capital investments are distinguished:

* to centralized;
* to non-centralized.

On a technological basis, capital investments are divided into:

a) construction and installation works;
b) for the purchase of machinery and equipment;
c) for other capital works and expenses.

Depending on the indicated signs of classification, the structure of capital investments is divided into sectoral, reproductive, technological and territorial.

The technological structure is understood as the composition of capital costs for the construction of an object and their share in the total estimated cost of the object.

The table shows the conditional technological structure of capital investments in the construction of a conditional facility.

The technological structure has a significant impact on the use of capital investments. The improvement of this structure is to increase the share of machinery and equipment in the total estimated cost to an optimal level. An increase in the share of machinery and equipment, that is, the active part of the funds of the future enterprise, contributes to an increase in the production capacity of the enterprise, and, consequently, the cost per unit of output is reduced.

The reproduction structure means the distribution of capital investments according to the forms of reproduction of fixed production assets. It shows the share of investments aimed at the construction of new facilities, reconstruction and technical re-equipment, modernization. The improvement of this structure is to increase the share of capital investments aimed at reconstruction and technical re-equipment. Practice shows that re-equipment is much more effective than new construction. Firstly, the term for commissioning additional capacities is reduced, and secondly, capital investments per unit of output are reduced.

Sectoral structure means the distribution of capital investments by communication sub-sectors.

Improving the sectoral structure is to direct capital investments to those sub-sectors that are of the greatest importance for the development of the industry as a whole, as well as to those that have the greatest demand in the communications services market.

The territorial structure means the distribution of capital investments in individual districts, regions of the country.

Indicators of efficiency of capital investments.

The economic efficiency of capital investments is an indicator obtained by comparing the achieved final result (effect) and the volume of investments made. It is determined in order to economically justify the most appropriate areas for the use of investments and choose the best option for the development of agricultural industries, the construction of new ones, the expansion and modernization of existing agricultural enterprises, as well as the introduction of scientific and technological progress and best practices into production.

The economic efficiency of capital investments in agriculture is divided into general (absolute) and comparative economic efficiency of capital investments.

Knowledge of the overall (absolute) economic efficiency of capital investments is necessary in order to have a complete picture of the overall values of the economic effect when compared with the standards and similar indicators for the previous period, as well as with the indicators of the best agricultural enterprises in the region or region.

The standard for the overall (absolute) efficiency of capital investments for agriculture is set at the level En cx = 0.07. This standard may increase with the growth of labor productivity, the acceleration of scientific and technological progress, the reduction of material intensity and capital intensity of agricultural products.

To determine the overall (absolute) economic efficiency of capital investments in agricultural production, the following indicators and incomes are used.

In general, for agriculture, this is the ratio of the annual increase in gross income in comparable prices of the last year to the volume of capital investments that caused this increase (increase), which is determined by the formula:

Esh \u003d DD / K,

where Esh - economic efficiency of capital investments, rub., DD - gross income from agriculture for the year, rub., K - capital investments, rub.

To determine the economic efficiency of capital investments in individual sectors of agricultural production, the following formula is used:

Echp \u003d DchP / K,

where Echp is the economic efficiency of capital investments in the industry, rub; DnP - increase in the annual volume of net production in the industry, rub.; K - capital investments in the industry, rub.

If it is necessary to determine the economic efficiency of capital investments in an agricultural enterprise, the formula is used for this:

Ep \u003d DP / K,

where Ep is the economic efficiency of capital investments in an agricultural enterprise; DP - increase in annual profit, rub.; K - the volume of capital investments that ensured this increase, rub.

If it is necessary to determine the economic efficiency of capital investments for an industry, enterprise or facility where the indicator of reducing the cost of agricultural production is used, the following formula is applied:

Es \u003d (C1 - C2) / K,

where Es is the economic efficiency of capital investments depending on the cost of production, rubles;

C1 - its cost before capital investments, rub.;

C2 - the cost of production after the implementation of capital investments, rub.;

K - capital investments that made it possible to obtain savings from reducing the cost of production, rub.

Not indifferent for an agricultural enterprise is such a general economic indicator as the period of return of capital investments.

The return period is the time (period) during which the amount of profit received can equal or exceed the amount of capital investments, and is determined by the formula:

where T is the period of return of capital investments, years, years; K - the volume of capital investments, rub.; Пt - the amount of profit on a cumulative basis, received during the time (period) t, during which it is compared with the volume of capital investments, rub.

Thus, the economic meaning of indicators of the overall (absolute) efficiency of capital investments is, first of all, to compare the amount of net output, net income, profit or cost savings with the capital investments that provided these results using available methods. But the criterion of the efficiency of capital investments will be reflected in labor productivity. Additional indicators may be the cost of gross output per 1 ruble. capital investments, unit cost of agricultural production and others.

The comparative economic efficiency of capital investments is used, as a rule, when choosing the optimal variant of their use in agricultural production. An indicator of the comparative economic efficiency of capital investments is the costs incurred, which include the volume of current production costs and capital investments reduced to the same dimension in accordance with the efficiency standard (for a certain period of time), calculated by the formula:

Ci + EnKi = Min,

where Ci - current production costs (cost) of manufactured products) for the i-th option of capital investments, rubles; En - normative coefficient of comparative efficiency of capital investments; Ki - capital investments for the i-th option, rub.

The volumes of current costs incurred can also be determined by the formula:

Сi + ТнКi = Min,

where Сi is the amount of current costs incurred, rub.; Tn - the standard payback period for additional capital investments (time period) due to cost savings (the reciprocal of En); Ki - capital investments, rub.

Moreover, the Ci and Ki indicators can be applied in full in the form of unit costs per 1 ha, 1 ton, 1 m2, etc.

The normative payback period for capital investments is the reciprocal of the normative coefficient of comparative efficiency, which is calculated by the formula:

where Tn is the standard payback period for capital investments; En - normative coefficient of comparative efficiency of capital investments.

With a limited number of options, their sequential, pairwise comparison is possible using the formula:

E \u003d (C1 - C2) / (K1 - K2)

T \u003d (K1 - K2) / (C1 - C2)

where E is the coefficient of comparative efficiency; T - the period of return of additional capital investments by savings from cost reduction; C1, C2 - the cost of manufactured products according to comparative options, rub.; K1, K2 - capital investments for the compared options.

If, in the course of calculations, the coefficient of comparative efficiency (E) is greater than the normative coefficient of comparative efficiency of capital investments (En), or the period for the return of additional capital investments by savings from cost reduction (T) is less than the standard payback period for capital investments (Tn), then additional capital investments and the most capital-intensive option is considered effective. The normative coefficient of comparative efficiency in agriculture as a whole is set at a level not lower than 0.12. This standard indicates the minimum cost reduction per unit of additional capital investments, but it can only be used to measure (compare) incremental values and should not be identified with the standard of overall efficiency.

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Introduction

Investments in the reproduction of fixed assets are carried out in the form of capital investments. Capital investments are the costs of material, labor and monetary resources aimed at restoring and increasing fixed assets. They include costs for construction and installation works, purchase of equipment, inventory, other capital works and costs. In order to use capital investments in the best possible way, it is necessary to carry out their correct and optimal distribution, and for this it is necessary to make a complete study of the possible effectiveness of these or those capital investments.

Efficiency is the ratio of results to costs. However, such, at first glance, a simple definition of efficiency does not reflect the complexity of issues related to its definition. Correct accounting and determination of the costs and results of social labor in determining the economic efficiency of capital investments and new technology are the main conditions for achieving a reliable calculation result.

In theory and practice, there are many indicators that characterize labor efficiency. So, comparing certain types of costs with the associated elements of the beneficial effect, such efficiency indicators as labor productivity, efficiency, equipment utilization are obtained, and the cost-to-effect ratio characterizes the unit cost of production, fuel consumption per unit of production, etc. All these performance indicators are incomplete: they do not adequately take into account either the costs or the effect.

The efficiency of using capital investments largely depends on their structure. There are the following types of capital investment structures: technological, reproductive, sectoral and territorial.

The reproduction structure of capital investments is understood as their distribution and ratio in the total estimated cost according to the forms of reproduction of fixed production assets.

The sectoral structure of capital investments is understood as their distribution and correlation by branches of industry and the national economy as a whole.

The territorial structure of capital investments is understood as their distribution and correlation in the total population for individual economic regions and regions.

The essence of the economic efficiency of capital investments is to increase the productivity of social labor, i.e. in reducing the cost of production.

The objective of this work is to study the main elements, composition and structure of capital investments.

The purpose of the work is to learn how to calculate the efficiency of capital investments in an enterprise.

The object of research is capital investments in the enterprise and their effectiveness.

1. The concept of capital investment: the main elements

Capital investments - investments in fixed capital (fixed assets), including the costs of new construction, expansion, reconstruction and technical re-equipment of existing enterprises, the purchase of machinery, equipment, tools, inventory, design and survey work and other costs. As well as capital investments can be defined as the costs of material, labor and financial resources aimed at the restoration and growth of fixed assets. The main source of capital investments is the accumulation fund directed to the growth of fixed assets. Other sources are the depreciation fund, attracted funds from the population for the construction of residential buildings. The vast majority of capital investments are directed to capital construction. To compare the volumes of capital investments in different years, an assessment is used in a comparable cost estimate of all elements of capital investments at rates, prices, tariffs, etc.

Capital investments consist of the following main elements:

a) the cost of construction and installation works (CEW) - the construction of buildings and structures, works on the development, preparation and planning of development areas, installation of technological, operational and other types of equipment;

b) the cost of acquiring various types of machines, mechanisms, tools and inventory with a service life of at least one year and a cost of more than 1 million rubles. for a unit;

c) capital works and costs for design and survey activities, maintenance of the directorate of the enterprise under construction and technical supervision, training and retraining of operational personnel, etc. The scale of capital construction is characterized by the volume of capital investments and capital work performed.

Capital investments play an extremely important role in the economy of the country and any enterprise, as they are the basis for:

1. systematic renewal of the fixed production assets of the enterprise and the implementation of a policy of expanded reproduction;

2. accelerating scientific and technological progress and improving product quality;

3. structural restructuring of social production and balanced development of all sectors of the national economy;

4. creating the necessary raw material base for industry;

5. civil engineering, health development, higher and secondary education;

6. alleviate or solve the problem of unemployment;

7. protection of the natural environment and the achievement of other goals.

Thus, capital investments are the funds of the state, enterprises and individuals directed to the creation, renewal of fixed assets, reconstruction and technical re-equipment of enterprises. Capital investments play a very important role in the economy of any state. Investments are needed primarily to improve the country's economy and, on this basis, to solve many social problems, primarily to raise the living standards of the population.

2. Composition and structure of capital investments

The composition and structure of capital investments are of great importance for accounting, analysis and, ultimately, for improving the efficiency of capital investments. Knowledge of the composition and structure of capital investments allows us to present them in more detail, obtain objective information about the dynamics of capital investments, determine trends in their change and, on this basis, form an effective investment policy and influence its implementation both at the macro level and at the micro level, i.e. at a particular enterprise.

The composition and structure of capital investments depend on:

1. from the form of ownership;

2. the nature of the reproduction of fixed assets;

3. composition of costs;

4. appointment of capital investments.

Depending on the characteristics underlying the classification, the structure of capital investments is divided into:

a) industry

b) territorial

c) technological

d) reproductive

e) by form of ownership

The distribution of capital investments by sectors characterizes the sectoral structure. Its improvement follows the path of increasing absolute and relative capital investments in the development of progressive (basic) branches of industry, on which the increase in the economic efficiency of social production and the rate of scientific and technological progress depend.

Of paramount importance for increasing the efficiency of social production is the improvement of the technological structure of capital investments, their distribution among the main components: the cost of construction and installation work, the cost of equipment, machines, mechanisms, tools, inventory, other capital works and costs.

The technological structure of capital investments is understood as the composition of the costs for the construction of an object and their share in the total estimated cost.

The progressiveness of the technological structure is determined by the increase in the share of costs for the acquisition of the active part of fixed production assets in the composition of capital investments. In fact, the technological structure of capital investments forms the ratio between the active and passive part of the fixed production assets of the future enterprise.

The technological structure has a significant impact on the efficiency of capital investments. An increase in the share of equipment in the composition of capital investments, as well as production facilities - the most active part of fixed assets - in comparison with the costs of construction and installation work allows for a relative reduction in capital investments per unit of output and thereby increase their economic efficiency. Improving the structure of capital investments contributes to raising the technical level of the enterprise, the growth of mechanization and automation of production.

The change in the technological structure is influenced by a number of factors, primarily scientific and technological progress in the engineering industry of the construction industry, reducing the weight and dimensions of process equipment, increasing its power and productivity, and all-round development of industrial enterprises.

All this makes it possible to reduce the estimated cost of construction and installation works, to increase the level of mechanization and automation of production, to increase the saturation of equipment at the production facilities of industrial enterprises.

The reproductive structure of capital investments is their distribution according to the main forms of reproduction of fixed production assets. It is calculated what share of capital investments in their total amount is directed to new construction, reconstruction, expansion of existing enterprises, technical re-equipment, modernization.

Reconstruction is a process of radical reorganization of existing production on the basis of technical and organizational improvement, comprehensive renewal and modernization of fixed production assets in accordance with the requirements of modern domestic and foreign science and technology. Reconstruction and expansion of existing enterprises allow, in a shorter time and with lower capital costs than with new construction, to increase production capacity, increase production volumes, reduce the time for development of newly commissioned design capacities, and quickly update products manufactured at existing enterprises.

Technical re-equipment is a process of raising the technical level of individual production areas to modern requirements by introducing new equipment and technology, modernizing and replacing equipment with highly efficient ones, comprehensive mechanization and automation of production processes.

Improving the reproductive structure is to increase the share of capital investments directed to the reconstruction and technical re-equipment of existing production.

Theory and practice show that the reconstruction and technical re-equipment of production is much more profitable than new construction, for many reasons:

firstly, the term for commissioning additional production capacities is reduced;

secondly, specific capital investments are significantly reduced.

The territorial structure of capital investments is their distribution by economic regions. Its formation is aimed at ensuring the accelerated development of industry. The point of improving the territorial structure of capital investments is to make it possible to obtain the maximum economic and social effect.

The structure of capital investments by forms of ownership is the distribution of capital investments by state, rental, joint-stock, other collective enterprises, cooperatives, etc.

Depending on the form of ownership, there are:

1. government capital investment

2. capital investments of owners (joint stock companies, partnerships, etc.).

The implementation of state capital investments is closely connected with the investment policy of the state, and the implementation of capital investments of other owners is closely related to the specific investment policy of investors.

3. Efficiency of capital investments

The efficiency of capital investments is the ratio between the costs of production of fixed assets and the results obtained.

The economic efficiency of capital investments is expressed primarily in the economic result that is achieved in the national economy from their implementation. Such a direct economic result is an increase in production capacity and fixed assets. Therefore, the economic efficiency of capital investments is measured on the basis of their value with the economic effect that resulted from the increase.

Expanded reproduction of fixed assets requires significant expenditures of funds that will yield results after a long period. Therefore, it is important for society to know when, for how long, funds are diverted and when they will be returned. In this regard, the issues of the most rational use and direction of capital investments, the speed of their return are decided on the basis of specific indicators, criteria for assessing the economic efficiency of capital investments. They are necessary to resolve the issue of the feasibility of the proposed capital investments at the planning and design stages of enterprises; analysis of the implementation of plans; development and justification of measures for the technical improvement and reconstruction of existing enterprises, their technical re-equipment. The task of calculating economic efficiency in the design process is the selection and justification of the best options for the construction (reconstruction) of enterprises and structures. Determination of efficiency at the stage of development of plans for branches, ministries helps to choose the optimal direction of capital investments, ensuring the most successful development of the national economy, the growth of material well-being and the cultural standard of living of the people. The adopted option should be the most efficient in the industry and help improve the efficiency of the economy as a whole. Therefore, the effectiveness of capital investments is taken into account both in the link of the economy where they are supposed to be implemented, and in related (related) industries or at the consumer.

The effectiveness of capital investments is determined by the specific results achieved as a result of the use of these resources.

3.1 Calculations of the economic efficiency of capital investments

Calculations of the economic efficiency of capital investments are carried out in two directions:

1. general (absolute);

2. comparative.

Calculations of absolute efficiency are carried out in the industry as a whole by construction ministries, departments and construction and installation organizations at all stages of developing plans, long-term forecasts, analyzing the implementation of capital investment plans and substantiating various technical and economic problems. Comparative economic efficiency is calculated by comparing options for various technical solutions, development and placement of construction and installation organizations, etc. It shows how one of these options is more effective than the others. Calculations of absolute and comparative efficiency complement each other and together provide the most efficient use of the planned capital investments. For the national economy as a whole, its branches, economic regions, the absolute economic efficiency of capital investments (Ea) is defined as the ratio of the increase in national income (ND) to capital investments (K) for the corresponding period:

Ea = ND / K (1)

For individual sectors and sub-sectors of industry, agriculture, transport, construction, ministries, business associations (if the net product is not calculated for them), this indicator is determined as the ratio of profit growth (P) to capital investments (K) that caused this increase:

E \u003d P / K (2)

For individual enterprises, construction sites and facilities, activities and technical and economic problems, the overall efficiency indicator is calculated as the ratio of profit (P-C) to capital investments K:

E \u003d (C-S) / K (3),

where C is the cost of the annual output of products (according to the project) in the wholesale prices of the enterprise;

C is the cost of annual output;

K is the estimated cost of the facility under construction.

The absolute economic efficiency of capital investments is determined at the stage of their planning, as well as when evaluating the results of the implementation of plans. In modern conditions, the main drawback of this technique is that the values of the standard coefficients of efficiency of capital investments are significantly underestimated.

In a market economy, their value should adequately change depending on changes in the inflation rate and be at the level of the interest rate or another similar criterion, such as the dividend rate.

The choice from a variety of economically expedient options is carried out by methods of comparative efficiency, where a criterion is proposed, the minimization of which allows making a rational decision.

For sectors and enterprises where settlement prices are applied, as well as for planned unprofitable enterprises, the indicator of absolute efficiency is characterized by the ratio of savings from reducing the cost of production to the capital investments that caused these savings.

The implementation of technical solutions is associated with current costs - cost (C) and capital investments (C). As a rule, additional capital investments are attracted to reduce costs.

The impact of growth in capital investments on cost reduction can be assessed by the ratio of this decrease to the amount of capital investments that caused it, i.e. using the coefficient of comparative economic efficiency (E):

E \u003d (C1-C2) / (K1-K2) (4)

where K1, K2 - capital investments for compared options;

C1, C1 - cost for the same options.

The methodology for determining the comparative efficiency of capital investments is based on a comparison of the reduced costs by options. According to this methodology, the economically viable option is the one that provides the minimum of the reduced costs. The disadvantage of this technique is that the criterion for determining the best option is the reduced costs, and not profit, which best meets the requirements of a market economy. In addition, this technique cannot be used to justify capital investments directed to improving product quality, since improving the quality of products at an enterprise, as a rule, leads to an increase in production costs.

3.2 Ways to improve the efficiency of capital investments

The efficiency of capital investments is formed at four stages:

1. capital investment planning

2. capital construction design

3. building production

4. development of newly commissioned design capacities and technical and economic indicators.

Planning stage - improvement of the sectoral structure of capital investments, their priority direction in the development of progressive industries; increasing the share of capital investments in the technical re-equipment of enterprises in the industry, their reconstruction and expansion; concentration of capital investments at start-up facilities to be put into operation in the planning period; rational distribution of production forces.

The design stage of industrial construction is the widespread use of advanced achievements of science and technology; maximum use of standard projects; observance of the principle of completeness of design; development of optimal schemes for regional planning of industrial catches, association of a group of enterprises in one region; wide unification of building elements of structures.

Stage of construction of industrial enterprises - comprehensive industrialization of construction production; improvement of the organization and technology of construction and installation works; increasing the level of specialization and cooperation in construction; improving the quality of construction; improvement of planning, management and systems of economic regulation of the construction industry.

The stage of operation of newly commissioned industrial facilities and enterprises - ensuring the integrated commissioning of fixed assets and related industries; advance training of personnel and the necessary elements of working capital (raw materials, materials, fuel) for newly built enterprises; organization of timely development of the designed technology for the production of products.

Many directions for increasing the efficiency of capital investments and fixed assets are common to all branches of the national economy. However, the specific manifestation of certain regularities depends on the specifics of the production process, the purpose of the products and the objects of labor used. Therefore, an analysis of general directions for increasing the efficiency of capital investments and the use of fixed assets should be carried out while simultaneously studying the material and technical characteristics of individual industries that determine the most important factors and specific measures that can ensure the growth of the efficiency of fixed assets in a given industry.

Conclusion

They are the basis for an expanded reproduction process, accelerating scientific and technical progress (technical re-equipment and reconstruction of existing enterprises, updating fixed production assets, introducing new equipment and technology), improving product quality and ensuring its competitiveness, updating the range and range of products, reducing production costs and selling products, increasing the volume of products and profits from its sale.

Investment planning should be preceded by a deep analysis of their economic justification, taking into account risk and inflationary processes.

The selection of objects for investment should be made according to the criterion - maximum efficiency at the lowest cost of funds and time.

Each capital investment project must have clearly defined goals: a fundamental improvement in product quality; improvement of its consumer properties, which guarantees the effectiveness of products at the consumer in the world market and in the country; production of environmentally friendly products; improvement of the environment; complex processing of raw materials or non-waste production; accounting for export needs through quantitative indicators.

If none of the set goals is achieved, and the ecology of the object is even deteriorating, then such a project should be abandoned.

In order for the renewal of fixed production assets to take place cyclically (every 5-10 years), it is necessary to solve the problem of organizing the investment process - to compress it in time. This means that each stage or stage of project development, construction, development of production facilities at full design capacity must be carried out within strictly regulated terms, and the total term for the implementation of an investment project (program) must be two to three times less than the terms during which construction has been carried out in recent decades in our country. This is a big economic problem, since the excessive duration of the investment process reduces the efficiency of capital investments and reduces the replenishment of the national income from investments invested in the business.

An important issue of the investment project is the choice of the most effective form of organization of an existing or new enterprise (specialization, cooperation, diversification, combination, concentration). The choice of the best option must be economically proven. The area and location of new production facilities in many situations are selected using economic and mathematical methods for a group of enterprises for the prospective period.

It is necessary to study the positive and negative experience of organizing production in previous periods of our economy. The best of this experience should be used more fully in the practice of developing the productive forces.

Bibliography

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