By financing any project, the investor wants to be sure that his investments will pay off and bring profit. Therefore, before investing money, you need to carefully analyze investment proposals and choose the most promising of them.
Instructions
Step 1
Analysis of an investment project consists of several stages: - preliminary; - commercial; - technical; - financial; - institutional; - risk analysis.
Step 2
At the stage of preliminary analysis, determine the state of the sector of the economy to which the company belongs. Developing (eg, mobile phone manufacturing) and mature (automotive) industries are preferable to those that are either in their infancy (nanotechnology) or aging (shipbuilding). Consider the position of an enterprise in the market: dominant or strong contributes to a faster payback of the project than an unstable or weak one.
Step 3
Evaluate the commercial feasibility of the investment proposal: will there be a demand for the product that is supposed to be produced as part of the project, and will the company be able to make enough profit to justify and recoup the investor's investment. Analyze the market and competitiveness of the enterprise, taking into account the following factors: product quality, efficiency of the means of sale, maintenance, delivery, price and cost, location, advertising, reputation and financial stability of the enterprise. If a potential partner wins on all counts, the investment can promise good prospects.
Step 4
The technical analysis involves an assessment of the technologies used by the enterprise, local conditions and the technical feasibility of the project. If in the process of activity standard technologies are used, focused on domestic equipment and raw materials, the cost of project implementation will be lower than in the case of attracting imported resources. Evaluate the availability of communications and the adaptability of technology to the conditions of the area, as well as safety and compliance with environmental standards. Find out if the company has the necessary patents and licenses to operate.
Step 5
In the next step, conduct a financial analysis of the investment project. As a rule, it includes the following stages: - analysis of the financial condition of the enterprise for 3-5 previous years; - analysis of the financial condition of the enterprise at the current moment; - determination of the amount of required financing; - identification of sources of investment financing; - analysis of production break-even; - plan-forecast cash flows, profits and losses for the period of the project; - assessment of the effectiveness of the project. If the company meets the criteria of financial stability, and the total cash flows cover and exceed the amount of investment, the project can be accepted.
Step 6
The next stage is institutional analysis. Determine whether the project will be successful from an organizational, legal and administrative point of view. Evaluate the experience and qualifications of the managerial staff of the enterprise, its motivation within the project, the availability of labor resources and the need to attract new employees.
Step 7
Next, analyze the possible risks, taking into account changes in the amount of capital costs, prices for raw materials and components, sales volumes and other parameters for the worse and for the better. Consider the project from the most pessimistic position and, on its basis, draw a conclusion about the possibility of investing money.
Step 8
In the event that an investment project meets all the requirements, it can be considered promising. When there are several investment proposals, choose the one that provides the best solution at each stage of the analysis.
