Essence and forms of investment
The source of capital gains and investment motive is profit earned from them. Depending on the process flow at the time of investment and profit from investments are three possible forms:
• sequential processes of: profit can be obtained immediately after the investment in full;
• parallel processes of: profit can be obtained after entering the first stage of the facility;
• interval of processes (as in the case of investments in equity instruments).
Depending on the type of investment resources invested investment may take the form of:
- Cash and bank deposits target;
- Movable and immovable property;
- Property rights and so on.
The form of income investments can be classified into those that bring tangible benefits (cash income, risk reduction, access to new markets) and those that provide social benefits (raising the prestige of the company, improve working conditions and the environment).
Depending on the direction of investments identified two main forms of investment: real and financial (Fig. 8.1). Real investments - is investing in basic and circulating means, including tangible and intangible assets. [/ Announce]
A variety of real investment is an innovative form of investment in which funds are invested in innovation in order to introduce the latest scientific and technical developments and successful response to competitors in the commodity markets. Phases of the innovation process are:
- Patenting ideas;
- Rationale innovations;
- Experimental development of innovations;
- Bringing innovative ideas to industrial production;
- Marketing innovations;
- The implementation of innovative projects;
- Sales of products produced as a result of innovation.
Innovative investment is very risky. their implementation engaged in specialized venture (risk) firms. Depending on the sources of funding can be used various forms of vein-churu:
1. Venture, an innovative company created a joint-stock company after extensive advertising investment ideas in the media accumulate funds for its implementation of private and institutional investors. Such a venture called independent or otherwise clean.
2. Venture capital firm created several innovative enterprises on the basis of equity and organizational issued in the form of research consortia (external venture).
3. Venture innovative company created investment companies and funds that specialize in the implementation of innovative projects.
4. It creates innovative venture inland departments in large enterprises (research bureaus, research and design offices, scientific and industrial associations).
The latest innovation organizational form is most often used by domestic enterprises. But it has some serious shortcomings.
Thus, in periods of recession the company financial resources for innovation and lacking innovation process is practically suspended. In addition, the lack of competition as a stimulus intensification of work does not always provide high quality innovative products.
Financial investment - an investment in a variety of monetary assets and equity instruments. To include monetary instruments or targets special bank deposits, deposits, shares; and the stock - securities (shares, bonds, investment and savings certificates, bills, etc.) and their derivatives (futures, options, guarantees).
Depending on the nature of participation in the process of investing investments can be classified as follows:
- Portfolio (indirect, indirect).
When direct investments investor directly involved in choosing investment targets, without resorting to intermediaries. Typically, with investors trying to seize a controlling stake in the company, and after that actively invest in its further development (strategic investments).
Portfolio (indirect) investments made with the involvement of intermediaries - institutional investors. In this case, the investor does not intend to increase its influence in issuers and forms through intermediaries portfolio, diversified by type of financial instruments.
Indirect investment management form is appropriate if the investor does not have sufficient training and information for selecting investment targets and further management.
Depending on the period of investment investment share:
- Short-term - investments for a period not exceeding 1 year (mostly are financial investments);
- Long-term - investing for more than one year.
By ownership investment are: public, private, joint and foreign.
By region investments are classified as: internal (within the country) and external (foreign).
The magnitude of the investment risk are: neryzykovi (reliable) serednoryzykovi, risk, high-risk (venture).
For the purposes of reproduction process investment share as follows:
- The original or a net investment - the amount of investment in creation (purchase) a new business or production;
- Investments to expand existing production - the size of investments for the introduction of additional warehouse space, production space, the main process equipment;
- Reinvestment - send free funds gained from previous investment, replacement of fixed assets, rationalization, change of product mix, diversification, training, NIOKR, environmental protection etc.
- Gross investments - total net investment and reinvestment for the entire period.
Depending on the purpose of investment analysis as facility management financial manager should take into account the specifics of the following criteria:
- The scope of the investment business (capital construction, environmental sector, innovative sphere, the sphere of circulation of financial capital, enforce property rights of investment);
- Functional focus investments (exploration of mineral resources, their extraction, production, processing, transportation, sales and marketing);
- Sectoral focus of investment (energy, transport, engineering, chemical and petrochemical industry, medicine, agriculture, etc.);
- The need to invest (mandatory, desired, optional);
- Sources of investment financing (from their own, borrowed and borrowed funds);
- Novelty obtained as a result of investment products (brand new, improved, familiar market);
- Relation to markets (investment for the maintenance of the existing market or expansion in this country and abroad);
- Investment performance indicator (highly, serednoefektyvni, ineffective);
- Time structure of cash flows (constant motion, variable motion) and others.