Financial and economic indicators of efficiency of investment process at enterprise

Abstract

This article has generalized methodological tools which can be used for determining the efficiency of investment processes in the enterprise. The use of indicators of internal rate of return and net present income as key performance indicators of the investment process is considered. The system of indicators to assess the economic efficiency of the investment process at enterprisesis generalized. The procedure of discounting as a way of bringing multi-payment to the base date is described. Its economic content and order of payment are shown. The methodical approach to the evaluation of the effectiveness of the investment process is proposed. We consider net present value (NPV) as the discounted difference of one point in time (usually a year to start the project) the income and expenditures (investments). It is concluded that the net flow of payments includes both income – profit from productive activities and depreciation and expenses – investment in capital construction, reproduction of fixed assets that are eliminated during production, as well as the creation and accumulation of working capital. The internal rate of return as the indicator for evaluation of the degree of alternative resource allocation attractiveness is described. The content of the term ROI is determined. It has been defined the content of profitability index (benefit-cost ratio), or the index of profitability (profitability index) of investment project, which represents the ratio of reduced to reduced revenues for the same date of investment spending.