Investments are made to divide two types: real and cash. Real investments are aimed at improving production, buildings, expanding jobs. Monetary, or financial investments directed to operations with securities. Clean investment is real investmentwho are aimed at expanding production. Read more about investments in the article:
Clean investments are the difference in gross investment and ammortization.
Start with the fact that clean investments and gross investment - Two inseparable concepts. Clean investments are part of gross. In order to move away from complex definitions, let's disassemble this situation on the simplest example.
Suppose your cargo car required for your company. To buy it, you need investment. The cost of the truck is 1,000,000 rubles. That is, the size of the investment that you will attract for its purchase will be equal to one million rubles. These are gross investment.
Gross investments are characterized by the amount of money that is directed to the acquisition of new assets.
But since the truck is not eternal, then sooner or later it will have to be replaced. Suppose the service life of our truck - 10 years. To do this, from the moment of buying a car, we need to start postpone on a new one. Ten years is 120 months, it means that every month will need to postpone 8,334 rubles, in order to purchase a new car in 10 years. This is amortization.
In the case of pure investments, it is calculated by the formula: gross investment minus depreciation. That is, it turns out that in our case a case, a net investment on the purchase of a truck amounted to 991,666 rubles.
Gross and net investments in practice
The example above was considered only to purchase one car. But most often in a large enterprise, gross investments are considered cumulatively. For example, to expand production it is required to build a new workshop, buy equipment for it, combine it with old, etc. Then the depreciation calculations are calculated comprehensively for the entire equipment used in the enterprise.
Therefore, sometimes it may turn out that depreciation will be more gross investment. In this case, the amount of net investment will be negative. For the profitable functioning of the enterprise, it is important that net investments are positive. This indicates its sustainable microeconomic environment and liquidity.
Due to what and when the investor will receive a profit?
Investing in the expansion of production, the investor invests his money in the capital of the company. According to the investor agreement, the management of the company must use this money to expand. It is expected that after such a process, the liquidity of the firm will increase, and it will become more profitable.
By signing the contract, the company's management and the contributor himself discusses the amount of payments, its order, timing. Short-term investments pay off regarding for a short time (less than a year), and quite soon the investor receives its profits from the contribution. And to obtain profits from medium-term and long-term deposits, you have to wait for a long time (from 1 year and longer).
Conclusion
With the appearance of investment, many large companies Could protect themselves from bankruptcy, and some medium firms were able to develop to the level of corporations. In addition, investment is actively used in macroeconomics.
This tool can help you. After all, it is possible to attract investors for any purpose for the benefit of the company. This process is beneficial to both parties. And we wish you and your business and prosperity business!
There are two main investment purposes: preservation of cash and their increase.
Each participant in the investment process must necessarily assess their effectiveness, calculate the main indicators and conclude about their profitability or unprofitability.
On the attachment object Investments are:
- Real.
- gross;
- clean.
- Financial.
In the first case, the means are invested in real production to create material and intangible assets. These include: buying buildings, equipment, raw materials, license registration, etc.
In the second case, the investment is carried out in financial instruments (, currency).
How to calculate pure investments?
Pure investments are part of gross.
Chi \u003d gross investment - amortization
Gross investments are the amount of investment in the enterprise, and depreciation is the value of the depreciation of the fundamental capital.
Calculation of net investment is important.Highlight three cases:
- If the value of chi is more depreciation, it means that you should expect Increase capital.
- If chi is less than zero, production will decrease, profit will decrease, And the enterprise approaches bankruptcy.
- If the value of the indicator is zero, then this suggests that the company is in a static state, i.e. Neither growth is not expected or falling.
How to calculate investment?
To assess the effectiveness of future investments, there is always a need to determine their volume. Calculate this amount is quite simple it is necessary to add money amounts that are planned to invest. in the project.
This indicator consists of two types of expenses:
- one-time or initial, for example, to design documents, buying equipment, acquiring a starting party of goods;
- regular or monthly, for example, for renting premises, wage, payment of taxes.
Regular (monthly) costs should be summarized for the entire period of development of the project to the planned date of its exit to self-sufficiency and take away the volume of reinvested funds from this indicator.
How to calculate efficiency?
To evaluate the effectiveness of investments, many formulas are used. There are separate formulas for specific, business projects, etc. Values \u200b\u200bcan be absolute (in monetary or temporary equivalent) relative (in the form of coefficients, share and percent). Next, we give formulas that are particularly popular.
Pure present value
Pure present value (NPV) reflects the net current value of future cash flows.
The higher the NPV, the better. If the indicator is less than zero, the project is unprofitable if it is zero, the project will pay off only costs, but will not make a profit.
To calculate it, you need to find the difference between the future income and the amount of investment Taking into account the discount rate.
Payback period
To assess the effectiveness, the payback period is also calculated. It is a period of time for which all incomes that have appeared due to covered their costs. The smaller this indicator, the better.
Payback (ROI)
ROI \u003d (income - cost) / investment amount * 100%
Income It is the receipts that were obtained.
Cost price - This is the amount of expenses for creating a product or service provision.
If the resulting rate is greater than 100%, then this indicates the profitability of investments, if less - about unprofitability.
When making a decision on cash investment, it is important to calculate these indicators, it is also desirable to spend more detailed analysis. Such an approach will help reduce risks and find the best way For investment.
In conclusion, we propose to visually familiarize yourself with the video about the main indicators of investment profitability.
Clean investments
Clean investments
NET INVESTMENT) Increased production accumulated in the farm, which occurred during a certain period (Gross Investment), minus capital consumption (Capital Consumption), i.e. depreciation.
Finance. Dictionary. 2nd ed. - M.: Infra-M, Publisher "All World". Brian Batler, Brian Johnson, Graham Siduel, etc. General editors: Doctor of Economics Sidiamy I.M.. 2000 .
Clean investments
Pure investments - gross or total investment less depreciation deductions.
In English:Net Investment.
See also: Cumulative investments
Financial Dictionary Finams.
Watch what is "pure investment" in other dictionaries:
- (Net Investment) Pure increase in capital. It is equal to gross investment minus estimated depreciation / depreciation (Capital Consumption). Pure investments are more difficult to measure compared with gross, because, although ... ... Economic Dictionary
- (Net Investment) Adding to the manufacturing facilities of the production made during a certain period - gross investment (GROSS Investment), minus capital consumption (Capital Consumption), that is, depreciation. Business. Well ... ... Business Terms Dictionary
clean investments - an increase in the farming of production facilities that occurred over a certain period (gross investment (Gross Investment)), minus capital consumption (Capital Consumption), i.e. Depreciation. ... ...
Clean investments - gross, or total, investment minus depreciation deductions ... Investment Dictionary
Clean investments - equal to gross investments minus capital depreciation: J \u003d I - DK. This is the part of the gross investment that increases cash Capital. Given the fact that depreciation is usually from 11 to 12% GNP, the amount of Ch.I. It takes only 4-5-% ... ... Dictionary of Economic Theory
Gross investment for rent less than the missed financial income. In English: Net Investment in a lease See also: Rent a financial dictionary Finam ... Financial vocabulary
Clean investment for rent - (Net Investment in a lease) Gross investment for rent less than the missed financial income ...
Net investment in a foreign enterprise - (NET INVESTMENT IN A FOREIGN ENTITY) The proportion of the company in clean assets Foreign enterprise ... Finance and Exchange: Dictionary of Terms
pure investment - Net investment gross investment minus deductions for depreciation. Implementation of a certain volume of Ch.K. Increases the main funds national economy or other economic facility on the same magnitude. )
