On the investment attractiveness of the business
What is investment attractiveness? What company can be called investment-attractive, and in what properties is it expressed? Questions are not idle, but not “binomial Newton”, of course.
Imagine two trays on the market. One sells diapers, the other snickers, well, or two stalls selling “shawarma”. Both trays from a legal point of view – Limited liability companies. Which tray / stall is the most attractive from an investment point of view? The one who has the “counter” more or more beautiful saleswoman? Nah
From an investment point of view, the tray that has more profit is attractive! Being a specialist in the field of investment consulting and valuation, I somehow came across a consulting service in the endless Internet spaces, which I was extremely intrigued by. What is this service? This … increases the investment attractiveness of the enterprise. In some cases, this service sounds differently – management of the investment attractiveness of the enterprise.
Considering that in Russia we love to manage at least something, I would introduce another service that, in my opinion, is rather in demand – “control of the mind or“ mind ”. Why is that? Yes, because with the “wisdom” in the field of “investing” we are not so smooth. I would also introduce a new specialty – an investment therapist! But, I digress it.
Try to figure out what the essence of this activity? What is the increase in investment attractiveness? I confess that several definitions I have found do not adequately answer the question.
These definitions are:
The investment attractiveness of an enterprise is a system of economic relations between business entities regarding the effective development of a business and maintaining its competitiveness. These relations are evaluated by a set of indicators of the effectiveness of aspects of the enterprise, which are divided into formal indicators, calculated on the basis of financial reporting data, and informal, which do not have a clear set of input data and are evaluated by experts.
Under the investment attractiveness of an enterprise, they understand the level of satisfaction of financial, production, organizational and other requirements or interests of an investor for a particular enterprise, which can be determined or assessed by the values of relevant indicators, including integration assessment.
Here you will read this and “everything at once” becomes clear! Only after reading, the song of V.Vysotsky was written involuntarily written in the distant 1972 “Comrades scientists”:
Comrades scientists, associate professors with candidates!
You are tortured with X, tangled in zeros,
Sit down, decompose molecules into atoms,
Forgetting that potatoes decompose in the fields.
It seems that the song was written literally yesterday, and little has changed in academic science, especially in its economic field. Therefore, let’s try to figure out what the “investment attractiveness” of an enterprise is by simple, but logical, properly aligned thinking.
If you say “in a boy’s way”, in my understanding, “the investment attractiveness of the enterprise” is … this … This is when you look at the financial performance of the enterprise and you want to shout: “I want, I want, I want …”. In terms of buy, of course.
Well, what if we turn to the regulatory (legislative) framework? This is not at all difficult to do, and the “Law on Investment Activity in the RSFSR” No. 1488 will help us in this. The following is written there:
Investments include cash, special-purpose bank deposits, shares, shares and other securities, technologies, machines, equipment, licenses, including trademarks, loans, any other property or property rights, intellectual values invested in other activities in order to obtain profit (income) and achieve a positive social effect.
Investment activity is an investment, or investment, and a set of practical actions for the implementation of investments. Investing in the creation and reproduction of fixed assets is carried out in the form of capital investments
Based on these definitions, we can assume that the investment attractiveness of an enterprise is, first of all, its ability to arouse a commercial or other interest from a real investor, including the ability of the enterprise to “take investments” and skillfully dispose of them. Dispose of in such a way that after the implementation of the investment project to get a qualitative (or quantitative) leap in the field of product quality, production volumes, increasing market share, etc. That, ultimately, affects the main economic indicator of a commercial enterprise – net profit.
Perhaps, this definition is not entirely scientific, but it becomes clear that not all enterprises can cause “commercial or other interest” to a potential investor. And even more so, not everyone is able to “skillfully dispose” of investments.