Investment analysis and selection of "incoming" projects and business ideas for implementation and funding

  • Identification of the project; 
  • Development of the project; 
  • Examination of the project; 
  • Implementation of the project; 
  • Score results. 

The practice of project analysis allows us to generalize the experience of development and identify the main types of investment projects implemented by the Company. 

Despite the variety of projects, their analysis usually follows the general scheme, which consists of special sections, evaluating the commercial, technical, financial, economic and institutional feasibility of the project. 

The general procedure for ordering the investment activities of the Company with respect to a specific project is formed as the project cycle, which has the following steps:

It is proposed that for existing projects, develop a form of “project conclusions”. Project summary is a document which will contain an assessment of each project with an approved method. 

Such a document, separate for each project will be stored in paper and electronic archives, and updated as the project progresses.

The first step is to determine the stage which is individual for every specific project. The main measuring variables at a first approximation would be “time” and “money”.

The second step is to analyze the project for the proposed scheme:

Adoption “project is rejected” is not definitive. This project can be adopted to implement in a modernized version. For existing projects, this situation gives a signal about the need for measures to resolve the crisis. 

Analysis of the commercial feasibility of the project is to conduct marketing research and addressing two basic questions:

1 - Can we sell the product resulting from the project

2 - Will do we get as a result sufficient profit to justify the investment project 

In carrying out the technical analysis necessary to consult relevant experts. During construction - it is analysis of the expenditure side (the need for and cost of summing up of utilities, the cost of construction works, the allowable altitude, the load on the ground, technology, etc.).

Financial analysis is the most lengthy and laborious. Financial analysis requires special skills and trained professionals.

The most important part of the financial analysis of the project is its investment part, which includes: 

  • Definition of the project investment needs; 
  • Establishment (and the subsequent search for the sources of financing investment needs); 
  • Estimation of the capital cost, attracted to the investment project; 
  • Forecast of profits and cash flows due to project implementation; 
  • Assessment of the project effectiveness indexes.

Institutional analysis evaluates the possibility of successful implementation of the investment project, taking into account the organizational, legal, political and administrative situation. This section is not quantitative and does not financial, its main task is to evaluate the combination of internal and external factors that accompany the investment project.

Risk analysis involves consideration of all changes, both on the downside, and in the direction of improvement. The risk uses the concept of probability distribution. The wider range of factors of the project, the more risk of the project.

Based on the analysis of existing projects, the Company forms a clear pattern that will guide management of the project portfolio.