Investment analysis

Interim Assessment
Interim assessment (2 module)

0.1 * class work + 0.2 * current activities (quiz) +

0.2 * homework + 0.5 * the final written
examination
 • Homework : can be supplemented during the course

1) Choosing a company
2) Description of the company's investment activities: investment potential, main
projects being implemented, main areas of investment, sources of investment
financing. Key results of ongoing projects. Outline the specifics of the company's
investment activities
3) Description of the selected investment project. The purpose of the project, the
timing of the project, the main sources of funding. Creation of a calculation model:
income, expenses. The choice of the discount rate and its justification. Calculation
of project efficiency: key parameters of the assessment. Identifying project risks
and developing a risk management policy
Provided 2 files: a presentation describing the company's investment policy and
the main results of the project Calculation file with a full description of all financial
indicators and project results You can also provide a description of the entire job
with a project report in a separate document
• Topic 1. Corporation and the investment process. Corporate investment management
system

Corporation and investment environment. Corporate investment system. Corporate

investments, their role and functions. Typology of investments, investment activities in the
company. Corporate investment management system. Financial models of investment
activities. Corporate investment strategies. Strategic investment planning models (SWOT
analysis, GAP analysis).

• Topic 2. Designing cash flows of an investment project

• Topic 3. Analysis of the effectiveness of capital investments

• Topic 4. Investment projects and methods of financing them

• Topic 5. Evaluation of projects with unequal deadlines.

• Topic 6. The method of real options when evaluating investment projects

• Topics 7. Evaluation of the project in conditions of uncertainty and risk

• Topic 8. Framework for Corporate Valuation

• Topic 9. Value Creation Company

• Topic 10. Practice in companies valuation

 Bibliography
• Recommended Core Bibliography
• Corporate finance: theory and practice, Damodaran, A., 2001
• Investment valuation : tools and techniques for determining the
value of any asset, Damodaran, A., 2012
• Valuation: measuring and managing the value of companies,
Copeland, T., Koller, T., 2000
• Инвестиционные рычаги максимизации стоимости компании.
Практика российских предприятий, Теплова Т.В., 2007

• Recommended Additional Bibliography

• Инвестиции : учебник для бакалавров, Теплова Т.В., 2012
• INVESTMENTS . Analysis and Management . Charles P. Jones, Ph.D.,
CFA
• Reilly, Frank K., Brown, Keith C. Investment Analysis and Portfolio
Management, 10th Edition. London: Thomson, 2012.
 Investing versus financing

• The term ‘investing” could be associated with the different activities,

but the common target in these activities is to “employ” the money
(funds) during the time period seeking to enhance the investor’s
wealth.
• Funds to be invested come from assets already owned, borrowed
money and savings.
• By foregoing consumption today and investing their savings,
investors expect to enhance their future consumption possibilities by
increasing their wealth.
 Regulatory framework for the assessment and examination of
investment projects

Law of the Russian Federation No. 39-FZ of February 25, 1999

"On investment activities in the Russian Federation carried out in the form of capital
investments" “Investments - funds, securities, other property, including property rights,
other rights that have a monetary value, invested in objects of entrepreneurial and (or)
other activities in order to obtain profit and (or) achieve another useful effect; investment
activity - investment and implementation of practical actions in order to obtain profit and
(or) achieve other useful effect. »

2. Law of June 26, 1996 "On investment activities "

Investments are cash, targeted bank deposits, shares, shares and other securities,
technologies, machinery, equipment, loans, any other property or property rights,
intellectual values invested in objects of business and other activities in order to generate
profit (income) and achieving positive social impact. Investment activity is an investment,
or investment, and a set of practical actions for the implementation of investments.
Investment in the creation and reproduction of fixed assets is carried out in the form of
capital investments
Macmillan's Dictionary treats investment as
“a stream of expenditures intended for the production of goods, and not for direct
consumption” **.

The Oxford Explanatory Dictionary gives the following interpretation of investment:

"Investments (investment):
1. Acquisition of means of production, such as machinery and equipment, for an enterprise
in order to produce goods for future consumption. Usually such an acquisition is called
capital investment; the higher the level of capital investment in the economy, the faster it
will develop.
2. Acquisition of assets, such as securities, works of art, deposits in banks or construction
companies, etc., primarily in order to obtain financial returns in the form of profit or
capital increase. " A similar definition is given in a more concise form in the Explanatory
Dictionary of I. Bernard and J.C. Colley. Here, investment is understood as “the acquisition
of means of production. In a broader sense: the acquisition of capital for the purpose of
generating income. In a common sense: investing in securities. "

"Investment (investment) - an increase in the volume of capital functioning in the economic

system, that is, the proposed amount of means of production created by people."
 .
Инвестиционные программы ведущих
компаний. Выдержка
Rosneft • Development of offshore fields. Joint program with American ExxonMobil. The initial
implementation period is 2035, the planned investment is more than $ 400 billion. •
ExxonMobil's withdrawal from the project (due to sanctions) led to a revision of the
project.
Lukoil • Modernization of the company's refinery (Volgogradneftepererabotka,
Nizhegorodnefteorgsintez, Permnefteorgsintez). The planned investment is $ 100
billion. In 2015, the company announced that this figure would decline by at least
15%, projects have not yet been launched.
Gazprom Neft • Modernization of the company's refinery (Volgogradneftepererabotka,
Nizhegorodnefteorgsintez, Permnefteorgsintez). The planned investment is $ 100
billion. In 2015, the company announced that this figure would decline by at least
15%, projects have not yet been launched.
 investments can be classified:

by investment object: real investment + financial investment

for participation in the investment process: direct and indirect

investments

by investment time: short-term + medium-term + long-term

investments
 Real and financial investments

Real investments generally involve some kind of tangible asset, such as land,
machinery, factories, etc.

Financial investments involve contracts in paper or electronic form such

as stocks, bonds, etc. Following the objective as it presented in the
introduction this course deals only with the financial investments
because the key theoretical investment concepts and portfolio theory
are based on these investments and allow to analyze investment process
and investment management decision making in the substantially
broader context

Together with the investment the term speculation is frequently used.

Speculation can be described as investment too, but it is related with the
short-term investment horizons and usually involves purchasing the salable
securities with the hope that its price will increase rapidly, providing a quick
profit.