1. Concept and essence of capital investments

Main type of investments are capital investments.

The investments directed on construction or acquisition of objects of fixed assets (funds) are called as capital investments. Capital investments differently are called as investments in non-current assets).

Capital investments can be used on creation of new objects of fixed assets or on reconstruction of operating their objects.

There is an objective tendency according to which in dynamics, i.e. eventually, the specific weight of capital investments which go for reconstruction, including for production modernization, in total amount of capital investments constantly increases. In this regard the share of the capital investments directed on building of new objects of fixed assets respectively decreases. The matter is that reconstruction is economically more effective, than new construction as it demands considerably smaller expenses and is carried out in shorter terms, than a construction of new objects of fixed assets.

Project of capital investments and its analysis

Any projects which are carried out in the field of capital construction, undergo in the beginning expert testing which represents the initial stage of the analysis of efficiency of capital investments. In the course of carrying out expert check this project is estimated in the technical and economic plan. The preliminary feasibility study on the project is for this purpose studied. In case as a result of preliminary consideration of the project it is estimated positively, then more in-depth design study to which the most effective projects are allowed only is carried out.

Design research can be division on three main aspects:

• technical and economic analysis;

• financial analysis;

• all-economic analysis.

In the course of implementation of the technical and economic analysis research of capacities is conducted, and besides, development in the field of marketing is conducted. The financial analysis studies possibilities of receiving financial results, that is profits or losses, as a result of implementation of this project.

The all-economic analysis studies possibilities of changes of sizes of budgets of various levels as a result of implementation of certain projects.

The analysis of the project begins with consideration of expediency of its implementation. Thus it is necessary to establish that technically feasible and it is economically expedient to carry out this project.

At this stage expediency of implementation of the project in the conditions of climate of this region, security with the personnel of necessary qualification, existence of necessary infrastructure is studied, and also the potential market size and possible competitiveness on it the constructed or reconstructed enterprise is considered. Those projects which successfully passed a stage of a preliminary estimate, are considered in more detail.

Subject of studying of the financial analysis are the following items of the feasibility study:

• provided sizes of receipts of money and their use;

• finally established sizes of sources of financing of the analyzed project;

• data on profits and losses and balance indicators;

• assessment of efficiency of the presented project;

By means of the all-economic analysis influence of implementation of certain projects on sizes of budgets of various levels, and consequently, and is defined on state of the economy of regions and national economy as a whole.

The all-economic analysis considers such moments:

• state of the economy of the country;

• mutual influence of national economy and implementation of separate investment projects;

• expenses and profits according to the analyzed projects, corresponding to national economic subjects;

• revaluation of carried-out expenses and received results according to all-economic criteria;

Assessment of efficiency of capital investments

In economic literature different types of efficiency of projects of capital investments are considered. So, are allocated public, commercial and budgetary effectiveness. These concepts have the following contents.

Public efficiency is characterized by system of the indicators reflecting social and economic results of implementation of this project, influencing life of all society.

Commercial effectiveness is characterized by system of the indicators, giving the chance to establish expediency of implementation of this project from positions of the investor.

The budgetary efficiency of the project of capital investments is characterized by system of the indicators expressing expediency of implementation of this project from positions of budgets of various levels. The concept of the budgetary efficiency is used in that case when the project provides use of means of budgets for financing of capital investments.

In the course of carrying out the analysis it is necessary to check validity of the sums directed on financing of capital investments, their actual use, and also expediency and efficiency of implementation of concrete actions at the expense of certain sources of means.

As a result of the analysis of influence of carried-out capital investments on efficiency of the primary (production), financial and investment activity of the organization is defined, what influence was made by realized projects on the following indicators:

• on increase of volume, quality and competitiveness of products;

• on increase of financial results of activity of the organization (increase in profit and decrease in losses) due to decrease in prime cost of products owing to economy of material, labor and financial inputs, and also reduction of expenses by depreciation and other expenses;

• on strengthening of a financial condition of the analyzed organization.

Therefore, when carrying out the analysis of influence of carried-out capital investments (including scientific and technical actions) on efficiency of activity of the organization it is necessary to establish how change both generalizing, and private indicators of activity of the organization due to the general action of all factors, and also each factor separately.

We will consider an order of carrying out such analysis on the example of an indicator of product cost.

The size of decrease in product cost as a whole on this organization equals to the sum of changes of this indicator taking place at the expense of influence of various technical and economic factors, including due to the scientific and technical events held at the expense of capital investments.

Decrease in product cost (works, services) is the most important reserve of increase in profit of the analyzed organization. Therefore, increase in profit due to implementation of scientific and technical actions as implementation of projects of the capital investments allocated for increase in efficiency of an expenditure of funds on compensation, material inputs, costs of depreciation and other expenses, it is possible to define on the basis of the size of economy of these expenses increased by coefficient of profitability of production in the basic period.