Custom «Investment Analysis» Essay Paper
The basis of any enterprise is to obtain desired profit, reveal economic benefits and increase financial potential through investment. Each investment decision is based on an assessment of the company’s own financial status and availability whether to participate in the investment activities. Moreover, the company pays attention to the volume of investments, sources of funding and the estimation of future inflows through this accumulative process. Investment analysis provides an information base for making the right decision regarding the project inclusion in the portfolio prior to its investment. In addition, it ensures continuous monitoring of a particular project implementation, considering various market risks that relate to demand in the potential investment (Research and Innovative Technology Administration 56). Investment analysis is a part of the investment management process that helps an expert to look back at the previous decision and make an unmistakable solution at a given time.
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Investment analysis is a set of methodological and practical techniques that help validate and evaluate the appropriateness of investing in order for an investor to make an effective decision. Methods and techniques of investment analysis are tools used for in-depth study of various processes in the investment field that help make recommendations based on the conducted analysis (Reilly and Brown 1011).
Analysts may also face numerous obstacles while conducting successful fundamental analysis. Experts can bump up aginst irrational behavior in the market, uncertainties in the future as well as inadequacies of data (Chandra 446).
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Procedure and methods applied in this analysis are focused on the promotion of alternative solutions to the design and investment problems, identification of the extent of uncertainty for each of them and the actual comparison of various performance criteria. Only a small proportion of investment does not give the expected and planned results. However, it usually happens for reasons unknown to the investor. Therefore, investment analysis enhances the effectiveness of investment management. An appropriate strategic planning of the company will help shape the choice of important investment projects (Gotze, Northcott, and Schuster 20).
It is important to be aware of the fact that the investment analysis is a dynamic process that ensures the development of investment projects and decisions in various aspects, including economic environment, the right goals and objectives of investment, marketing and manufacturing, as well as financial and organizational plans of the investor. Moreover, it guarantees the technical basis of the investment project, its social significance, environmental safety, and financial viability. This process also involves organization of project management, analysis of investment risks, adequacy of performance indicators, evaluation of the project members’ capacity, as well as business and personal qualities of the managers. These aspects should be developed and discussed during the analysis, as well as ttaken into account when making an investment decision. Besides, they have to be monitored during the implementation of the project until its completion or termination.
The subject of the investment analysis implicates causal relationships of economic processes and investing activities, as well as a socio-economic efficiency. The study allows one to give a correct assessment of the results achieved, identify the reserves to improve the production efficiency, and justify business plans as well as investment decisions. The object of the investment analysis is financial and economic activity of enterprises in the context of its relationship with technical, organizational, social and other conditions of investment activity.
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The subjects of investment analysis are users of analytical information, directly or indirectly interested in the results and achievements of investment activity. These involve owners, managers, employees, suppliers, customers, creditors, government, and entrepreneurs, who often have to decide between various alternative investments (Wagner 198).
Investment analysis is a complex financial calculation allowing an investor to make informed financial decisions, which in the long, medium, and short term, will be successful according to the analysis. The purpose of the investment analysis is to calculate efficiency of investments that in many ways reflect profitability of this capital spending, as well as difference between revenues and expenditures on the project, production, and business.
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