A necessary condition for the successful functioning and dynamic development of the enterprise is investment.
Investments are all types of property and intellectual values invested in objects of entrepreneurial and other activities, as a result of which a profit (income) is formed or a social effect is achieved.
The purpose of investment investments is to obtain net benefits in the future by expanding its own entrepreneurial activity, acquiring new enterprises; diversification of activities due to the development of new business areas.
Investments can be classified according to various characteristics: depending on the content of the invested resources, by investors and objects of investment activity, forms of ownership, the nature of the enterprise’s participation in the investment process, the investment period (Fig. 9.1.). Depending on:
the content of economic resources invested in the development of the enterprise is allocated: cash, property, property rights, land use rights and other values; investor and forms of ownership are distinguished: investments of legal entities and individuals (including foreign ones); state, international organizations, which corresponds to private, public and joint forms of ownership. Private investments characterize the investments of individuals and entrepreneurial organizations of non-state forms of ownership (including foreign ones). State investments are investments of funds of state-owned enterprises, as well as funds of the state budget of its various levels and state budget funds. Joint investments are investments of domestic and foreign investors in the creation of joint ventures; objects of investment activity: real estate (fixed assets), securities (shares, bonds, bank deposits, etc.), property rights to industrial and intellectual property; The nature of the company’s participation in the investment process distinguish direct and indirect investments. With direct investment, the investor is directly involved in the selection of the object of capital investment. In the second case, a financial intermediary or an investment fund does it for him. Indirect investments are associated with the acquisition of securities.
The main feature of the classification is the object of capital investment, on the basis of which real (direct), financial (portfolio) investments and intellectual ones are distinguished.
Real (direct) investment is any investment of cash in real assets associated with the production of goods and services for profit. These are investments aimed at increasing the fixed assets of the enterprise, both production and non-production purposes. Real investments are realized through new construction, expansion, technical re-equipment or reconstruction of existing enterprises.
In modern economic conditions, this form of investment for many enterprises is the only direction of investment activity. Real investments allow enterprises to develop new commodity markets and ensure a constant increase in their market value.
Depending on the tasks that the company sets itself in the investment process, all possible real investments are reduced to the following main groups:
mandatory investments (or investments in order to meet the requirements of public administration) are investments that are necessary for the enterprise to continue its activities. This group includes investments, the purpose of which is to organize the environmental safety of the company’s activities or improve the working conditions of employees of enterprises to a level that meets regulatory requirements, etc .; investments in improving the efficiency of the enterprise. Their goal is, first of all, to create conditions for reducing the company’s costs by updating equipment, improving the technologies used, improving labor and management organizations. The implementation of these investments is necessary for the enterprise in order to withstand the competition; investments in the expansion of production. Their goal is to increase the volume of output of goods for previously formed markets within the framework of existing industries; investments in the creation of new industries. As a result of such investments, completely new enterprises are created that will produce goods that were not previously manufactured by the enterprise or provide a new type of service.
Financial (portfolio) investments are investments in shares, bonds and other securities issued by private and corporate companies, as well as the state, in order to make a profit. They are aimed at forming a portfolio of securities.
Intellectual investments or investments in intangible assets provide for investments in the development of scientific research, advanced training of employees, the acquisition of licenses for the use of new technologies, rights to use trademarks of well-known firms, etc.