Новый Экономический
Университет
НОВОЕ ИМЯ. НОВАЯ ИСТОРИЯ. НОВЫЕ ВОЗМОЖНОСТИ.
Economic analysis1
1. Theoretical and methodological basis of economic analysis
2. Methods, techniques of economic analysis
3 Analysis of volume of production and sale
4. Analysis of fixed assets
5. Analysis of current assets and material resources
6. Analysis of labor resources
7. Analysis of production cost of and sale
8. Analysis of financial results
9. Economic analysis of investment activity of organization.
2
Analysis of operational (production) activity
- purchasing of resources
- sale of goods (commodities), works, services.
Analysis if financial activity
-financing issues,
-assess of financial condition (current and forecasting)
- efficiency of using all financial instruments.
Analysis of investment activity
-estimation of consumption,
-economic expediency,
-profitability,
-security,
-scale of implemented short and long term investment.
3
Asset transaction
Technical condition of
fixed assets
coefficient of
acquisition
renewal coefficient
Validity coefficient
coefficient of
disposal;
liquidation
coefficient;
expansion coefficient.
depreciate coefficient
replacement
coefficient
Working time
utilization (using)
indicator
Replacement rate
Efficiency indicator
Coefficient of loading
of equipment
Utilization coefficient
of nominal time
capital output ratio
Capital productivity
4
Working Capital Issues
Optimal Amount (Level) of Current Assets
Policy A
ASSET LEVEL ($)
Assumptions
• 50,000 maximum units
of production
• Continuous
production
• Three different
policies for current
asset levels are
possible
Policy B
Policy C
Current Assets
0
25,000
OUTPUT (units)
50,000
Impact on
Expected Profitability
Optimal Amount (Level) of Current Assets
Return on Investment =
Let Current Assets = (Cash +
Rec. + Inv.)
Return on Investment =
Net Profit
Current + Fixed Assets
Policy A
ASSET LEVEL ($)
Net Profit
Total Assets
Policy B
Policy C
Current Assets
0
25,000
OUTPUT (units)
50,000
Discount indicators
Complex indicators,
calculation which of them
based on СВА-approach
Indicators, which do not
consider time factor
Net present value (NPV)
Modified Internal rate of return
(MIRR)
Maximum of project profit
Internal rate of return (IRR)
Marginal profitability of
invested capital (MRIC)
Pay-back period (PB)
Modified rates of profitability
Annual equivalent cost (AEC)
Accounting rate of return
(ARR)
Discounted pay-back period
(DPB)
Annual net present value
(ANPV)
Coefficient of comparative
economic efficiency (C
efficiency )
Average annual indicators of
investment attractiveness
Coefficient of money growth (C
growth)
Expected economic effect of
entering investment (EI)
Investment profitability index (PI)
Net present value taking into
account reinvestment of money
(NPV money)
Corrected indicators by taking
into account reinvestment rates
Minimum discounted cost
7
Calculation methodological aspects of analysis of generalizing indicators
of efficiency of long term investment
N
Indicator
Calculation method
1 Net present value (NPV) is difference
NPV = PV – I0 or
between total (common) discounted CF
for whole period and initial value of
investment cost (outlay)
2 Internal rate of return (IRR) is minimum This indicator is defined by this equation
profitability value which means invested
money will be returned in planning period
3 Pay-back period (PB) is defined duration
If CG value is permanent in each realization period of
of time, which is necessary for recovery
investment project than formula of PB can be presented
investment outlay from net CF.
by: PB= I0:CF.
If CF is in equivalent in different period than the PB is
defined by whole amount and fractional. Whole amount
can be defined by adding CG for each period till this
amount will be closer I0 and it should exceed I0.
4
Accounting rate of return (ARR) is defined
by ratio average after tax profit to average
investment value, which is corrected to the
value of depreciation
8