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Financial Analytics: Science and Experience
 

Features of practical application of key indicators of the investment projects portfolio in development

Vol. 7, Iss. 40, OCTOBER 2014

Available online: 25 October 2014

Subject Heading: BANKING SECTOR

JEL Classification: 

Pages: 11-21

Dorofeev M.L. Plekhanov Russian University of Economics, Moscow, Russian Federation
dorofeevml@ya.ru

Importance The system of resource management of any enterprise aims to gain profit in the future, and it serves as the key in the line-up of the production and economic activities. The creation of the positive cash inflows for business development by means of investment in tangibles and intangibles is the necessary prerequisite of a company's economic growth. The advantage of the traditional methods of the projects economic efficiency estimation is the absence of the uncertainty at the time of the project analysis. The simplicity of the method, as well as the ease of perception, informative value and the illustration purposes of the results, is the most demand issues, required for business decision-making. That is why, I focused on the possibilities of the traditional assessment methods development of investment projects. My article describes the practical features of the valuation methods of investment projects in the development area. Relying on the practical experience of the work on the investment projects valuation, I propose a new approach in this area, which presents a matrix of investment projects portfolio.
     Objectives My article aims to develop the methods of investment projects valuation, in particularly, the development and approbation of the approach to the investment projects valuation.
     Methods I have considered the traditional and matrix techniques of the investment projects valuation. I describe the specific features of the investment project valuation, disclose the principle to determine the discount rate in the development, show a working financial model of project development, and also demonstrate the approach to an analysis of the exposure of the projects to the most significant development risks. I also propose to use the concept of portfolio management of investment projects based on the key indicators.
     Results In my paper, I propose and test my valuations methods of investment projects, i.e. a matrix of the key indicators of investment projects portfolio.
     Conclusions and Relevance Specifically pertaining to the analysis of the projects portfolio exposure, I propose a new liability index, i.e. the project portfolio delta.

Keywords: key indicators, matrix, investment, projects, portfolio, development

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ISSN 2311-8768 (Online)
ISSN 2073-4484 (Print)

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