The impact of investment policy on the financial potential of the investment activity of the enterprises
A.L. Vorsovsky,
аспирант кафедры финансов, Киевский национальный университет имени Тараса Шевченка (Украина, 01601, г. Киев, ул. Владимирская, 64/13; e-mail: 0968494940@voliacable.com)
Аннотация. В данной статье исследуется влияние на финансовый потенциал инвестиционной деятельности предприятий таких факторов как инвестиционная политика предпринимательских структур и государственная инвестиционная политика. Определяются основные составляющие инвестиционной политики предприятий, направленные на повышение финансового потенциала их инвестиционной деятельности. В статье исследуются процессы, связанные с привлечением иностранных инвестиций.
Abstract. This article examines the impact on the financial potential of investment activity of enterprises such factors as investment policy of businesses and state investment policy. This work defines the main components of the investment policy of the enterprises directed on the increase of the financial potential of their investment activity. The article presents data on foreign investment.
Ключевые слова: финансовый потенциал инвестиционной деятельности предприятий, инвестиционная политика, финансово-инвестиционные ресурсы, внешние факторы, внутренние факторы, прямые иностранные инвестиции.
Keywords: financial potential of the investment activity of the enterprises, investment policy, financial and investment resources, external factors, internal factors, foreign direct investment (FDI).
Statement of the Problem. Financial potential investment enterprises are closely connected with the factors that affect it. These factors largely determine the value of this potential. The way will be assessed the impact of various factors on the financial potential of investment activity of enterprises depend on the scale and efficiency of investment.
To the main factors affecting the financial potential of investment activity of enterprises include investment policy of both the businesses and the state. In turn, the investment policy of enterprises is influenced by the State investment policy. Therefore, investigation of the relationship between exposure and financial potential investment companies, their investment policy and investment policy is extremely important.
The research investment processes involved in such foreign scholars as G. Alexander, J. Bailey, L. Basovsky, I. Blanc, A. Damodaran, I. Lyutui, M. Miller, F. Modigliani, W. Mylnyk, William Sharpe and others.
Thus, in connection with the above, the purpose of this article is to study the impact of the investment policy of enterprises and investment policy for the financial potential investment activity of enterprise structures.
Presentation of the basic materials. All the factors the financial potential of the investment activities of the company, can be divided into external and internal. Internal factors vary by organization and management. Thus the management is able to influence these factors and modify them. It can be concluded that due to the impact on internal factors the enterprise may increase the financial potential of their investment activities. The main internal factors that affect the financial potential investment enterprise is its investment policy, in particular approach to financial and investment resources. If the company is formed investment policy, under which the company requires a significant amount of financial
and investment resources, it increases the financial capacity of its investment activities. But it should be noted that excessive involvement of loan finance and investment resources could lead to a deterioration of financial stability, financial independence and solvency. In turn, it adversely affects the value of the financial capacity of the investment activities of the company. Thus, the policy of the company should be directed to the optimization of financial and investment resources.
It should be emphasized that the structure of financial and investment resources of the enterprise depends on the branches of industry the enterprise belongs, features of region in which the enterprise is, legal form of the enterprise, the value of tax rates, turnover of assets, return on equity of the enterprise, the value of interest rate loan and lease rates, the cost of issued securities, the income and expenses of firms.
In recent years, the main source of funding for investments in fixed assets were equity firms, but their share from 2004 to 2008 declined slightly (Fig. 1). Also, reducing the share of equity held companies in 2010 and 2011. In 2009 there was an increase in the share of investments were financed from own sources. Also, in recent years, except for 2010 and 2011, there was a decline in the share of budget funds aimed at financing investments that can be explained by the increase of resources used to finance socially protected budget and influence in 2008 and 2009, the economy of Ukraine World financial crisis. The share of loans in total funding of investments in fixed assets from 2004 to 2008 and in 2011, on the contrary, increased. In 2009, primarily due to the impact of the global financial crisis, the share of loans decreased to 14.2%. In 2010, as a decrease of the share of loans to 13.7%. The share of foreign investment last year ranged from 2.3% to 5.5%.
Journal of Economy and entrepreneurship, Vol. 7, Nom. 11
A.L. Vorsovsky The impact of investment policy on the financial potential of the investment activity of the enterprises
61.4 61,7
57,4 57.8 56,5 56,7
2003 2004 2005 200G 2007 2008 2005 2010 2011
i Internal funds
Lending
i Budgetary fundi
Foreign investments
Figure. 1. Sources of financing investments in fixed capital 2003-2011 years. Source: Developed according to the data of the National Bank of Ukraine. [8]
In recent years, except 2008, 2009 and was impossible due to the influence of the global
2010, there has been an increase in investment. In financial crisis on the economy of Ukraine. Dynam-
2008, 2009 and 2010, the increase in investment ics of growth of investments is shown in Fig. 2.
1,9
22,4
2003
2004
2 OOS
200G
2007
2 OOS
=1
O,
_2010
2Q11
40 2D O -20 -40 -SO
■ Investments growth into fixed capital, % Figure 2. Dynamics of investments into fixed capital 2003-2011 years. Source: Developed in accordance with the data of the National Bank of Ukraine. [8]
Most of the above investments are used for capital construction and acquisition of machinery
and equipment. Significantly lower their volume accounted for overhaul and intangible assets (Table 1).
Table 1
Directions of investment 2006 2007 2008 2009 2010 2011
Construction investments 71518 109694 134655 80091 83550 118446
Purchasing machinery and equipment 53736 78792 98426 65340 61456 85305
Investments which are using during the complete overhaul 15966 23645 27491 18966 18352 23422
Investments in intangible assets 4584 6389 6367 5893 6985 9431
*Source: compiled from data of the State Statistics Service of Ukraine [9]
These data show an increase, before the impact of the effects of the global economic crisis, on the domestic economy, total investment in different areas of investment. It is the decrease in the volumes of investments in intangible assets in 2008. In 2009, there has been a significant decline in investment in capital construction and intangible assets, investments, which are used for construction and the funds directed to the purchasing machinery and equipment. In 2010, an increase of investment in capital construction and intangible assets and reduce the amount of funds aimed at the purchasing machinery and equipment. The significant increase in investment in capital assets listed in Table 1 and observed in 2011.
When choosing the investment policy of the enterprise, along with a choice of investment objectives and definition of investment resources must also be taken into account investor status as a taxpayer, what economists emphasize such as William Sharp, G. Alexander, J. Bailey [4, p. 10]. Thus the investment policy of the company depends on the
tax system of the country in which the enterprise operates, and is related to its tax policies.
The increase on the financial potential of the enterprise positively influences its investment policy aimed at improving the strategic and operational management of investment activities, investment returns, balance and efficiency of investment programs and their execution speed, completeness and timeliness of information regarding the investment environment, the accuracy of forecasting investment conditions, performance evaluation and choice of targets. Also, at the enterprise should carry out the strategic planning of financial and investment resources, ongoing analysis and monitoring of using of these resources, monitoring of investment projects and programs, optimization of investment cash flows, portfolio optimization, ensuring liquidity of investment projects and financial investments, the timely detection of deviations from plans implementation of investment projects and programs; constant monitoring of changes in profitability, liquidity and risk variables related to investment activities. At the enterprise should be established close rela-
Экономмка u npeflnpiiHiiMaTenbCTBO, № 11, 2013 r.
tionship between departments and specialists engaged in investment management, operational, financial management, tax management, legal support of the company, its accounting policies so on. If necessary, the business executives must use the consultants' services specializing in investment management activities.
It should be noted that the investment policy of an enterprise should be formed taking into account the peculiarities of public investment policy, which is one of the principal is external factors that affect the financial potential investment activity of an enterprise. Unlike internal, external factor
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