Problems of direct investment enterprises

Direct investment - capital investment is directly in the production of any product, including the purchase, construction or expansion funds of the enterprise (branch). Direct investment can be understood as all operations connected with the establishment of a (gain) control over the enterprise, regardless of its legal form, or the expansion of the company. Direct investments provide investors with effective control over the investee production. Why the problem of direct investment in the production of so relevant today? Businesses are constantly faced with the need of investment, ie with an investment of financial resources (internal and external) in a variety of programs and individual activities (projects) in order to establish new, maintenance and development of existing facilities (capacity) technical preparation of production, profit and other outcomes, such as environmental, social, etc. . Direct investments are directly involved in the production process, for example, investments in buildings, equipment, inventory, etc. According to the American methodology, to include direct investments, which form over a quarter of a firm's capital. Direct investment consists of two distinct components. The first of these - it's an investment in fixed capital, ie the acquisition of newly produced capital goods, such as production equipment, computers and buildings for production purposes. The second component - the investment in inventories (working capital), which represent the accumulation of stocks of raw materials to be used in the production process, or unsold finished goods. Business Inventories are considered an integral part of the total amount of capital stock in the economic system, they are just as necessary as the capital in the form of equipment and buildings for production purposes. Why direct investment so essential to the enterprise? Lack of financial resources the company trying to make up by raising prices for their products. All the increase in profits in the economy determined the price factor. However, increasing prices, enterprises are faced with the demand constraints, leading to problems with product sales and, consequently, the production decline. This can put on the brink of bankruptcy, many enterprises. For example, in a difficult situation was the Volga Automobile Plant. To provide the necessary resources for investment, he always raised the price of the car "Lada", which they have become more value than many higher-quality foreign models. Therefore, sales of products VAZ becomes problematic, but the fate of the plant uncertain. Government is taking action that will facilitate the formation of businesses the necessary financial resources for industrial development. Analysis of the effectiveness of direct investment, if the investment is for the investor requiring justification is based on an assessment of investment projects. The investment project - feasibility study, the volume and timing of investment and a description of practical actions to make investments. Problem of estimating the efficiency of investment alternatives is often complicated by the use of financial resources, with the possibility of simultaneous realization of several investment options. Thus there are difficulties associated with the emergence of various systemic effects in the workplace. Below Figure 1 - Scheme of analysis of direct investment. In the first stage capital investment options selected by the criterion of matching funding requirements (the necessary volume of investment) investor size available financial resources are considered in terms of their compliance with the mission, goals and strategies of the enterprise base. And in this case, mission and goals can be changed for some projects. This assessment can be conducted, for example, the target cross-functional team consisting of specialists of the departments and senior executives of the company base. On the basis of the decision or project is sent for further study or excluded. The second stage is carried out, if the planned investment object - a company of actors. It is carried out a comprehensive study of the company - the object of investment. Thus, direct investments include investments in real assets directly (production and marketing) or arrange to obtain control over the company (takeover). The investor is interested in having his investments enhanced the efficiency of the enterprise and improve its financial condition. So businesses so important to pay attention to foreign direct investment in production and to make decisions on the rational use of them.