The profit reinvestment ratio is given by the formula. Reinvestment coefficient: formula and explanation before it
Reinvestment rate- tse
a) the interest rate at which the income from the war is reinvested throughout the life of the war,
b) the interest rate at which money is reinvested in order to generate income.
Was the side cinnamon?
More information about the reinvestment rate
- Reinvestment
Reinvestment Reinvestment is the movement of capital from some assets to other more effective investment objects in the process of investment activity of the enterprise. reinvestment Bid reinvestment- the interest rate for which sums are reinvested that should be brought in - Methods for assessing the company's value for the purposes of M&A on the basis of clay production of VAT "CONCERN "KALINA"
Dividend yield coefficient 13.36 24.45 7.51 12.98 - - Rate reinvestment- 76 92 87 - - Return on capital - 0.18 0.13 0.28 - Possibility of reducing tax revenue for industrial enterprises
For this option, the MDV rate includes a 15% tax on income and a 20% tax reinvestment profit 50% capital return 0.7. Behind - Analysis of basic methods for assessing the investment activity of an enterprise
Kr i - coefficient reinvestment characterizes the investment profitability of the enterprise KZ - capital expenditures A - depreciation ΔОА - change... Nst - tax rate on the income of a small number of indicators is frozen for analysis of just one internal development unit - The capital asset valuation model as a tool for estimating the discount rate
This automatically turns on any securities that transfer intermediate payments, such as coupons for bonds, so that these coupons will be available in the future. reinvested behind the stakes that are not known at this moment in time Tilka with the two minds still waiting - Financial mechanism for the formation and implementation of a business plan from the receipt of various forms of venture capital
The premium rate for such loans may not be set or may be 2-4% higher than the lower London interbank rate of interest LIBOR 9 and mechanisms reinvestment allow you to optimize the generation of profits. Venture investment loan is an important means of financing business plans that are especially generated. - Rink's capitalization
Financial management has the most extensive operations of capitalization of income and capitalization of net income directly from the part of the capitalization of the financial development of capitalization of net penny flow from investment. reinvestment capitalization of the deposit amount aimed at increasing the deposit capitalization of dividends by way... Further capitalization capitalization profit capitalization capital gain income rate capitalization rate capitalization rate decapitalization - The influx of concentrated power on the dividend policy of Russian companies
This is due to the fact that companies can get more benefits from the volume of shares and be more invested in reinvestment income from income as dividends 2.4. The fate of the great rulers lies with the middle... In addition, for the general director and members for the sake of directors, the payment of dividends was reduced until 2015. The tax rate on dividends increased to 9%, and the tax rate on personal income became 13%. In 2015 Offended bets were equal - Infusion of the life cycle of business into the assessment of its value
Thus, when assessing a ready-made business using the method of purchase and sale, the discount rate can significantly increase and remain a variable value throughout the life cycle of the business. Reinvestment if necessary, reducing the competitive position of Swede, growing parts of the market 0-5 Strong old Negative - Indicators that will ensure control over the implementation of the strategy and the ongoing financial system
X ND EBIT And we have two more indicators of another level: the average importance of the service charge and credit pressure in the financial service sector For analogy... For example, asset turnover and inventory receivables and accounts payable indicators of efficiency of assets, gross revenue operation net profitability yield of net profit on investment as well as the ratio of the division of earned profit, for example reinvestment net profit Ale zreshtoyu those who show will be direct for the financial director - Assessment of shares and value of commercial organizations based on a new model of financial value
Two other models for assessing the profitability of a commercial organization model of excess income and abnormal growth of income as a discount rate to determine the surplus of the capital of the Kyrgyz Republic. noi profitability of the capital... Operating profit from the settlement reinvestment free penny flow million rubles - - 818,341,921,796,976,153,997 - Forecasting the company's growth rate based on the reinvestment ratio, profit margin and capital turnover
We propose a method for including growth in the value of a company, and this method assumes that growth is endogenous in nature, so it is necessary to transform it into a liability function. reinvestment firms are experiencing an increase in the future rate of their reinvestment 11 In the classical form of recording the assessment model... T - income tax rate % BVC - balance sheet capital of the firm rub NI - net - Effective depreciation policy as a factor in promoting innovation and investment activity of industrial enterprises
SRSR to achieve successful conclusion reinvestment amortization of investments In our region, the remaining rocks of financing creative processes for the market... Banks have stopped giving long-term money, exchanging short-term loans and higher interest rates, which are characterized by We are sorry for the loss of Zhilkina 2015. The depreciation system does not lie so heavily - Key aspects of revenue management for an organization
IT 1 - t 10 de f - tax rate on income Based on NOPLAT and the return on capital, the return on the business is insured for the model... So it is customary to see two groups 13, from 137 the short-term profit changes the net assets 3 dividends on preferred shares, dividends paid on preferred shares for healthcare workers, the income from the income does not change the net assets reserves increase in statutory capital capitalization reinvestment undivided income 3 Net assets show the extent to which the organization's assets are transferred due to short-term - Methodological aspects of managing the power capital of an organization with a vicarious criterion of varosti
Gordon's Model M method of forecasted dividend growth was split up to recoup the shareholders' income from the amount of dividends they received - this means that a small part of the shareholder's excess income is directly allocated to the payment of dividends are being swayed by vlasniks reinvested undivided parts The profit that is lost in the company and can be effectively vicorized... The method is reduced to the fact that the capital value consists of two parts of the risk-free rate and the premium for the risk of this asset ke Rf βE RM - Rf 4 here -
Dotch introduction reinvested profit to the amount of net profit To expand the influx of these factors to change the rate of growth... In addition, the return on capital is calculated as a discount rate in the process of real and financial investment. investment project - Features of the financial policy of companies in the wake of the crisis
In addition, typical for an effective policy is the ongoing trend of increased return on assets, increased profitability of sales, shortened financial cycle, increased productivity, increased Physician reinvestment the income of a decrease in the trade income, a decrease in the material intensity and wage intensity of products, a decrease in the level of the aggregate rizik. Regardless of the fact that the implementation of the expansion policy is overcoming a number of problems of the current Russian economy. Economies, including those that are extremely high for legal business, have interest rates on loans that outpace the current investment in the expansion of industrial activities. This is a particular problem. relevant - The influx of external factors on the dividend policy of Russian companies
The model was created on the basis of data about enterprises, which represent 9 galuzes, species of bark copalina, industry, supply of electricity and gas, everyday life, wholesale and retail trade, transport, rural government, operations insanity... At the same time, most of the company knows reinvestment Profits, as a main goal of financing one’s activities, and the remaining dividend payments will soon become obsolete. - Theoretical and methodological approaches to assessing the financial potential of municipal institutions in the minds of reforming the territorial organization of local self-government
Their role in shaping the financial potential of municipal institutions is indicated by the three main officials who primarily participate in the role of dzherel reinvestment benefits for the development of the process of expanded creation of new jobs to satisfy the everyday needs of the people... forged base
The size of the part of the profit that was lost, and the norm reinvestment lies the value of the replenishment of the organization's power capital and the value of the financial coefficients... PDV other taxes are not optimally split from taxes to the budgets of different regions of the federal region national municipal district settlements as a result of the supra-world centralization of financial resources and the existence of a model of optimal fiscal federalism for the provision of small businesses, a simplified system of unities the supply of income is only changing the activation of small businesses and the complexity of the tax administration in connection with the unresolved forecasts of the supplied income for various specialized enterprises with the introduction of amendments Coefficients are just a local approach, which does not solve the main problem. options for tax rates and tax bases with a simplified tax model, it is obvious that the tax payer will always choose the option where the tax is smaller and the level of administrative costs is lower for the duration of the system The basis of the model of the Unified Rural Donation Tax as the non-calculation of the rate by 6% depending on the difference in income and expenditure the most supply base of non-supply systems of natural resources
You can see the meaning of the concept of cash flow. On a static level, there is a large number of pennies available to the ordered subject (enterprise or individual) at a specific hour - “free reserve”. For an investor, cash flow is a return to future income from investments (at a discounted rate). From the point of view of business activity, the dynamic market, cash flow is a plan for the upcoming collapse of financial funds of enterprises in the hour of compiling data about the Russian Federation in the forward periods. For a skin condition, cash flow means the actual collapse of financial assets.
Dzherela analysis of penny flows:
This is about the Rukh Koshtiv;
Analytical data for sections 50, 51, 52, 55, 57
A meta-analysis of penny flows is, first of all, an analysis of the financial stability and profitability of an enterprise. Its main point is the expansion of penny flows, which will be transferred to operational (flow) activities.
The penny flow characterizes the level of self-financing of an enterprise, its financial strength, financial potential, profitability.
The financial well-being of the great world will lie with the tide of capital, which will ensure that your goiter is covered. The absence of a minimally required stock of cash may indicate financial difficulties. An excess of cash may be a sign that the business recognizes the cost.
Moreover, the reason for these increases may be related both to inflation and the value of pennies, as well as to the lost opportunity of their lucrative placement and the loss of additional income. At any time, the analysis of penny flows will allow us to establish a real financial system for business.
Analysis of penny flows is one of the key points in the analysis of the financial sector of an enterprise, from which it is possible to understand how the enterprise could organize the management of penny flows so that At the moment, the ordered company had sufficient cooking capacity.
Analysis of penny flows can be carried out manually using additional information about the flow of funds. According to the international standard IAS7, this is based not on the directions and directions of the investment, but on the areas of activity of the enterprise - operational (flow), investment and financial. This is the main source of information for the analysis of penny flows.
The information about the coin cost is formed in order to accurately increase the influx of flow, investment and financial activities of the organization into the plant for the current period and allows us to explain the changes in penny costs for this period.
This information about the loss of funds provides important information for both the care of the organization, investors and creditors.
The organization's performance can be determined by assessing the organization's liquidity before dividends by assessing the inflows of the organization's financial solution. uvannya whatever programs. In other words, the organization's focus on cash flow is necessary in order to determine whether it will have enough cash to pay off short-term accounts payable, in order to increase the supply of funds it would like to use. to the ivniki. In addition, it will help plan the investment and financial policy of the organization.
Investors and creditors are asking for information about the flow of pennies to pay for food and the organization of the organization so that enough money is generated on the shelves to repay the debt to pay off idendiv.
Warehouse parts refer to the supply and distribution of costs in the context of flow, investment and financial activities of the organization.
On-line activity includes influx on the cost of government operations, giving influx to get involved in the organization's profits. This category includes such operations as the sale of goods (work, services), acquisition of goods (work, services) necessary for the operational activities of the organization, payment of fees for a loan, and payments from wages, reinsurance of contributions.
Pid investment activity This includes the acquisition and implementation of basic assets, valuable papers, loans, etc.
Financial activity includes the withdrawal and return of funds for the company's activities, transactions with the purchase of shares, etc.
Meta-analysis of penny flows – extracting objective, accurate and timely characteristics of the direct acquisition and wasting of money, assessing factors for changing penny flows.
Introduction to the analysis of penny flows:
Assessing the optimality of penny flows;
Assessment of the warehouse, structure and direction of penny flows;
Assessment of the dynamics of penny flows;
Revealed and suppressed by the influx of various factors into the formation of penny flows;
Revealed and assessed reserves for the expansion of vicious assets;
Development of proposals for the implementation of reserves to increase the effectiveness of vikoristan costs
To assess the dynamics of penny flows, the rate of growth, the rate of growth, the absolute increase in tide, the flow of net penny flows from both the organization and the types of activities are analyzed.
The structure of the supply and vibuta of the kosts is determined on the basis of the growth of the pituitary skin status of the influx of penny kosts and the hydration of the skin stats of the stagnation of the influx of penny kosts.
What is more important is the analysis of the uniformity between the divisions of the flow of goods and the flow of capital during the hour. It is carried out on the basis of the growth of the pet's supply and the price of money per month, quarter, as well as the price of a penny per river.
The assessment of uniformity is carried out on the basis of the uniformity coefficient of penny flows:
σ – average square change in penny flows over the next month versus the monthly average;
- average monthly value of the penny flow.
The uniformity coefficient is determined by the tide and inflow of stock.
The assessment of penny flows is carried out on the basis of coefficient analysis, which is based on indicators - coefficients.
In-line payout coefficient:
(supply of costs for flow activities) / (supply of costs for flow activities)
Shows the sufficiency of costs to support the payment capacity, with a value of 1, indicate the generated costs, with a value lower than 1, indicate a shortage of costs.
Sufficiency coefficient for net penny flow:
(Net penny flow) / ((payments for loans and positions) + (increase in decrease in current tangible assets) + (paid dividends))
What is the importance of the display, the greater the ability of the organization in the current flow activity
Efficiency ratio of penny flows:
(Net penny flow by flow activity) / (Net penny flow by flow activity)
Shows a portion of the negative penny flow that directly impacts the generation of cash.
Reinvestment ratio of penny flows:
((Net penny flow from current activities) - (dividend payments)) / (increase in non-current assets)
It reduces the share of capital expenditures that are financed with the help of flow activities, then. without obtaining positioning devices.
Liquidity coefficient of penny stream:
(recovery of koshtiv) / (vicoristannya of koshtiv)
Indicates the sufficiency of liquidity support values, with a value of 1 indicates a sufficient level of liquidity, with a value lower than one indicates “sold” before accumulated values.
Profitability ratios of penny streams:
(Net profit) / (cost recovery)
The profit of karbovanets is increasing in how many rubles.
(Net profit) / (Average value of surplus)
(Net profit) / (Vibutya koshtiv)
p align="justify"> The company's reinvestment ratio may be negative, if capital expenditures are charged for depreciation, or if working capital is steadily declining over time. For most companies, this negative ratio is a temporary phenomenon that is driven by the increase in capital expenditures and the supply of working capital. For these companies, the current reinvestment ratio (which is negative) can be replaced by the average reinvestment ratio for a number of remaining assets (we did this in illustration 11.10 for the Embraer company). For other companies, a negative reinvestment ratio may be a result of the company's policy, and ours is due to the fact that the company has entered into this direction.
- ? Firms that have invested a lot in capital expenditures or working capital in the past can live on past investments for a long time, reinvesting small sums and withdrawing large penny flows from Iodine. If this is the case, then in the forecasts we will emphasize the negative reinvestment ratio and estimate the growth based on the increased return on capital. However, once the company has reached a level where it effectively utilizes its resources, then in order to generate realized growth it is necessary to change the reinvestment ratio.
- ? A more extreme scenario is realized by a company that has decided to self-deal without exchanging assets in the world for their exit and writing off working capital. In this type of growth, the growth may be assessed as an additional factor of the negative reinvestment coefficient. It is not surprising that the rate of growth and decline in income over time will lead to a negative level.
For example, a company that enjoys an increasing return on capital from 10 to 11%, while maintaining a reinvestment ratio of 40%, is subject to the same rate of growth:
As a result, the increased income on capital will push the return on primary assets, and this change will increase in addition to 10%.
Marginal and average return on capital. So far we have looked at the income on capital as a whole, which means income. In reality there are two types of capital income. One is the profit earned by the company in aggregate across all investments, which is significant as the average capital income. The other - the income earned by the company only on new investments, as it did in the old river - is called the marginal income on capital.
Changes to the marginal income of capital do not create an effect of a different order, and the firm's profitability is similar to the marginal income of capital and the reinvestment ratio. Prote changes in the average income of capital will lead to the additional growth described above.
Candidates for changing the average capital income. What types of firms, which have changed over all, will be affected by the change in their income on capital over time? One category includes firms with low return on capital seeking to increase their operating efficiency and profit margins and, ultimately, their return on capital. In these firms, the growth rate will be significantly higher, lower the product of the reinvestment ratio and return on capital. The share of income on capital in these firms before the change in the situation is low, small fluctuations in income on capital will lead to great changes in the rate of growth. Thus, the increase in income on capital on other assets from 1 to 2% will double the income (which results in a 100% growth rate).
Another category is taking advantage of firms that have even high returns on capital for basic investments: all the time, the world has seen the entry of competitors into business and the fall in income is not only new, but Basic investments.
ILLUSTRATION 11.12. Estimation of the expected growth and change in return on capital for the companies Titan Cement and Motorola
At 2000 rub. The Greek cement company Titan Cement reported operating income of 55,467 million drachmas on investment capital of 135,376 million drachmas. The effective tax rate appears to be 24.5%, and we estimate the capital income for the company:
It is acceptable that the company faces a decline in capital income for both existing assets and new investments - up to 29% of the current capital, but its reinvestment ratio will be lost at the level of 35%. The estimated rate of growth of the offensive fate is estimated as follows:
Let's take a look at the Motorola company. U 1999 r. This company has a low reinvestment ratio of 52.99% and a return on capital of 12.18%.
It is acceptable that the return on capital for the Motorola company will move around the average margin of 22.27% if the company gets rid of its unfortunate investment in Iridium and returns to its current levels. It is acceptable that over the next five years the income on capital will move from 12.18 to 17.22%. For the sake of simplicity, it is also acceptable that over the course of five years, changes are made linearly. The recent rapid growth rate of operating income over the past five years can be assessed as follows:
The increase in return on capital at the beginning of five years led to a higher rate of growth in operating income of Motorola over the period under review. Please note that this calculation shows that the return on capital for a new investment in the current period is 17.22%.
chgrowth.xls is a table that allows you to estimate the current rate of growth of operating income for a company, which shows the change in income on capital over the hour.
Negative capital income scenario. The third, most important scenario for assessing growth is the situation where the firm is spending money and has a negative return on capital. As the company spends money, the reinvestment ratio may be negative. To assess the growth of such firms, we can obtain information about profits and earnings, which can be used to predict the growth of revenue. Then, to assess the operating income of future companies, we estimate the operating margin of the company. If the expected margin is positive, then the estimated operating income will also be positive, allowing traditional approaches to be used when evaluating these companies. We also appreciate the reinvestment of the company, which is necessary to achieve an increase in revenue, linking the revenue with the capital invested in the company.
- It is noteworthy that 17.22% are exactly “on track” between the current income on capital and the average value for Galusia (22.27%).
- You are confident in the fast pace of growth. So, if the accumulated income grows by 25% over three periods, then the estimated growth rate is estimated at the current rate: The estimated growth rate is short = (1.25) 1/3 – 1.
Nutrition 57. Integral indicators of varsity management based on the vbm approach. Methodology for organizing the display of excess profits. Main indicators of the effectiveness of varsity management
For the practical implementation of a control system based on FSC, a system of target efficiency standards (indicator systems) and corporate standards is developed. Purposeful standards of efficiency and specific values of the FSC, established in the form of planned tasks for the company as a whole, business units, functional divisions, regional branches, aka, to the company's employees (particular robots are built by specific people).
As key integral indicators, A. Damodaran recommends that the return on capital invested and the reinvestment ratio be considered. Such an approach, in the author’s opinion, allows us to enhance the prospects for the development of the company and the interests of shareholders. First of all, the return on invested capital determines the return on investment and the profit that the business takes away from the future for saving the flow rate of the efficiency of its assets.
In other words, the reinvestment ratio allows you to grab back a portion of the profits that will be directly spent on new investments in the future, in order to ensure that profits do not increase. Thus, the company cannot rely on increasing profits from sales without reinvesting part of this profit into working capital and net capital expenditures; and the net capital expenditure required by firms to support a given growth rate may result in a proportional return on investment.
The model shows the return on investment capital and the reinvestment rate as follows:
ROIC = EBIT (1 - T) / (BD + BE), (1)
RR = ((CE – D) –Δ NCWC) / EBIT(1 – T) , (2)
de ROIC- Return on capital;
EBIT- income before payment of taxes and taxes;
T - profit rate;
BD- balance varity of crops;
BE- balance sheet value of shareholder capital;
R.R.- Reinvestment coefficient;
C.E.- capital expenditures;
D- Depreciation;
ΔNCWC- Increase in net working capital.
Multiplying the left and right parts of expressions (1) and (2), we remove:
On the right side, the rate of capital growth is accelerated as the capital increases in the value of all capital. This growth itself results in the profit of the enterprise at a constant rate of reinvestment and profitability. Star:
g =ROICXRR, (4)
de g- Rate of profit growth.
Thus, the rate of increase in profits, which indicates the development potential of the company, based on A. Damodaran’s model, the return on assets and the company’s policy in the reinvestment field.
Widely known factor models of return on equity (ROE), developed by DuPont.
In the 70-80s, there were low indicators that indicate the most important benefits of a market economy - increased shareholder goodness, and therefore capitalization. The most widely known and expanded indicators are the “Net Earnings on Primary Share” (EPS) indicator and the “Price to Earnings” (P\E) indicator. At this time of expansion, the EPS indicator is obligatory for joint stock companies, and its significance may be reflected in public information (Report about profits No. 2).
The development of the concept of penny flows led to the creation of a whole group of exponents. In terms of evaluation and business management, two of them are most often discussed: “Penny flow for all capital” and “Penny flow for capital.”
Penny flow for all capital= Inflow of capital – Inflow of capital = [Revenue in the base period * (1+ rate of revenue growth) * Return on sales * (1 – interest rate)] – net capital investments – increase in net working capital.
Development of the paradigm of value and efficiency of firm activity in economic science
Table 1.3
|
1930-50 rubles. |
1970s rocks. |
1980s rocks. |
1990 rubles |
|
* DuPont Models; |
* Net earnings per share (EPS); |
* Market ratio and balance sheet market share ratio (M/B); |
* Economical added value; (EVA), |
|
* Return on investment (ROIC) * return on capital (ROE) |
* Ratio between share price and net earnings per share (P/E) |
* Return on shareholders' capital (ROE); * Return on net assets (RONA); * Cash Flow |
* Profit before payment of wages, taxes and depreciation (EBITDA); * Rinkova added vartіst (MVA); * Penny flow of capital return on investment (CFROI) |
The penny flow for shareholder capital includes one more parameter - the borg, which is derived from the proceeds of the base period that is being adjusted.
In the mid-80s, Stern Stewart Management Services developed an EVA display based on a traditional concept accounting aspect excess income RI. Much later, McKinsey introduced an essentially similar method for economically generating EP.
Based on the EVA concept, the business value is the balance sheet value, increased by the flow rate of future price additions. The developer of this model, Stern Stewart, found a correlation between the value of the EVA indicator and market performance, based on 618 American companies (1990).
EVA Rosarak is based on two methods:
EVA = NOPAT - WACC x C, (5)
NOPAT (Net Operating Profits After Taxes) - profit after payment of taxes,
C – investment capital.
EVA = (ROI - WACC)XC, (6)
ROI (Return on Investment) – return on invested capital
EVA is also an indicator of the efficiency of management decisions: a constant positive value of this indicator indicates an increase in the company's profitability, while a negative value indicates a decrease. The greater value of EVA flows into the factors that take part from the model, the manager has greater ownership of the company.
With this increased profitability of business, you can:
1. for an increase in income from sales and a decrease in the amount of expenses. This can be achieved in a variety of ways - through cost management (payroll leadership strategy), improving the efficiency of business processes through reengineering, business portfolio management, etc. (differentiation strategy ii), shortening unprofitable production, etc.;
2. by expanding the investment of costs in investment projects, the profitability of which exceeds the cost of capital, receipts before the implementation of such a project;
3. by improving the efficiency of asset management - sales of non-core, surplus assets, shortening the terms of turnover of receivables, inventories, etc.;
4. The way to manage the capital structure, leading to a decrease in the average value of capital, and also to an increase in the value of enterprises.
Fig.1.1. The main factors that form EVA.
EVA is the broadest indicator of assessing the process of creating business value. The reason for this is that this indicator is very easy to develop, and also allows you to evaluate the effectiveness of both the preparation of the drug and other products. However, the simplicity of the design of the EVA display itself is matched by the difficulties associated with making necessary amendments to stock models.
The most significant adjustments to the income and value of capital during the expansion of business value based on the EVA model:
Part of the intangible assets (for example, NDDKR), which will ensure the capture of benefits from the future, with the expansion of EVA can be capitalized, and not written off from spending. Thus, the amount of capital may be adjusted to the amount of capitalized intangible assets after accrued depreciation. The NOPAT value is adjusted to the amount of depreciation for the analyzed period.
The legal amount of deferred taxes is added to the amount of capital. To expand the NOPAT value, the increase in the amount of contributions due during the analysis period is also added to the amount of income.
When expanding EVA, it is necessary to reduce the income that is generated by the funds invested in the enterprise. For these reasons, when the amount of capital expands, goodwill accumulates.
The EVA indicator is low. In advance, from this value the initial valuation of the invested capital flows in: if it is underestimated, then the valuation is high and inadvertently. This reduces the objectivity of the development results. In addition, the adjustment of the balance sheet value of the invested capital introduces additional subjectivism before assessing the value of the business, as it does not reflect the real market situation.
The significant shortcoming of the model also lies in the fact that the main part of the added value when formulas are frozen falls in the post-forecast period. To change the influx of this negative factor, it is practical to use not the absolute values of EVA, but the absolute increments of this indicator, which complicates the interpretation of their results and reduces the analytical value of the model.
On the thought of the dosledniki, showman Market Value Added (MVA) - also an obvious criterion for the creation of excellence. According to the theory corporate finance MVA reflects the discounted value of all real and future investments.
MVA = Market Capitalization (Market Value of Shareholders' Capital) + Market Value Borgu - Aggregate investment capital (balance sheet).
The business return is measured as the difference between the market return of the company's total capital and the total investment capital.
Within the framework of this model, the assessment of the effectiveness of property management is based on the following positions:
If market capitalization / investment capital > 1, then MVA is positive, then the market evaluates the business as a business that is growing in value (the business has a positive market rating and investments in the new year),
If ROIC/WACC > 1, then the business is also profitable and suitable for investment.
Prote, the assessment of the effectiveness of the functioning of a business is focused on this model, but there is a danger in itself: it is possible that a decision can be taken as a matter of course, such as putting a short-term influx on the exchange rate of shares, or there is a certainty in the long-term perspective (for example, the program will shorten the expenditures for the share of large-scale budget cuts ) NDDKR).
These researchers conceptually extend the MVA model to valuation and performance management methods that are based on the EVA concept, and view MVA as a modification (form) of the EVA model. The connection between the indicators that can be seen is clearly understood. So, for example, market value is expressed in the MVA indicator, which is essentially the discounted amount of all future EVA.
Shareholder Value Added (SVA) indicator ) - The shareholder value in Alfred Rappaport's work is indicated as an increase between two indicators - the shareholder capital value after each operation and the same capital value before the operation. A. Rappaport developed a model that describes changes in the company's profitability and insurance changes in the period of competitive advantages, current level of sales, income tax rates, investments in working capital, net capital investments, average important profitability and capital.
In the current financial approach, there is often another interpretation of this model: SVA – an increase between the share capital ratio (for example, by the method of discounted penny flows) and balance sheet varity of shareholder capital.
These indicators are based on the criteria that characterize the change in the company’s value – the shareholder value added (SVA). G
The main disadvantage of this model is the complexity of the development and complexity associated with forecasting financial flows.
Cash Flow Return on Investment (CFROI) indicator - penny drip contributions on investments.
Within the framework of this model, the penny flow of return on investment (CFROI) is calculated according to the formula:
CFROI= Corrected penny inflows (cash in) at current prices / adjusted penny outflows (cash out) at current prices.
The development of CFROI includes the following stages:
1. Identification of penny inflows in terms of the economical term of asset service. This term is calculated as the ratio of the total value of assets to depreciation expenses.
2. The growth of the value of total assets, as a result of the withdrawal of pennies.
3. Adjustment of both outflows and inflows by the inflation coefficient, so that they are reduced to the current prices.
4. Making low-level corrections to variegated values to level out noise that is affected by different loudness systems. (For example, for the disbursement of penny inflows, net income is adjusted to the amount of depreciation, deposits for deposit capital, payments for contracts leasing etc. The balance sheet value of assets is adjusted to the amount of accumulated depreciation, the value of the mine acquired under leasing agreements, etc.)
5. The composition of CFROI is consistent with the formula.
If the CFROI indicator exceeds the average level of profitability required by investors, the business creates profitability; However, if the CFROI is lower for the required income, then the profitability of the business will decrease.
The advantage of the CFROI indicator is the amount of penny flows that are generated by business, as well as the image of the inflation factor (the amount of penny flows that are generated by current and future assets, as well as initial investments are expressed at actual prices). One of the main shortcomings of the model is that the result is expressed not in the amount of the created (or constructed) value, but in the appearance of the indicator, so for some non-financial managers the interpretation of this indicator may be just as clear , for example, EVA. In addition, the structure of the CFROI display is complex, since it is necessary to identify all penny flows that are generated by both current and future assets.
The indicator (CVA, RCF) is calculated as the return of penny flows from the invested capital and the insurance (as opposed to the CFROI indicator) in the obvious view of spending on the receipt and maintenance of capital from various sources (middlely important at the price of capital).
This indicator is based on the concept of residual income, and the formula for its breakdown looks like this:
RCF = AOCF - WACC * TA,(7)
RCF - Residual Cash Flow - penny added to the amount,
AOCF (Adjusted Operating Cash Flows) – scoring of operating cash flows,
WACC – equity capital is of average importance,
TA – total adjusted assets (adjustments that are made when decomposing the valued values, similar to those considered during the analysis of the EVA concept).
The boss of the company should note that such a rich system demonstrates the inferiority of officials of the higher level from officials of the lower level and shows how the indicator of excellence is related to the flow of activity. For example, the improvement of business processes can lead to a reduction in the company's operating expenses. This results in increased operating profit and increased profitability of all activities and invested capital.
The general sense of reinvestment is the movement of capital from one direct investment activity to another by taking away higher profits. This method is used to make money in order to invest money in promising projects, and, obviously, to increase money at a faster pace.
Reinvestment takes another place, which means that previously withdrawn profits are not spent, but are invested in this way, so that they can also generate additional income. The most extensive option for reinvestment is a bank deposit through the capitalization of bank accounts. The essence of this lies in the fact that the hundreds, previously accumulated on the main investment amount, are added to it and hundreds are also added to them.
If the reinvestment scheme is not followed, then the income from investment will be approximately at the same level. For example, if you look at that very contribution, then hundreds of sums will be added to that very amount. With the subsequent reinvestment of the capital, the amount of money invested will increase, in proportion to the amount of additional income that will increase over time.
- You can get a larger profit for each additional investment
- It’s enough to complete the main contract and not be in trouble, so you can save additional income
- For reinvestment, you can use various financial instruments, for example, deposits, securities, dividends
To understand exactly how you can increase your income, it is necessary to understand the basic concepts, mechanism and rules of reinvestment.
Reinvestment ratio
The reinvestment ratio is an indicator of profitability in 100% terms. It shows the level of reinvestment of capital and investment activity, and the greater the value, the higher the return on investment.
Reinvestment can be of two types:
- externally, whose entire income goes directly to investment activities
- private sector, in which not the entire profit is reinvested, but only part of it
Of course, the reinvestment coefficient can be increased to 100% (with the first option) or 0-99% (with the other option). In some situations, an investor can independently decide which type of reinvestment to invest, for example, invest 50% of the dividends withdrawn, and invest the other 50% for government purposes. However, in some situations, the use of financial instruments can be either a choice or a alternative to withdrawing profits - reinvest or not. For example, when opening a bank deposit, the client is required to either add all the increases to the principal amount (reinvestment and capitalization) or save them for another purpose.
Reinvestment of hundreds of assets
The reinvestment of capital from bank deposits is called capitalization, for which the income of the bank is insured to the principal amount. This allows you to increase your income, and hundreds of hundreds of units will be added again, and the main amount of the deposit will be increased by this amount.
Capitalization and reinvestment are sometimes called compound capital, if the capital under the contract is insured by the insurance of the capital. The loan is based on a special formula, and for the convenience of clients, a calculator is installed on the official credit site for a quick profit, which can be withdrawn.
The amount that will be withdrawn when reinvesting hundreds of dollars depends on several factors, and itself:
- interest rates under the bank deposit agreement
- period for charging cell phones (monthly, quarterly, etc.)
- the term that defines the bank deposit agreement
Naturally, if the higher the monthly rate and the term of the contract, the investor can take away the greater profit. The amount of profit from reinvestment may also be significant, since hundreds of capitals are being absorbed at high frequency, leaving the mechanism to continue to operate at an earlier rate. However, this moment is also covered by credit conditions, and therefore, with deposits made from monthly capitalization, the interest rate may be much lower, regardless of the possibility of capitalization and reinvestment.
It is important that an investor can independently choose the option - reinvest hundreds of dollars or more, and in order to withdraw more income, it is necessary to enter into a contract of exchange at that time.
Reinvestment formula
The simplest form of reinvestment of assets can be presented in the following form:
Deposit amount = main amount + (basic amount * total amount) N
where the main amount is money contributed by the investor, or taken as a legacy of the previous capitalization;
vіdsotok – interest rate under the deposit agreement;
N – number of periods of placement of piles.
This formula must be carefully corrected, since capitalization proceeds sharply, since the multi-hundredth rate per deposit is indicated as a real multi-hundredth. If capitalization is carried out more often, then it is necessary to make changes to the formula:
Deposit amount = main amount + (basic amount *) N
During the period of capitalization the following are 2 (period), 4 (quarterly), 12 (currently).
Example of the breakdown of reinvestment of buildings (the interest rate is still the same as 6%):
|
Capitalization period |
Pochatkova sum |
Expansion of profit upon reinvestment |
Zagalna sum |
|
10 000,00 * 6% = 600,00 |
10 600,00 |
||
|
10 000,00 * 6% / 365 * 183 = 300,82 |
|||
|
10 300,82 * 6% / 365 * 182 = 308,18 |
10 609,00 |
||
|
10 000,00 * 6% / 365 * 91 = 149,59 |
|||
|
10 149,59 * 6% / 365 * 91 = 151,83 |
|||
|
10 301,42 * 6% / 365 * 91 = 154,10 |
|||
|
10 455,52 * 6% / 365 * 92 = 158,12 |
10 613,64 |
||
|
10 000,00 * 6% / 365 * 31 = 50,96 |
|||
|
10 050,96 * 6% / 365 * 28 = 46,29 |
|||
|
10 097,25 * 6% / 365 * 31 = 51,45 |
|||
|
10 148,70 * 6% / 365 * 30 = 50,05 |
|||
|
10 198,75 * 6% / 365 * 31 = 51,97 |
|||
|
10 250,72 * 6% / 365 * 30 = 50,55 |
|||
|
10 301,27 * 6% / 365 * 31 = 52,49 |
|||
|
10 353,76 * 6% / 365 * 31 = 52,76 |
|||
|
10 406,52 * 6% / 365 * 30 = 51,32 |
|||
|
10 457,84 * 6% / 365 * 31 = 53,29 |
|||
|
10 511,13 * 6% / 365 * 30 = 51,84 |
|||
|
10 562,97 * 6% / 365 * 31 = 53, 83 |
10 616,80 |
As can be seen from the table, the monthly reinvestment of hundreds of millions of dollars is the most favorable option for the investor, and since the sums and terms will be larger, then the withdrawal of profits will become more likely.
Reinvestment of capital
Reinvestment of capital means the addition of valuable papers and stability and the vicarious difference in exchange rates and prices when buying/selling for further investment in these sectors. In this case, the investor must be aware of how exchange rates and prices in these segments change, so as not to waste their chance of withdrawing profits and re-investment. In this case, there is a real responsibility for the reinvestment of capital from deposits, while for the other type, reinvestment is carried out automatically with the help of an additional banking computer program.
When reinvesting capital, it is necessary to pay attention to such important points:
- The economic and financial markets are even volatile, so an investor can withdraw profits and spend some of the money as surplus;
- in some cases it is necessary to pay a tax, for example, during the sale of inviolability for less than 5 years;
- price cuts can be quite noticeable, and, for example, with a sharply reduced stock exchange rate, you will have to either recognize the bumps or check for increases in their prices;
- the process of investing in the safety and security of valuable papers may drag on for a long time, and therefore reinvestment will also be impossible for the next hour;
- These investments are transferred to the withdrawal of additional income, which can be reinvested. For example, when purchasing property, you can rent it out and collect rental payments, and with added shares, you can collect dividends that are paid by the companies. Passive income that is withdrawn can also be used for reinvestment purposes.
Reinvestment of dividends
When holding shares, investors and shareholders withdraw dividends from the company that held valuable papers. Such passive income can be reinvested, and the owner independently decides to direct all dividends to investments or a part thereof.
Dividends are paid to the shareholder's account, and the shareholder is not insured up to the principal amount, and even there is none - it is included before the shares. In this way, the investor withdraws “live” money, which he can use at his own discretion. In this case, they can be used to purchase shares of the company, and others, and, naturally, can use a completely different direction of investment - property, bonds, currencies , deposit.
Profitability of reinvestment
The profitability of reinvestment is an economic indicator that reflects the viability of re-investment of the withdrawn profit. The won is closely related to profitability, as there are two mutually related investment criteria.
From the terminology introduced earlier, we will try to identify profitability and profitability for specific capitalization terms. For which the speed is determined by the following formulas:
Profit = residual amount - primary amount
Profitability =
|
Capitalization period |
Pochatkova sum |
Kintseva sum |
Pributkovyst |
|
|
10 600,00 - 10 000,00 = 600,00 |
600,00 / 10 000,00 * 100% = 6% |
|||
|
10 609,00 - 10 000,00 = 609,00 |
609,00 / 10 000,00 * 100% = 6,09% |
|||
|
10 613,64 - 10 000,00 = 613,64 |
613,64 / 10 000,00 * 100% = 6,14% |
|||
|
10 616,80 - 10 000,00 = 616,80 |
616,80 / 10 000,00 * 100% = 6,17% |
As can be seen from the table, with frequent reinvestment, the profitability moves up, which, naturally, flows into the size of the profit withdrawn at the end of the investment period.
Reinvestment of bonds
Reinvestment of bonds is similar to that for reinvestment in company shares, as the mechanisms of operation of these securities are similar. The bond is divided into shares because it is a bourse price papier, for which coupon income is paid - a kind of hundred-dollar wine town for the payment of cash. The number is set by the issuing company and does not change at all times for the value of the paper.
In addition, the volume of bonds transfers discount income, which is the difference between the purchase and sale prices of valuable papers. Naturally, what is the greatest discount, the greater profit from the end pouch is taken away by the hairdresser.
Both coupon and discount income can be obtained from further investments, as well as from a specific bond that is in power. For such a profit, you can invest money in other securities (shares and bonds), as well as property, currency, mutual funds or deposits.
Reinvestment rate
The reinvestment rate is an indicator that indicates the investor’s activity in terms of reinvestment of income for a higher income. Of course, there is a high level of reinvestment in these deposits, which allow you to redirect profits in a very short period of time to remove additional income.
One of the high levels of reinvestment are deposits that allow you to invest thousands of dollars in capitalization to capture more of your profits. While there is a shortage of valuable papers, given their high value, reinvestment can be done every day, depending on the company's dividend policy. However, if the investor is engaged in trading shares and frequently carries out these operations, then in this case the rate of reinvestment will also be high.
The low level of reinvestment may be due to the contribution to the integrity of the property due to the specific nature of this type of investment. It is significant that in this case the period for reinvestment will be trivial, because the amount of profit withdrawn may be large.
Reinvestment rate
Although there is no normative significance for reinvestment of income, it is necessary to look at the nutritional value of this skin type. The reinvestment rate can vary depending on the direction of investment chosen. For example, for a deposit with a monthly capitalization, we become 100% for the purpose of investing hundreds of dollars up to the principal amount.
For dividends, the tax may be reduced to 50%, since the shareholder expects to directly benefit from the increase in his profits or less than half of his income. In addition, the reinvestment rate can be increased to 0%, for example, since the deposit does not transfer the investment amount to the principal amount and the shareholder cannot buy shares of his company through Proposition for the sale of valuable papers.
With a given rate of reinvestment, it is necessary to adjust to the direct impact of investment activity and the impact of certain factors on it. With the greatest minds:
- type of investment
- term of investment
- profitability of investment activity
- Availability of additional income
- culpability of situational risks in the conduct of activities
Analysis of these factors allows the investor to determine the rate and profitability of reinvestment and establish situations and risks that may interfere with a positive result.
