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Economic Analysis: Theory and Practice
 

A methodology for investment-attractive industrial enterprise selection and assessment

Vol. 15, Iss. 7, JULY 2016

PDF  Article PDF Version

Received: 20 February 2016

Received in revised form: 3 March 2016

Accepted: 27 April 2016

Available online: 27 July 2016

Subject Heading: INVESTMENT ANALYSIS

JEL Classification: G11, G31, G32

Pages: 29-44

Kalacheva A.G. South Ural State University, Chelyabinsk, Russian Federation
kl.ann@mail.ru

Subject The article considers the assessment of investment appeal of industrial enterprises. Choosing an investee, the investor needs a reasonable quantitative assessment of investment attractiveness of candidate enterprises.
Objectives The aim is to develop a methodology for phased selection of candidate enterprises based on integral estimation of their investment appeal.
Methods The methodology development draws on systems approach, methods and techniques of investment analysis, mathematical statistics, methods of comparison, and expert estimates.
Results Due to huge volumes of information on candidate enterprises' investment appeal, I propose to select them in two stages. First, to select potential investees by particular indices of the model that are the most important for specific investor. At the second stage, the selection criteria are the values of group indices of certain types of enterprise's investment potential and risks inherent in its operations. Finally, the investee having the highest integral index of investment attractiveness is selected from the generated list as the best option for investment.
Conclusions If applied, the developed methodology will enable to make a stepwise selection of enterprises, thus reducing the volume of laborious and often unreasonable calculations and accelerating the time of result generation that would meet the interests of certain investor, and to present the algorithm of result formation in order to create a software product. The methodology may be interesting for investors to make informed decisions on choosing investees and for industrial enterprises to assess their investment appeal when developing management solutions.

Keywords: industrial enterprise, investment attractiveness, appeal, assessment methodology, phased selection

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