Development of combined method for analysis of financial risks of investment project

Authors

DOI:

https://doi.org/10.15587/2312-8372.2017.108527

Keywords:

scenario method, break-even and project acceptability margin, risk ratings of project parameters

Abstract

In this article, the object of research is the methods of quantitative analysis of the financial risk of investment projects. Among the methods used in practice of this type, there is no universal method suitable for a comprehensive risk assessment of most investment projects in practice. Therefore, the problem of creating new or improving known methods of quantitative analysis of project risks is still relevant.

The authors of the article in their previous works developed a new method for assessing the risks of investment projects - an analysis of the financial stability of the project. One of the main drawbacks of this method is its determinism. In this article, the authors attempted to combine their method of analyzing the financial sustainability of the project with the scenario method. As a result of the combination, the two methods that make up the combination have become more universal. The method of estimating the margin of financial stability of the project has the ability to find the mathematical expectations of the margin for all project scenarios, and the scenario method now assesses not only the integral risk of the project as a whole, but also the project risks by its parameters. In addition, the scenario method has been able to find critical parameter values and their mathematical expectations. With the help of the new combined method of analysis of project risks, it is possible to build project ratings by descending risk and a matrix of risk and predictability of project factors. The projects with different structure of payments (from rental to arbitrary) are considered.

Author Biographies

Alexander Vasil'ev, Odessa I. I. Mechnikov National University, 2, Dvoryanskaya str., Odessa, Ukraine, 65029

PhD, Associate Professor

Department of Optimal Control and Economic Cybernetics

Nataliia Vasil'eva, Odessa State Academy of Civil Engineering and Architecture, 4, Didrihsone str., Odessa, Ukraine, 65029

PhD, Associate Professor

Department of Higher Mathematics

Natalia Tupko, National Aviation University, 1, Kosmonavta Komarova ave., Kyiv, Ukraine, 03058

PhD, Associate Professor

Department of Higher and Computational Mathematics

References

  1. Sharpe, W., Alexander, G. J., Bailey, J. W. (1998). Investments. Ed. 6. Prentice Hall, 962.
  2. Fabozzi, F. J. (1998). Investment Management. Ed. 2. Prentice Hall, 837.
  3. Lee, C. F., Finnerty, J. E. (1989). Corporate Finance: Theory, Method, and Applications. Harcourt College Pub, 800.
  4. Lukasevich, I. Ya. (1998). Analiz finansovyh operatsii. Metody, modeli, tehnika vychislenii. Moscow: Finansy, YuNITI, 400.
  5. Lukasevich, I. Ya. (2010). Finansovyi menedzhment. Ed. 2. Moscow: Eksmo, 768.
  6. Grachiova, M. V. (2001). Risk-analiz investitsionnogo proekta. Moscow: YuNITI, 351.
  7. Vorkut, T. A. (2000). Proektnyi analiz. Kyiv: UTsDK, 440.
  8. Vasiliev, А., Vasilieva, N. (2015). Reserves and limits of investment break even and acceptability of the project by values of the indicators of efficiency. Ekonomika ta derzhava, 4, 28–32.
  9. Vasilyev, A., Vasilyeva, N., Tupko, N. (2014). Levels of return, reserves of investment break-even and acceptability of the project. Scientific Bulletin of the Odessa National Economic University, 10, 51–63.
  10. Volkov, I. M., Grachiova, M. V. (1998). Proektnyi analiz. Moscow: Banki i birzhi, YuNITI, 423.

Downloads

Published

2017-07-25

How to Cite

Vasil’ev, A., Vasil’eva, N., & Tupko, N. (2017). Development of combined method for analysis of financial risks of investment project. Technology Audit and Production Reserves, 4(4(36), 43–49. https://doi.org/10.15587/2312-8372.2017.108527

Issue

Vol. 4 No. 4(36) (2017): Economics of enterprises

Section

Economic Cybernetics: Original Research

License

Copyright (c) 2017 Alexander Vasil'ev, Nataliia Vasil'eva, Natalia Tupko

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

The consolidation and conditions for the transfer of copyright (identification of authorship) is carried out in the License Agreement. In particular, the authors reserve the right to the authorship of their manuscript and transfer the first publication of this work to the journal under the terms of the Creative Commons CC BY license. At the same time, they have the right to conclude on their own additional agreements concerning the non-exclusive distribution of the work in the form in which it was published by this journal, but provided that the link to the first publication of the article in this journal is preserved.