What is an investment project?

An investment project is a document that the investor is responsible for making, which presents in a very complete and detailed manner the contents related to the implementation of this investment later for the purpose of affirming the integrity of the project. the correctness of the investment policy and the “effectiveness” of the capital. An investment project is a document that honestly reflects the results of specific research on all issues of: market, economy, technology, finance, etc., which directly affect the operation, exploitation and calculation of investment projects. return on investment.

What is investment project appraisal?

Investment project appraisal is the objective, scientific and comprehensive study and analysis of all the economic and technical contents of the project, in relation to the natural environment, socio-economic conditions to decide on an investment project. investment decision, capital financing for the project. This is a process of checking and evaluating the basic contents of the project independently, separate from the project drafting process. Project appraisal creates a solid basis for effective investment activities. The conclusions drawn from the appraisal process are the basis for units, establishments, and competent state agencies to make investment decisions, to allow investment or to finance the project. The investment project appraisal service of Hoang Quan Valuation Joint Stock Company will help investors and businesses that want to invest to overcome the subjectivity of project creators and help detect and supplement supplement the shortcomings in each analysis content of the project. Project appraisal is a part of investment management, it creates a solid basis for the effective implementation of investment activities.

Appraisal object

Valuation of an investment project is the objective, scientific and comprehensive research and analysis of all the economic and technical contents of the project, in relation to the natural and socio-economic environment in order to investment decision, capital financing for the project

Appraisal purpose

Assessing the rationality of the project manifested in the “effectiveness” and feasibility of each project’s content and calculation method Evaluating the feasibility of the project is reflected in the consideration of the implementation plan, the legal environment. Evaluation of the effectiveness of the project in terms of both financial and socio-economic aspects

Appraisal records

  • Certificates of land use rights
  • Land allocation decision
  • Detailed project planning
  • Project planning drawings

Business valuation process

The enterprise valuation process complies with the price appraisal process in the Valuation Standard No. 05 promulgated under the Decision No. 24/2004/QD-BTC dated October 7, 2005 of the Ministry of Finance. In general, the business valuation process is similar to the valuation process of other assets, but the specific content of the steps needs to be tailored to the business valuation. The business valuation process includes 6 steps:

1. Identify the problem

In this step it is necessary to pay attention to the following issues: 1.1. Set Appraisal Purpose 1.2. Preliminary identification of businesses that need valuation: legal , type, scale, location, facilities, branches, assets, products, brands, markets, etc. 1.3. Determining the value basis of the appraisal 1.4. Determine the documents required for the appraisal

2. Make a price appraisal plan

– The valuation plan is to clearly define the steps work to be done and the time to perform each step work as well as the entire time for the appraisal. – The content of the plan must show the following basic tasks: Determine the supply and demand factors appropriate to the function, characteristics and rights associated with the business being traded and the characteristics of the market; Identify documents to be collected about the market, the enterprise, and comparative documents; Identify and develop documentation sources, ensure resources are reliable and verifiable; Develop the research schedule, determine the order of data collection and analysis, and the allowable time limit for the order to be performed; Prepare an outline for a report on valuation results.

3. Research the business and collect documents

In this step it is important to note:
  • Actual survey at the enterprise: inventory of assets, survey of the actual production and business situation of the enterprise.
  • Collecting information, first of all, information and documents from inside the enterprise: Documents on production and business situation, financial – accounting – audit reports, system of production units and agents , characteristics of the executive management team, employees, workers, etc. In addition, we also pay attention to collecting information outside the enterprise, especially the product market of the enterprise, the business environment, the business industry. , competitors, government policy, etc. The appraiser should take the necessary steps to ensure that all data sources on which it is based are reliable and suitable for the appraisal. It is common market practice for the appraiser to take reasonable steps to verify the accuracy and reasonableness of the sources.

4. Assess the strengths and weaknesses of the business

It is necessary to evaluate the strengths and weaknesses of the enterprise in the following aspects: production and business, equipment, technology, skills of employees, management apparatus and management capacity, debt capital, financial indicators. market, business environment.

5. Determining valuation methods, analyzing data and documents and estimating enterprise value.

Appraisers and business valuations based on opinions, results work of other appraisers or other professionals are necessary when valuing a business. A common example is relying on real estate appraisal results to value real estate assets owned by businesses. When relying on the opinions and results of other appraisers or other experts, the business valuer should take steps to ensure that the services are performed in a professional manner. reasonable and reliable conclusions.

6. Report preparation and valuation report preparation

The preparation of reports and preparation of business appraisal reports is similar to that of other assets. The report on enterprise valuation results must clearly state: 6.1. Valuation purposes 6.2. The subject of valuation must be clearly described: It is necessary to clearly state that the object of valuation is the entire enterprise, the enterprise’s interests or a part of the enterprise’s interests, which belong to the whole enterprise or to separate properties owned by the enterprise. Description of the valuation enterprise, including the following: * Type of business organization * Business history * Outlook for the industry’s economy * Products, services, markets and customers * Sensitivity to seasonal or cyclical factors * Competition * Manufacture * Assets include tangible and intangible assets * Human * Manage * Owned * Prospects for businesses * Past transactions of similar ownership interests in the business. 6.3. Valuation basis of value: definition of value must be stated and determined 6.4. Method appraisal Valuation methods and reasons for applying them; calculations and logic in the application of one or more valuation methods; derived from variables such as discount rates, capitalization rates or other appraisal factors; arguments for aggregating different valuation results for a single value result. 6.5. Valuation assumptions and constraints, and important premises and assumptions for value must be stated. 6.6. State the reason for applying in the report If there is a certain aspect of the appraisal work that requires application to the provisions of the standards or guidelines that such application deems necessary and appropriate. 6.7. Financial analysis * Summarize the summary of assets and income statement for a certain period in accordance with the purpose of valuation and the characteristics of the business. * Adjustments to the original financial data (if any). * Basic assumptions for the formation of the balance sheet and income statement. * Financial performance of the business over time and comparison with similar businesses. 6.8. Result of valuation 6.9. Scope and time limit for valuation 6.10. Signature and confirmation The appraiser who signs the valuation report is responsible for the contents implemented in the report. Excerpted from: Short-term training document for specialized knowledge in price appraisal of the Department of Price Management – Ministry of Finance

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