Answer to Question #205056 in Economics for pema

Question

Develop a strategy for producing financial statements including income statements,

balance sheet, statement of retained earnings, and cash flow for the purpose of showing

the financial position of your firm to the board of directors.

Explain the types of investments that are in the company’s portfolio by offering an

analysis of net and present values.

Your strategy should incorporate the analysis of relevant cash flows and the capital

budgeting process and provide some insight to the firm’s various sources of long-term

financial planning and policies.

Answer 1

The investment activity of an enterprise is an important integral part of its overall economic activity. It is difficult to overestimate the value of investments in the economy of an enterprise. Modern production is characterized by a constantly growing capital intensity and an increasing role of long-term factors.

 

In order for an enterprise to function successfully, improve product quality, increase costs, expand production capacity, increase the competitiveness of its products and strengthen its position in the market, it must invest capital and invest it profitably. Therefore, he needs to develop an investment strategy and improve it to achieve the constantly above-mentioned goals.

Investment concept

In the most general form of investments such as cash, bank deposits, shares, shares and other securities, technologies, machinery, equipment, licenses, including for trademarks, loans, any other property or property rights, intellectual values ​​invested in objects entrepreneurial activity or other types of activity in making a profit (income) and achieving a positive social effect.

According to the financial definition, investments are all types of assets (funds) invested in economic activities in order to generate income. The economic definition of investment as the cost of creating, reconstruction and technical re-equipment of fixed capital, as well as associated with this change in working capital. After all, changes in inventories are largely due to the movement of costs of fixed assets.

Investment in a market economy as a process in any form is inextricably linked with the receipt of income or any effect. Investments are a resource, spending which you can get the intended result. Thus, the entity includes a combination of two third-party investment activities: input and output.