Problems And Amendments In The Financial Evaluation Of Investment Projects

Analysis and evaluation of project plays a very important role in decision-making of project.Analysis and evaluation of projects gains more and more attention with economic and social development of our country.Scientific and effective system of project analysis and evaluation of investment projects not only help protect the normal construction and operation,but also protect national interests or the collective interests of private investors in the project implementation.Financial analysis of indicators and essential factor are important component in project analysis and evaluation system of investment project,which also is the core.Current basic theoretical methods of investment projects financial analysis can be simply summarized as surplus power capacity analysis,solvency analysis,and uncertainty analysis.Profitability analysis is including before funding analysis and after financing analysis;Solvency analysis investigates the capacity of repay capital and interest for project on schedule.Although the theory and practice forming a perfect system with many years,there are still further room to improvement,for example,issues of interest during construction impacts the cash flow of before funding through impacting income taxes,uncertainty selection of benchmark yield,accounting policy impact on evaluation conclusion and limitation of uncertainty analysis and etc.The parer proposes evaluation system revised method that adopts Net Present Value Rate(NPVR),re-discounting after investment return period,and revised method of benchmark income index through studying for above problems.Although the research methods and recommendations exits some limitations,it still provides references for improving evaluation system.The paper uses example making contrastive analysis for the former evaluation system and revised evaluation system to verify its practical effect.The article mainly adopts to the method that is combining normative analysis with example to deal with relative problems on investment projects financial analysis.The article introduces real case to exemplify based on the normative analysis.