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

Vasil’ev Alexander (), Vasil’eva Nataliia () and Tupko Natalia ()
Additional contact information
Vasil’ev Alexander: Odessa I. I. Mechnikov National University
Vasil’eva Nataliia: Odessa State Academy of Civil Engineering and Architecture
Tupko Natalia: National Aviation University, Kyiv

Technology audit and production reserves, 4(36) 2017, 2017, vol. 4, issue 4(36), 43-49

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.

Keywords: scenario method; break-even and project acceptability margin; risk ratings of project parameters (search for similar items in EconPapers)
JEL-codes: G32 (search for similar items in EconPapers)
Date: 2017
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