Investment project evaluation in the event of a threat to solvency (bankruptcy)
Importance The article deals with methodological aspects of investment project evaluation for arbitration management purposes. Insolvent debtor's investment activity has certain specifics; however, the methodological support for the corresponding analysis is not available. Draft federal standard for analysis of organization's financial position and results of its financial, economic and investment activities during procedures applied in bankruptcy cases does not solve the problem either. Objectives The study aims to provide a rationale for efficient methodological approaches to evaluation of investment projects of organizations going out of business (bankrupts). Methods Using the method of theoretical generalization, we examine specifics of investment analysis under insolvency, focusing on investment and operational phases of vested capital. Results Requirements to opinion preparation on debtor's financial position should include key performance criteria for investment projects. These criteria correspond with interpretation of investments in the context of generated cash flow. We present a unique methodology to substantiate investment decisions using a modified indicator of net present value. Conclusions and Relevance The proposed algorithm of evaluation may be useful for arbitration managers, as well as at pre-trial stages of crisis management of organizations demonstrating signs of financial distress.