Investment

In private companies and in the public sector, investments are meant to buy or produce on its own (“in economy”, by using company terminology) tangible capital goods such as equipment, machinery, warehouses, intangible goods such as research or advertising campaigns, resources to be used in the production process, as raw materials, and finally, stocks of finished products.

Afterwards there are investments which are not included in the balance sheet of a private company, but when it is due, it can be included in the social report, such as investments in staff training or in less polluting production systems. In this case, we speak about investment in a broad sense, given that corresponding costs are part of the current expenditure.

Corporate finance considers investments from the point of view of its required capital, the cost of the various capital sources, the choices between the different debt amortisation plans in order to invest and between distinct investments that generate different cash flows.