Evaluation of Investment Attractiveness of Russian Oil Refining Industry Companies

This publication reflects the results of the authors’ research aimed at finding ways to reduce the complexity of appraising the investment attractiveness of potential recipients of investments. The purpose of the research is to create a methodology that will effectively manage not only the process of determining the recipients of investments but also the development of organizations to increase their investment attractiveness.
The authors provide an overview of the most significant publications that consider existing methods for appraising investment attractiveness, based on both financial statements and the market value of a business.
In the main part of the article, the authors conclude that data envelopment analysis (DEA) may be used to aggregate several different criteria of the investment attractiveness appraising in one number. The section that presents the empirical results of the study contains a description of a number of indicators of Russian oil refining companies and their aggregation based both on the method of expert assessments and a formal approach using the DEA. The examples only apply criteria calculated based on organizations’ financial statements.
It is emphasized that in real practice the first method is a very expensive and time-consuming procedure in comparison with the second, which provides a formalized agreement of the criteria used in the former method, and takes into account the situation in the entire market segment under study.
It is shown that the calculations made based on these two methods give approximately the same results. This indicates that the methodology proposed by the authors can be considered as an effective alternative to existing expert approaches to appraising investment attractiveness.
In the final part of the article, recommendations are formulated for improving the proposed methodological approach by including a number of market indicators that characterize the activities of potential recipients of investments.

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