Assessing the Efficiency of Use of Leasing as a Means of Fixed Assets Renovation at the Enterprise
The article analyzes modern methods for assessing the efficiency of use of leasingas a means of updating the fixed assets of an enterprise. It is noted that the use of a loan is generally more appropriate if the collateral that the borrower wants to own at the end of the term retains its value after...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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Research Centre of Industrial Problems of Development of NAS of Ukraine
2022-09-01
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| Series: | Bìznes Inform |
| Subjects: | |
| Online Access: | https://www.business-inform.net/export_pdf/business-inform-2022-9_0-pages-108_113.pdf |
| _version_ | 1797947957455093760 |
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| author | Blahun Ivan S. Nastoshyn Stepan Ye. |
| author_facet | Blahun Ivan S. Nastoshyn Stepan Ye. |
| author_sort | Blahun Ivan S. |
| collection | DOAJ |
| description | The article analyzes modern methods for assessing the efficiency of use of leasingas a means of updating the fixed assets of an enterprise. It is noted that the use of a loan is generally more appropriate if the collateral that the borrower wants to own at the end of the term retains its value after the term of the transaction. Leasing should be used for property that depreciates rapidly, such as high-tech products, and does not retain its value at expiration. It is shown that in order to make economically sound decisions, it is advisable to analyze a leasing agreement as an investment project. It is argued that the most effective method for assessing the efficiency of a leasing agreement is an approach based on assessing the efficiency of leasing compared with an alternative tool for raising funds for the acquisition of property, for example, with a loan. It is shown that the efficiency of a leasing agreement can be determined by comparing the total amount that will be paid to the lessor with the price of the leased asset itself, which could be bought for cash or on credit. The necessity of taking into account tax and other benefits provided for leasing operations is noted. It is argued that the analysis of the efficiency of leasing operations should be carried out taking into account both NPV and IRR by using an integral indicator of the efficiency of investing funds in the acquisition of fixed assets. The key differences between leasing and credit are analyzed. It was shown, that the main methods for assessing the effectiveness of a leasing transaction, which are compared with the acquisition of property through a bank loan, include: comparison of the internal rate of return of a leasing and credit transaction, comparison of discounted cash flows for leasing and lending, comparison of the lease rate with bank interest, comparison of payback periods of both investments, comparison of profitability of leasing and credit agreements. |
| first_indexed | 2024-04-10T21:34:54Z |
| format | Article |
| id | doaj.art-6cf5ea893c85401fa7d4c1815540adc4 |
| institution | Directory Open Access Journal |
| issn | 2222-4459 2311-116X |
| language | English |
| last_indexed | 2024-04-10T21:34:54Z |
| publishDate | 2022-09-01 |
| publisher | Research Centre of Industrial Problems of Development of NAS of Ukraine |
| record_format | Article |
| series | Bìznes Inform |
| spelling | doaj.art-6cf5ea893c85401fa7d4c1815540adc42023-01-19T12:29:35ZengResearch Centre of Industrial Problems of Development of NAS of UkraineBìznes Inform2222-44592311-116X2022-09-01953610811310.32983/2222-4459-2022-9-108-113Assessing the Efficiency of Use of Leasing as a Means of Fixed Assets Renovation at the EnterpriseBlahun Ivan S.0https://orcid.org/0000-0002-8423-9419Nastoshyn Stepan Ye.1https://orcid.org/0000-0001-6259-7357Vasyl Stefanyk Precarpathian National UniversityDrohobych Ivan Franko State Pedagogical UniversityThe article analyzes modern methods for assessing the efficiency of use of leasingas a means of updating the fixed assets of an enterprise. It is noted that the use of a loan is generally more appropriate if the collateral that the borrower wants to own at the end of the term retains its value after the term of the transaction. Leasing should be used for property that depreciates rapidly, such as high-tech products, and does not retain its value at expiration. It is shown that in order to make economically sound decisions, it is advisable to analyze a leasing agreement as an investment project. It is argued that the most effective method for assessing the efficiency of a leasing agreement is an approach based on assessing the efficiency of leasing compared with an alternative tool for raising funds for the acquisition of property, for example, with a loan. It is shown that the efficiency of a leasing agreement can be determined by comparing the total amount that will be paid to the lessor with the price of the leased asset itself, which could be bought for cash or on credit. The necessity of taking into account tax and other benefits provided for leasing operations is noted. It is argued that the analysis of the efficiency of leasing operations should be carried out taking into account both NPV and IRR by using an integral indicator of the efficiency of investing funds in the acquisition of fixed assets. The key differences between leasing and credit are analyzed. It was shown, that the main methods for assessing the effectiveness of a leasing transaction, which are compared with the acquisition of property through a bank loan, include: comparison of the internal rate of return of a leasing and credit transaction, comparison of discounted cash flows for leasing and lending, comparison of the lease rate with bank interest, comparison of payback periods of both investments, comparison of profitability of leasing and credit agreements.https://www.business-inform.net/export_pdf/business-inform-2022-9_0-pages-108_113.pdfleasingefficiency assessmentleasing efficiencyfixed assetscredit |
| spellingShingle | Blahun Ivan S. Nastoshyn Stepan Ye. Assessing the Efficiency of Use of Leasing as a Means of Fixed Assets Renovation at the Enterprise Bìznes Inform leasing efficiency assessment leasing efficiency fixed assets credit |
| title | Assessing the Efficiency of Use of Leasing as a Means of Fixed Assets Renovation at the Enterprise |
| title_full | Assessing the Efficiency of Use of Leasing as a Means of Fixed Assets Renovation at the Enterprise |
| title_fullStr | Assessing the Efficiency of Use of Leasing as a Means of Fixed Assets Renovation at the Enterprise |
| title_full_unstemmed | Assessing the Efficiency of Use of Leasing as a Means of Fixed Assets Renovation at the Enterprise |
| title_short | Assessing the Efficiency of Use of Leasing as a Means of Fixed Assets Renovation at the Enterprise |
| title_sort | assessing the efficiency of use of leasing as a means of fixed assets renovation at the enterprise |
| topic | leasing efficiency assessment leasing efficiency fixed assets credit |
| url | https://www.business-inform.net/export_pdf/business-inform-2022-9_0-pages-108_113.pdf |
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