Physical investment generally includes investment in tangible assets, such as land, machinery, factory buildings, etc. , sometimes called direct investment;
Financial investment includes investment in various financial contracts, such as stocks, fixed income securities, financial trust and fund products, financial derivatives, etc. Sometimes called indirect investment.
Extended data:
Financial investment is also called "securities investment".
An investment activity in which an economic entity purchases financial assets such as stocks and bonds with funds in order to obtain expected returns or rights and interests.
Financial investment is not only a field, but also a way, which is the product of developed market economy and credit.
The earliest securities investment can be traced back to Europe in the15th century.
Since 1980s, securities investment has become the most basic investment mode in western developed market economy countries.
When an economic entity invests in the preservation and expansion of physical assets by issuing stocks, bonds and other securities, securities buyers become financial investors.
Financial assets are holders' rights and interests and creditor's rights certificates to sellers. Financial investors get returns by holding securities and sharing the profits and equity of securities sales institutions.
. Because financial assets make it possible to separate the ownership and management of property, it helps to concentrate idle funds in society and turn them into investment funds for substantive production. It is an important channel for mobilizing and redistributing funds, so it is the basic form of investment in developed countries.
purpose
Enterprise financial investment can not only be regarded as enterprise financial management behavior, but also an important part of enterprise management and development strategy. Its purpose is manifold:
(1) Seek opportunities for enterprises to gain profits from idle funds through financial investment.
(2) Through financial investment, the business risks of enterprises are dispersed.
(3) through financial investment, improve the liquidity of assets and enhance the solvency of enterprises.
(4) For enterprises, financial investment can be used as both hedging and speculation.
(5) Financial investment is also an important means to achieve enterprise expansion. One of the signs of the success of an enterprise or company is to see whether it has developed in the course of operation, and the specific embodiment of development includes outward expansion, that is, merger and acquisition of other enterprises and reorganization of the company.
Merger usually refers to the economic behavior that an enterprise purchases the property rights of other enterprises to achieve complete control over its management rights (also called absorption merger), or two or more enterprises merge to form a new enterprise (also called establishment merger).
Acquisition means that an enterprise purchases part of the assets or part or all of the equity of another enterprise in order to control the latter's operation.
The main difference between M&A and M&A is that the M&A enterprise will lose its legal personality, while the M&A party will usually not change its legal status. However, they also have similarities, aiming at gaining control over other enterprises and realizing the expansion and development of enterprises.
Merger and acquisition, referred to as merger and acquisition, can be divided into four ways: purchase, borrowing, absorbing shares and holding. In China, M&A is mainly about absorbing shares and holding shares.
Enterprises can control other enterprises to a greater extent and implement their own enterprise development strategies through financial operations aimed at obtaining control rights.