Necessity of improvement of long-term financial investment evaluation mechanism in public sector companies in Latvia

Abstract

Key findings of the research are as follows: long-term financial investments done by public sector is a significant part of its total assets. Starting with the fact that no single definition and terminology exists for concept, it comes to other findings – besides being valuable assets with a potential long-term financial investments are difficult to be assessed; different evaluation methods are applicable both having pros and cons what makes information for its user incomparable and useless for analysis and judgment of financial health of a company, local municipality and state.

The aim of the paper is to investigate, summarize and systematize concept and evaluation methods of long-term financial investment, identify potential problematic aspects and develop recommendations for its improvement.

Research is limited to long-term financial investments done by public sector, in detail is examined case of Latvia with slight touch of international regulation.

Since long-term financial investments are subject for private as well as for public sector, research provides complex look to the problem and is relevant for shareholders in private companies, local municipalities and state owned companies.