Return on Investment (ROI) Analysis
Return on Investment Analysis gives the student the tools, templates and concepts to determine if a major capital investment is beneficial to their organization. This course teaches the basics of ROI analysis such as estimating future revenues, on-going expenses, and the initial investment. But it also explores more advanced aspects of capital investment justification such as risk, changes net working capital and the calculation of manufacturing overhead. It then assembles these projected expenses and revenues into a financial model using the Net Present Value method of valuation – the method experts agree is the best for evaluating capital investments.
If you are eager to add business finance and financial modeling to your skill set, then this is the class for you!
If you are looking to merge your project engineering skills with the real world of business finance, or move from an engineering role to a managerial one, then this course is for you!
If you are looking for a clear and straight-forward explanation of the sometimes confusing world of business finance, then sign up today!
“It is comprehensive and straightforward instruction with practical examples.” – Ben P.
Capital Investment Justification
Understanding the financial aspect of an initial project investment including the purchased equipment, installation, training, etc.
Starting the ROI model, and building into that model the initial investments.
The value of the capital investment at the end of its useful life.
Building that value into the ROI model.
Projecting sales revenues for a multi-year project.
Building Sales Revenues into the model.
The direct labor and material costs required to manufacture the product.
Accurately modeling direct costs.
The indirect costs required to manufacture a product. What they are and how to estimate them for a multi-year project.
The planned, gradual reduction in the recorded value of an asset over its useful life by charging it as an operating expense.
A comparison of consumption versus demand charges.
Accurately building these overhead expenses into the ROI model.
Operational profit: How to calculate it and why it's important.
The bottom line cash flows in a multi-year project
The financial assets required to support the project
The financial assets required to support the project year over year
The projected annual cash flows from the project.
The value of cash for a given organization. WACC versus Hurdle Rate.
The present values of future cash flows.
Summarizing the value of a proposed project in today's money.
Understanding your project's NPV.
COURSE UPDATE: Use NPV to calculate a more layer of analysis to find a project's Profitability Index.
Profitability Index explanation and application.