4.25 out of 5
4.25
17 reviews on Udemy

Return on Investment (ROI) Analysis

Revenues, depreciation, cost of capital ... How to know if a major investment is right for your organization
Instructor:
Ray Harkins
107 students enrolled
English [Auto-generated]
Capital investment justification (equipment, new processes, building, etc.)
Accounting principles such as balance sheets, COGS, accounts payable, accounts receivable, and gross margin.
Net Present Value (NPV), Cost of Capital and the Time value of money
Free Excel templates to build your own capital justification model
Net Working Capital and the typical business cycle.

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

1
Introduction
2
Initial Investments

Understanding the financial aspect of an initial project investment including the purchased equipment, installation, training, etc.

3
Initial Investments in the Model

Starting the ROI model, and building into that model the initial investments.

4
Salvage Value Overview

The value of the capital investment at the end of its useful life.

5
Salvage Value in the Model

Building that value into the ROI model.

6
Sales Revenue

Projecting sales revenues for a multi-year project.

7
Sales Revenue in the Model

Building Sales Revenues into the model.

8
Direct Costs

The direct labor and material costs required to manufacture the product.

9
Direct Costs in the Model

Accurately modeling direct costs.

10
Manufacturing Overhead

The indirect costs required to manufacture a product. What they are and how to estimate them for a multi-year project.

11
Depreciation

The planned, gradual reduction in the recorded value of an asset over its useful life by charging it as an operating expense.

12
Electrical Usage

A comparison of consumption versus demand charges.

13
Overhead in the Model

Accurately building these overhead expenses into the ROI model.

14
Gross Margin

Operational profit:  How to calculate it and why it's important.

15
Cash Flows

The bottom line cash flows in a multi-year project

16
Change in Net Working capital

The financial assets required to support the project

17
Net Working Capital Requirements

The financial assets required to support the project year over year

18
Summarizing Annual Cash Flows

The projected annual cash flows from the project.

19
Cost of Capital

The value of cash for a given organization.  WACC versus Hurdle Rate.

20
Discounting Future Cash Flows

The present values of future cash flows.

21
Project NPV

Summarizing the value of a proposed project in today's money.

22
Interpretation of Results

Understanding your project's NPV.

23
UPDATE: Introduction to Profitability Index

COURSE UPDATE: Use NPV to calculate a more layer of analysis to find a project's Profitability Index.

24
UPDATE: Profitability Index Explained

Profitability Index explanation and application.

25
Conclusion

Conclusion

You can view and review the lecture materials indefinitely, like an on-demand channel.
Definitely! If you have an internet connection, courses on Udemy are available on any device at any time. If you don't have an internet connection, some instructors also let their students download course lectures. That's up to the instructor though, so make sure you get on their good side!
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Includes

2 hours on-demand video
Full lifetime access
Access on mobile and TV
Certificate of Completion