Capital Investment Analysis (PowerPoint PPTX)

Capital Investment Analysis

Also called Capital Budgeting – a complex topic simplified in an easy to understand presentation which is completely self-explanatory. Explains the framework for financial analysis with examples and provides practical insights. Can be used for reference, training & self paced learning. The presentation includes examples worked in an Excel sheet.

Covers:
•  The nature & characteristics of long term investments made by corporations
•  The problem associated with measuring the rate of return with long term investments
•  The approach to solving this problem
•  The key methods used in calculating the rate of return and evaluating alternatives
•  The practical aspects of the various inputs required to calculate the return on investment
•  The basics of the risks associated with long term investments & how to factor ?in such risks
•  The strategic considerations involved in long term investment decisions
•  The processes involved in long term investment decisions & its implementation

This presentation delves into the intricacies of capital budgeting, emphasizing the importance of evaluating long-term investments. It outlines the necessity for businesses to grow through strategic decisions in new products, markets, and technologies. The document provides a detailed explanation of the investment of funds in R&D, capacity increases, and acquisitions, highlighting the need for thorough evaluation due to significant initial outlays and future cash flow returns.

The presentation also addresses the importance of capital expenditure (Capex) in maintaining competitiveness and driving future profits. It discusses various financial approaches, including the popular 'Pay-back' method, and the challenges in determining the rate of return. The document includes practical examples and calculations, such as Net Present Value (NPV) and Internal Rate of Return (IRR), to illustrate the financial analysis framework. This resource is essential for executives looking to make informed investment decisions and manage associated risks effectively.