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Home Capital Budgeting & Investment Analysis

PROGRAM DETAILS

  • Ref:
  • FI128
  • Course Title:
  • Capital Budgeting & Investment Analysis
  • Fees:
  • $4,750
  • Venue:
  • Dubai, UAE
  • Date:
  • 2022-01-30

PROGRAM DETAILS

Introduction

This course examines the decisions that every organization must consider, the most effective way to spend their capital to continue operations, innovate, and grow. Capital budgeting is a systematic process used to determine how capital – a limited resource – is allocated to projects that maximize the value of the organization. When it comes to deciding which new projects to invest in, organizations rely on quantitative tools such as net present value (NPV), internal rate of return (IRR), profitability index (PI), and discounted payback period (DPBP) measures to assess which projects to undertake through the capital budgeting process. No organization can claim to have an infinite amount of capital for funding projects. Capital rationing is a fact of organizational life, requiring decision makers to make difficult choices between promising investments. When deciding which projects to accept, an organization must not only perform a quantitative assessment to choose the most profitable projects, but also assess a variety of qualitative factors to analyze the impact and feasibility of each project.

 

Learning Objectives

 

By attending this program, you will learn

  • The value of following the capital budgeting process,
  • Identifying the three stages in that process: project identification and screening, quantitative assessment, and capital allocation and rationing.
  • Exploring how to identify opportunities for capital investment, and subject these initial ideas to preliminary screening based on their feasibility, alignment with organizational strategy, and dependence on other projects.
  • Explains the time value of money concept, and shows how to determine net present value and internal rate of return for projects.
  • Explore the strengths and limitations of each of these methods for making decisions, and demonstrates how to use their decision rules to determine which capital investment projects will add the most value to your organization.
    Discusses the benefits of project monitoring and post-implementation auditing.

 

Target Audience

 

This course would be beneficial to finance and non-finance professionals, functional managers, executives, controllers, accountants, budget analysts, budget owners and any individual serving in key roles involved directly or indirectly with the capital budgetary planning and process in an organization.

 

Training Methodology

 

This practical and results-oriented program is based on adult learning concept. It incorporates short inspiring lectures with structured lessons from the learning manual; captivating PowerPoint slides with videos to enhance learning; ongoing discussions with action planning; ample time for Q&A; training activities to reinforce key concepts within a fun learning environment.

 

Program Content

 

Day 1: Budgeting and Planning

 

  • What is budget?
  • Methods and Types of budgets and budgeting
  • Budgeting Cycle
  • The objectives of budgeting
  • Nature and purpose of budgets for planning and control
  • Understanding accounting & Financial accounting
  • Principles of budgeting and cost
  • Approaches to budgeting
  • Budgets and the key financial statements
  • Linking budget to strategic objectives

 

Day 2: Capital Budgeting Process

 

  • Overview of capital budgeting
  • The Capital budgeting process
  • The stages of Capital Budgeting Analysis
  • Capital Budgeting Decision making
  • Classifying Projects
  • Basic principles of capital budgeting
  • Capital Budgeting is vital in making decisions.
  • The relationship between organizational strategy and capital investment opportunities
  • Appropriate sources and suggestions for capital budgeting opportunities
  • Complexities in Capital budgeting
  • Post – Investment Audits

 

Day 3: Capital Allocation

 

  • Describe capital allocation
  • The cost of Capital
  • Capital Expenditures
  • Project Budgeting
  • Project Evaluation and Selection
  • Potential Difficulties
  • Capital Rationing
  • Project Monitoring
  • Post-Completion Audit
  • Case Study

 

Day 4: Investments Analysis

  • Definition of investments
  • Types of Investments:
  • Debt Investments
  • Equity Investments
  • Business risk and cost of capital
  • Classifying investment projects
  • Capital investment Process
  • Cash flow concepts
  • Different Types of Cash Flow
  • Cash flow projections
  • More on cash flow projections
  • Analyzing investment and operating cash flows
  • Return on Investment (ROI)
  • Project Analysis and evaluation
  • Capital rationing

 

Day 5: Advanced capital budgeting evaluation techniques

 

  • The time value of money concept
  • The required rate of return
  • Net Present Value (NPV)
  • Internal Rate of Return (IRR)
  • Multiple internal rates of return
  • Modified Internal Rate of Return (MIRR)
  • Profitability Index (PI)
  • Payback period and discounted payback period
  • Comparing and evaluating techniques
  • Case Study