Return on Investment (ROI) Analysis for Manufacturing
4.6 (66 ratings)
Course Ratings are calculated from individual students’ ratings and a variety of other signals, like age of rating and reliability, to ensure that they reflect course quality fairly and accurately.
307 students enrolled

Return on Investment (ROI) Analysis for Manufacturing

Revenues, depreciation, cost of capital, inventory ... How to know if a major investment is right for your organization
4.6 (66 ratings)
Course Ratings are calculated from individual students’ ratings and a variety of other signals, like age of rating and reliability, to ensure that they reflect course quality fairly and accurately.
307 students enrolled
Created by Ray Harkins
Last updated 7/2020
English
English [Auto]
Current price: $16.99 Original price: $24.99 Discount: 32% off
5 hours left at this price!
30-Day Money-Back Guarantee
This course includes
  • 2 hours on-demand video
  • 2 downloadable resources
  • Full lifetime access
  • Access on mobile and TV
  • Certificate of Completion
Training 5 or more people?

Get your team access to 4,000+ top Udemy courses anytime, anywhere.

Try Udemy for Business
What you'll learn
  • 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.
  • Financial modeling and analysis
Requirements
  • Fundamental knowledge of manufacturing
  • Basic Excel skills
  • Basic math skills
Description

Return on Investment (ROI) Analysis for Manufacturing teaches the tools, models and concepts manufacturing professionals need to determine if a significant investment like a new piece of equipment will be financially beneficial to their organization.

This course teaches the basics of ROI analysis such as estimating revenues, on-going expenses, and the initial investment. It also explores more advanced aspects of capital investment justification such as adjusting for risk, changes to net working capital, and estimating overhead. 

It then shows the student how to assemble these projected expenses and revenues into a financial model designed to return the Net Present Value (NPV) of the project. NPV is 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.

Who this course is for:
  • Anyone that wants to improve their business finance knowledge skills
  • Industrial and Manufacturing engineers and managers
  • Project managers
  • Anyone interested in financial modelling
Course content
Expand 26 lectures 02:13:22
+ Capital Investment Justification
26 lectures 02:13:22

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

Preview 05:53

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

Initial Investments in the Model
03:33
Initial Investment
1 question

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

Salvage Value Overview
04:52

Building that value into the ROI model.

Salvage Value in the Model
01:40
Salvage Value
1 question

Projecting sales revenues for a multi-year project.

Sales Revenue
05:13

Building Sales Revenues into the model.

Sales Revenue in the Model
03:18
Sales Revenue
1 question

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

Direct Costs
04:59

Accurately modeling direct costs.

Direct Costs in the Model
04:22
Direct Costs
1 question

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

Manufacturing Overhead
04:01

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

Preview 04:52
Depreciation
2 questions

A comparison of consumption versus demand charges.

Preview 03:59

Accurately building these overhead expenses into the ROI model.

Overhead in the Model
04:12

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

Gross Margin
03:32
Gross Margin
1 question

The bottom line cash flows in a multi-year project

Cash Flows
03:05

The financial assets required to support the project

Change in Net Working capital
11:03

The financial assets required to support the project year over year

Net Working Capital Requirements
06:05
Working Capital
1 question

The projected annual cash flows from the project.

Summarizing Annual Cash Flows
02:40

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

Cost of Capital
12:43
Cost of Capital
1 question

The present values of future cash flows.

Discounting Future Cash Flows
05:43

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

Project NPV
05:56

Understanding your project's NPV.

Interpretation of Results
06:51

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

UPDATE: Introduction to Profitability Index
02:01

Profitability Index explanation and application.

UPDATE: Profitability Index Explained
08:52

An easy-to-use tool for comparing investments with different time horizons.

Compounded Annual Growth Rate (CAGR)
05:11

Conclusion

Conclusion
01:59