Course info

To deliver maximum value to the organization as a finance professional, it is imperative to develop both our technical skills as well as our role as a business partner. In the field of capital budgeting, implementing a standardized and objective process to evaluate investment opportunities is key. As finance professionals, we must be the voice of reason and objectivity, as well as the guardian of the company’s assets, principles that certainly apply to capital budgeting.

This course provides a very broad overview of capital budgeting: its techniques, impacts, and practical considerations. To start off, we will review capital budgeting techniques that are very widely used, while building awareness of their strengths and limitations. In addition, we introduce lesser known techniques that could add significant insight in capital project evaluations in your organization.

As finance business partners, we provide context to the financial decisions that are being made. We help consider alternatives, and create breakthroughs when project economics need to be finetuned. The course section on capital budgeting scenarios, real world rules of thumb, and project retrospectives, will help you maximize the impact of the capital budgeting process in your organization. In addition, by understanding the fundamentals of discount rates (in the form of WACC or a hurdle rate) we make capital budgeting conversations more objective.

Capital budgeting decisions affect each of the major financial statements, therefore we make the connection in this course to depreciation in the income statement, P&E-related deferred tax liabilities on the balance sheet, and free cash flow in the cash flow statement.

To wrap up the “Capital budgeting – a practical approach” course, we take on the very practical task of making the capital budgeting calculations in Excel, using the various techniques.

The course includes several real life “big name company” examples to make topics interesting and understandable, and ensure that during your next capital budgeting meeting you can relate these concepts to what actually goes on in the outside business world.

Course Key Concepts: Capital budgeting, Capital budgeting techniques, Capital budgeting best practice, Capital budgeting in Excel, Net present value, Internal rate of return, Payback method, Payback period, Discounted payback method, Profitability index, Crossover rate, WACC, Weighted average cost of capital.