This course examines how companies apply capital budgeting analyses to decide whether or not to buy capital assets. We show you the methods actively used in the corporate world. These techniques can also be useful in not-for-profit and public sector organizations, since well-informed and educated financial decisions are required in all organizations. The impact of debt versus equity financing will also be discussed. Sample calculations for various analyses will be demonstrated, including average accounting rate of return, net present value, payback periods and profitability index. This course was designed for those who want to gain a basic working knowledge of capital budgeting techniques. We also show you how success in capital budgeting directly increases your entity’s value.

Learning Objectives

  1. Explain the importance of capital budgeting decisions to business success and value.
  2. Calculate ratios on liquidity, profitability, capital structure, asset management, cash cycle and performance. 
  3. Demonstrate the basic calculations used in the main capital budgeting techniques.
  4. Explain the impact of debt versus equity financing.


Topics Covered

  • Average accounting rate of return
  • Payback period and discounted payback period
  • Net present value
  • Internal rate of return
  • Profitability index
  • Debt vs equity financing (financial leverage)
  • Using reliable calculations to make better business decisions

Instructor

Arun K. Mathur, FCPA, FCA, LPA

Founder and Lead Instructor, UltimQuest Knowledge Inc.

Arun is Partner at Gerald Duthie & Co. LLP, where he provides professional services to a diverse group of clients. Arun is also Owner and Lead Instructor at UltimQuest Knowledge Inc. He has been delivering corporate training on improving governance, ethics, internal control, performance measurement and related topics. He provides live and online training through CPA bodies across Canada and Bermuda. Arun served for several years on the Board for HealthForce Ontario Marketing and Recruitment Agency, and was also Chair of the Finance and Audit Committee there and for the Trillium Gift of Life Network. He has served on the CMA Ontario's Review Committee prior to the merger.