MEASURING RETURN ON INVESTMENT (ROI)

INTRODUCTION FOR MEASURING RETURN ON INVESTMENT (ROI)

The ROI analysis course teaches the tools, models and concepts business professionals need to determine if a significant investments (capital expenditure and operating expenditure) will be financially beneficial to their organization.

By acquiring this required skill of constructing ROI analysis, it will contribute effectively to the organization performance by improving business decision making skill. This programme will highlight methods on 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.

This course provides you with the conceptual foundations, framework and practical knowledge you will need to both conduct Return on Investment (ROI) analysis

Who should attend: Business & Commercial managers with financial responsibility or seeking a refresher in analysis, business finance analysts, commercial accountants, project managers, budget analysts, vice presidents of finance, controllers and treasurers.

COURSE OBJECTIVES

On completion of the programme, participants will be able to:-

1. 1. Understand the advantages of data driven analysis using costs ROI in an increasingly dynamic and fast changing world
   2. Contribute more effectively in corporate investment strategy by performing a range of different ROI calculations for different purposes.
   3. Understand the ROI Process Model framework for business investment.
   4. Understand and uncover the components of return and identification of measurement of profitability for ROI analysis
   5. Prepare ROI analysis with forecast financials for projects and business decision.

COURSE CONTENT

Introduction to ROI calculation for forecasting & business decisions

• What is ROI? Understand conceptual foundations of ROI analysis
• Methods and templates used for business case for investment appraisal
• Projecting and forecasting future revenue, benefits and various types of costs
• Understand different types of measures of profitability from equity analyst and internal management.
• Stakeholder analysis for ROI calculation

Return on Analysis (ROI) Framework

• Understand and design the Return on Investments Analysis (ROI) Framework
• Identify goals and objectives of any new product, initiatives or project proposals
• Understand the ideal metric for the measurement of ROI.
• How to know if a major investment is right for your organisation

Analysis on ROI

• Understand components of profit return and investments structure
• Identifying relevant costs and revenue streams -Direct vs. Indirect • External vs. Internal • Tangible costs versus intangible
• Calculate contribution margin and provide ROI analysis for new products developments
• Understand and calculate Net Present Value (NPV) for capital investments decisions.

Concept of Limiting Factor

• Understand the concept of limiting factor in resource allocation in project or new initiatives.

Skillset to Improve Decision Making

• Data literacy
• Data collection
• Understanding of the importance of collecting and analysing actual data

Case study Method: Application of ROI

• Prepare and calculate ROI analysis based on case study
• Group presentation on ROI measures and impacts on business decisions