I explain what ROI is, how to calculate it, and why it's important. This is an important follow-up to our video, What is Value? ...or Project Value? ruclips.net/video/jnPIhLQbua4/видео.html
Oh yes, and thank you for watching. Please support the channel and all the free content I provide. - Like, comment, and subscribe to the channel. - Why not join my community, free! Sign-up at onlinepmcourses.com/assets440251/the-onlinepmcourses-newsletter/ - And to show maximum appreciation, use the $ Thanks button, under the video, to make a small donation with a highlighted comment.
In ROI calculation, if deprecation is a factor in a given scenario, is the depreciation cost factored in the denominator when calculation ROI? or is depreciation only deducted in the numerator? i.e. (revenue - cost - depreciation) / (total cost) = ROI OR would the calculation be: (revenue - cost - depreciation) / (total cost + deprecation) = ROI
You know what? I'm not sure. However, my instinct says that depreciation is a cost, so it should appear wherever cost does. But, I'm not an accountant, and I have never encountered this question. What I do wonder, however, is whether ROI is the right tool in the e context of long-term investment decisions and whether Discounted Cash Flow and PV calculation would be better. But again, I have not had to account for depreciation of the value of a specific asset in doing a DCF calculation (When I did large-scale DCF calculations, we assumed the assets would retain their value - they were property/real estate - by investing in maintenance. We inflated the cost of maintenance and also accounted for the inflation of property values). I am sorry I cannot offer you a definitive answer.
EPS? Do you mean Earnings per Share? I am talking about investments in projects and initiatives, not in stocks and shares. I don't know enough about markets and those kinds of investments. I would have thought earnings per share is a measure of your return on investing in shares, but I don't know what the relationship is between share prices and dividends, and the calculation of EPS. I'm a Project Manager, not a stock investor.
I explain what ROI is, how to calculate it, and why it's important.
This is an important follow-up to our video, What is Value? ...or Project Value? ruclips.net/video/jnPIhLQbua4/видео.html
Oh yes, and thank you for watching.
Please support the channel and all the free content I provide.
- Like, comment, and subscribe to the channel.
- Why not join my community, free! Sign-up at onlinepmcourses.com/assets440251/the-onlinepmcourses-newsletter/
- And to show maximum appreciation, use the $ Thanks button, under the video, to make a small donation with a highlighted comment.
Excellent video Mike! Nicely explained 👍
Thanks 👍
In ROI calculation, if deprecation is a factor in a given scenario, is the depreciation cost factored in the denominator when calculation ROI? or is depreciation only deducted in the numerator? i.e. (revenue - cost - depreciation) / (total cost) = ROI OR would the calculation be: (revenue - cost - depreciation) / (total cost + deprecation) = ROI
You know what? I'm not sure. However, my instinct says that depreciation is a cost, so it should appear wherever cost does. But, I'm not an accountant, and I have never encountered this question.
What I do wonder, however, is whether ROI is the right tool in the e context of long-term investment decisions and whether Discounted Cash Flow and PV calculation would be better. But again, I have not had to account for depreciation of the value of a specific asset in doing a DCF calculation (When I did large-scale DCF calculations, we assumed the assets would retain their value - they were property/real estate - by investing in maintenance. We inflated the cost of maintenance and also accounted for the inflation of property values).
I am sorry I cannot offer you a definitive answer.
Hehe stonks
Thank you (I think)
Is there a way you can calculate the eps if the ROI is given??
EPS? Do you mean Earnings per Share?
I am talking about investments in projects and initiatives, not in stocks and shares.
I don't know enough about markets and those kinds of investments. I would have thought earnings per share is a measure of your return on investing in shares, but I don't know what the relationship is between share prices and dividends, and the calculation of EPS. I'm a Project Manager, not a stock investor.
@@Onlinepmcourses it's ok. Thanks