EXCELL & ROI
Summary
TLDRIn this educational video, the instructor introduces students to the concept of Return on Investment (ROI) using Excel. They demonstrate how to calculate ROI by dividing net profit by the capital invested for various stocks, using a spreadsheet as an example. The video also guides viewers on how to create a graph to visually represent ROI for different investment alternatives, emphasizing the importance of understanding ROI for making informed investment decisions. The instructor concludes by highlighting the stock with the highest ROI as the preferred choice.
Takeaways
- ๐ The lesson is about using spreadsheets or Excel to estimate Return on Investment (ROI).
- ๐ก ROI is defined as the net profit divided by the capital invested.
- ๐ The script provides an example of calculating ROI for different stocks (A, B, C, etc.) representing different companies.
- ๐ข Each company's stock is associated with a net profit and the capital invested in it.
- ๐ The script demonstrates the process of copying data into a spreadsheet and using it for calculations.
- ๐งฎ The formula for calculating ROI in Excel is shown, which is the cell with net profit divided by the cell with capital investment.
- ๐ Excel's drag and drop feature is used to apply the ROI calculation to all companies quickly.
- ๐ A graph is created in Excel to visually represent the ROI of each stock for easy comparison.
- ๐ The highest ROI is identified through the graph, which helps in making a quick decision.
- ๐ The importance of visual representation is highlighted as it makes it easier to spot the highest ROI at a glance.
- ๐ The lesson concludes with a reminder of the ROI formula and the method to repeat the last process using Excel's auto drag and drop feature.
Q & A
What is the main topic of the video script?
-The main topic of the video script is how to use spreadsheets or Excel to estimate the Return on Investment (ROI).
What does ROI stand for?
-ROI stands for Return on Investment, which is a measure used to evaluate the efficiency of an investment.
How is ROI calculated according to the script?
-According to the script, ROI is calculated by dividing the net profit by the capital invested.
What is an example of how the script describes an investment in a company?
-The script provides an example where Company A (Alpha Company) invested $10,000 and made a net profit of $100.
How does the script suggest automating the ROI calculation for multiple companies in Excel?
-The script suggests using a formula in Excel where you divide the net profit cell by the capital investment cell and then use the fill handle to copy the formula down for other companies.
What is the purpose of creating a graph in Excel as described in the script?
-The purpose of creating a graph in Excel is to visually represent the ROI for different investment alternatives, making it easier to compare and identify the best options at a glance.
How does the script demonstrate the use of the 'drag and drop' feature in Excel?
-The script demonstrates the 'drag and drop' feature by showing how to extend the ROI calculation formula across multiple cells to apply it to different companies' data.
What is the highest ROI found in the script's example?
-In the script's example, the highest ROI found is 0.013 or 1.3%, which corresponds to Company D.
Why is it beneficial to represent numerical data as a graph according to the script?
-Representing numerical data as a graph is beneficial because it provides a quick and clear visual comparison of the ROI for different investment alternatives, making decision-making more efficient.
What is the final recommendation made by the script regarding the investment choice?
-The script recommends choosing the stock of Company D because it represents the highest rate of return on investment among the given options.
How does the script emphasize the importance of understanding Excel functions for ROI calculations?
-The script emphasizes the importance by demonstrating step-by-step how to use Excel formulas and features to calculate and compare ROI, highlighting the efficiency and ease of use in making informed investment decisions.
Outlines
๐ Introduction to ROI Calculation with Excel
The video script begins with a warm welcome to students and introduces the topic of using spreadsheets or Excel for estimating the Return on Investment (ROI). The instructor explains the concept of ROI as the net profit divided by the capital invested, using various stocks as examples. Each stock represents a different company with varying net profits and capital investments. The goal is to demonstrate how to calculate ROI using Excel, starting with a simple formula and then showing how to replicate this calculation across multiple investment alternatives.
๐ข Excel Calculation of ROI for Multiple Investments
In this paragraph, the script details the step-by-step process of calculating ROI in Excel. The instructor shows how to input data for different stocks, representing various companies, and their respective net profits and capital investments. The ROI is calculated by dividing the net profit by the capital invested, and this formula is applied to each stock. The script also explains how to use Excel's drag and drop feature to apply the formula across all entries, resulting in a list of ROI percentages for each investment alternative.
๐ Graphical Representation of ROI for Investment Decisions
The final paragraph of the script focuses on visualizing the calculated ROI data in Excel to make investment decisions. The instructor guides through the process of creating a graph to represent the ROI for each investment alternative, emphasizing the importance of columns for quick comparison. The graph helps in identifying the stock with the highest ROI at a glance. The script concludes with a reminder of the ROI formula and the importance of using Excel for such calculations, and ends with a sign-off thanking the viewers for watching.
Mindmap
Keywords
๐กROI
๐กExcel
๐กNet Profit
๐กCapital Invested
๐กSpreadsheets
๐กDrag and Drop
๐กGraph
๐กInvestment Alternatives
๐กStocks
๐กFormula
๐กHighlight
Highlights
Introduction to the topic of using spreadsheets or Excel for estimating ROI (Return on Investment).
Definition of ROI explained as net profit divided by capital invested.
Demonstration of using Excel to calculate ROI with a sample data set of different stocks.
Explanation of how to input data into Excel and use formulas to calculate ROI.
Use of Excel's 'Paste Special' feature to import data into a new spreadsheet.
Excel formula for calculating ROI is shown as dividing net profit by the capital invested.
Technique of dragging and dropping to apply the ROI formula to multiple data points.
Importance of understanding the ROI percentages and identifying the highest ROI investment.
Instruction on creating a graph in Excel to visually represent ROI for different investments.
Selection of the investment with the highest ROI based on the graph created in Excel.
Advantage of using a graph to quickly identify the investment with the highest ROI.
Transcripts
welcome back my dear students in another
topic a very important topic that is how
to use the spreadsheets or Excel in
estimating the ROI
so what is the ROI the ROI in the return
on investment let us share the screen
first and see what we gonna say talk
about the or oi let me say as example
if I have an example like this
investment alternate stocks a b c d e f
g h g h i so each one of them represents
a kind of stock and this is the net
profit for each stock for the stock a of
the company a the net profits is one
hundred dollar and the capital invested
in this company company a let's say a
this is Alpha Company GTV company
whatever the name is
invested ten thousand dollars and the
these stock made the profits of one
hundred dollars
same likewise B and C and D each company
of those the company B is stock generate
profits of two hundred dollars while the
capital invested was fifteen thousand
and so on for the rest of the companies
like c and d and e and f and g and H on
I
so what we want here we really want to
calculate the uh uh return on investment
we need to know what is the ROI but this
time we need to know it during the Excel
program
before that we had a close on a video
about the oil
and how to calculate the ROI calculating
the ROI or very simple it is net profit
divided by Capital invested so net
profit by Capital invested it's very
easy so what we will do here is adjust
the one formula when we work on the
spreadsheet
now I will go and I will open a
spreadsheet a new page of spreadsheet
here we go and I will take my work and
Export it there
how I will do that
just
I will press then I will do copy
I will take it as a copy then I will go
to my spreadsheet page here it is then I
will say past special
this is special then I will choose HTML
I will choose HTML here we go
that's what we got it now so we have
already our own work here
our own work here as example
for each cell
a
the name of a investment alternative
stocks here is B1
and the the the the
stock of the company B which is might
become but it's called beta or something
is located on the C where it's the
orange color C the the active cell C1
this the the alternate
stock which is called C maybe the
company is called Rogers Bell whatever
goes on the cell the one and so on okay
all we're gonna do now is how to
calculate this the r o i however
calculate the r o i based on the
information which I have here very
simple thing very simple thing that I
will do is because I have in the
question I have a question that's
telling me use Excel to calculate Roi
and that's what I'm going to do now then
draw a graph that represents the ROI and
the alternate stock
so let's go for the first uh request
which is use Excel to calculate our oi
okay okay here we go here we go you told
me that what we need is just
two
divide the net profit by Capital
invested net profit by capital
investment so here I will go I will say
equal and the cell
A2
this cell is eight of the cell is
sorry the cell is sorry it's b b
and with what b b two look at this B and
two
divided by
better
which is B3
then I will give enter
but give me
0.01 which means one percent
let's go okay now I have an option that
will help me to do the same calculus for
the rest of the amounts here okay so
let's go like this
drag and drop
and here we have
here we are
here we are
so the ROI how did I calculate it back
let me show you
again I stop wearing the pin a point
here on the bottom right of the cell
okay then I will drag and drop so this
would repeat the same operation which we
did here which is dividing the net
profit by the capital invested
so here we have now the ROI we have now
the ROI
uh we have 0 1
0 1 3 0 1 4
0.036 zero zero zero nine zero zero zero
four zero zero zero three zero zero zero
five and zero two four of course one of
those two only is the higher
and I believe this one
point zero one three is higher than .01
because this is 0 and this is 3.
okay the next the next step is to draw
like he asked me in the question here
draw a graph that represents the ROI and
the alternate stroke it's very easy it's
very easy what we will do now here let
me
I need only column this First Column and
I need the calculated column which I
calculated just now and I want to take
actually the numbers from it
uh and put it there
I need only those two columns so I can
highlight here
I can highlight all what I want
here
that way
and also I can highlight in the same
time the last column
here we go
then insert
we can put it in a figure of lions but
in that case I prefer the columns
because the columns will give a good uh
figure and show up which one is the
better which one they are or it just was
a glance of an eye so I prepare this one
and I prepare that we take it like uh
this would be fine
let us see here we go
here we go and I have to take this away
so we can compare
the draw with the uh
actual results here and you can see from
here that the ROI for d d which is three
percent it's three
0.036 Which is higher the highest or or
here so basically I will choose the the
stock of the company that is named B
because it represents for me the highest
rate of return or rate of investment or
return on investment it is point zero
three here is point zero one point zero
one three
0.03 is considered the highest of them
because it's higher than 0.01 and 0.013
and more than 0.014 as well because if
you take two numbers after the decimal
point zero three is greater than 0 1 and
greater than the rest of those results
like this you can see that the figures
the figures and the shapes
sometimes it will give me a very fast
decision with a glance of an eye I would
remember because if I compare the
numbers here it's not very clear but
when we switch the numbers into a graph
it will be a clear for us here we go
again the return on investment return on
investment equals net profit divided by
Capital invested and we draw the graph
that represents this relationship you
don't need to do all this you just
highlight what you want to make a graph
for so I made the graph the Highlight
for the alternate Investments the
companies A B C D E F G H and the rate
of interest or their return on
investment which I deducted or preceded
by using the actor don't forget how to
repeat the last transaction or the last
process by taking the arrow taken the
auto drag and drop from the bottom right
of the active cell of which was the last
transaction thank you again we choose D
because it is the highest rate of return
or return on investment the highest one
of them D thank you so much
stay safe take care of yourself have a
good night bye bye
thank you
foreign
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