EXCELL & ROI

Summary

In 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

• 📊 The lesson is about using spreadsheets or Excel to estimate Return on Investment (ROI).
• 💡 ROI is defined as the net profit divided by the capital invested.
• 📈 The script provides an example of calculating ROI for different stocks (A, B, C, etc.) representing different companies.
• 🔢 Each company's stock is associated with a net profit and the capital invested in it.
• 📝 The script demonstrates the process of copying data into a spreadsheet and using it for calculations.
• 🧮 The formula for calculating ROI in Excel is shown, which is the cell with net profit divided by the cell with capital investment.
• 📋 Excel's drag and drop feature is used to apply the ROI calculation to all companies quickly.
• 📊 A graph is created in Excel to visually represent the ROI of each stock for easy comparison.
• 📈 The highest ROI is identified through the graph, which helps in making a quick decision.
• 🔑 The importance of visual representation is highlighted as it makes it easier to spot the highest ROI at a glance.
• 🔚 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

00:00

📊 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.

05:01

🔢 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.

10:03

📈 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.

Keywords

💡ROI

ROI stands for 'Return on Investment,' which is a financial metric used to evaluate the efficiency of an investment or compare the efficiency of different investments. In the video, ROI is the central concept, as the instructor explains how to calculate it using Excel. The formula used in the script is 'net profit divided by capital invested,' which is a straightforward way to determine the profitability of an investment.

💡Excel

Excel is a widely used spreadsheet program developed by Microsoft. It is utilized in the script to demonstrate how to calculate ROI for various investment alternatives. The video shows the process of inputting data, performing calculations, and using Excel's features to automate the calculation of ROI across different stocks.

💡Net Profit

Net Profit refers to the amount of earnings a company has after all expenses have been deducted from its total revenue. In the context of the video, net profit is used as a component in the ROI calculation for different stocks, representing the earnings generated by the capital invested in each company.

💡Capital Invested

Capital Invested is the money put into a business or investment with the expectation of generating a profit. The script uses this term to describe the initial amount of money that has been used to purchase stocks in various companies, which is then used in the ROI calculation.

💡Spreadsheets

Spreadsheets are digital documents used for organizing, analyzing, and storing data in a grid of rows and columns. In the video, spreadsheets are synonymous with Excel files, which are used to perform financial calculations and visualize data through graphs.

💡Drag and Drop

Drag and Drop is a user interface action that allows users to move or select data by clicking, holding, dragging, and then releasing the mouse button. In the script, this term is used to describe how the instructor uses Excel to quickly apply the ROI formula to multiple cells by dragging the fill handle.

💡Graph

A Graph is a visual representation of data, often used to analyze and compare different sets of numbers. The video script mentions creating a graph to represent the ROI of different stocks, which helps in visually identifying which investment has the highest return.

💡Investment Alternatives

Investment Alternatives refer to the different options available for investing money with the potential to earn a return. In the script, the instructor discusses various stocks (A, B, C, etc.) as different investment alternatives, each with its own ROI.

💡Stocks

Stocks, also known as shares, represent ownership interests in a company. In the context of the video, stocks are the specific investments being evaluated for their ROI. The script provides examples of different company stocks and their respective net profits and capital investments.

💡Formula

A Formula in Excel is an equation or computation that performs calculations on the data in cells. The script explains how to use a formula to calculate ROI by dividing net profit by capital invested, which is then applied to each stock to determine its return on investment.

💡Highlight

To Highlight in Excel means to select or emphasize certain cells or data. In the script, the instructor highlights specific columns to create a graph, which is a way of visually emphasizing the ROI data for comparison.

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