Analyzing Whether to Add New Locations – Capital Budgeting
A new location is a major commitment of time and money with the potential to expand a company’s business and increase profits. New locations also come with risks. Sales may be lower than expected while costs are higher. The new location may pull more resources from existing operations and strategy than anticipated. Could we have better anticipated this?

In this course, I’ll:
  • Explore some of the key financial considerations when opening a new location.
  • Describe how to project common revenue and expense items for a new location.
  • Explain how to build a net contribution and cash flow forecast.
  • Illustrate analysis methods like breakeven analysis and scenario analysis
  • Demonstrate scenario analysis and sensitivity analysis with Excel’s Goal Seek, Scenario Manager, and Data Table functions
  • Define common metrics like NPV, IRR, and Time to Breakeven. I’ll show multiple ways to analyze this in Excel. For Excel gurus, you can do this yourself. For others, this gives you an idea of what an accountant, analyst, or consultant can do for you.
Reveal common decision mistakes people make when analyzing new locations and how to avoid these mistakes.

This course is focused on the financial analysis of the location and how a new location fits financially into a company’s larger strategy. Some things I don’t cover or don’t cover in detail in this course:
  • Merger and Acquisition (M&A) Analysis
  • Analyzing where to locate the store or new location
  • Detailed financial accounting entries and financial statement disclosure
  • Tax considerations and treatment. I will briefly mention some relevant tax items like cost segregation studies.


Course Publication Date: January 13, 2024

This course is available with NO ADDITIONAL FEE if you have an active self study membership or all access membership or can be purchased for $40.00!

Author:Rob Stephens
Course No:FIN-CAPBUD-90023
Recommended CPE:4.00
Delivery Method:QAS Self Study
Level of Knowledge:Basic
Prerequisites:None
Advanced Preparation:None
Recommended Field of Study:Finance
  
Learning Objectives
  • Identify key revenue and expense items for a new location analysis.
  • Recognize sources of information for new location projections.
  • Recall analysis metrics like Net Present Value (NPV), Internal Rate of Return (IRR), and Time to Breakeven.
  • Recognize Excel What-If functions like Goal Seek, Scenario Manager, and Data Tables.

CPE Depot Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org.

Sponsor Number: 109423

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