Category: Free Video Tutorials

  • Preview Below: Net Present Value Premium Videos

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  • Accumulated Value Formula in 2 Easy Steps

    3 Minute Overview of Future Value, Present Value, and Net Present Value (Accumulated Value at Bottom)


  • Capital Structure in 15 minutes: Debt Policy & Return on Investment Ratio ROI / ROE

    Finance Capital Structure Theory & Return on Investment Ratio ROI / ROE in 15 Minutes

    Modigliani & Miller Proposition 1 Premium Video (Free Preview)

    Modigliani & Miller Proposition 2 Premium Video (Free Preview)

    Tax Shield and Debt Policy Premium Video (Free Preview)

    To Watch FULL Premium videos Click Here

  • Dividend Policy and Dividend Payout Ratio in 19 Minutes

    Part 1

    Part 2

    Stock Dividends and Stock Splits – Premium Video (Free Preview)

    Stock Repurchase Doesn’t Help Shareholders – Premium Video (Free Preview)

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  • Decision Tree Analysis in 7 Minutes

    Decision Tree Premium Video (Free Preview)

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  • Activity Based Costing in 6 Easy Steps, ABC Costing

    3-Minute Overview

    Part 1 (Details of Video’s Example are at Bottom of This Page)

    Part 2

    Activity Based Costing Exam Training – Premium Video (Free Preview)

    To Watch FULL Premium videos Click Here

    Detailed Problem in Video Example Above:

    ABC Mobile Phone Company makes mobile phones.  How much is the overhead cost of each phone of each Phone Model (both Model-A and Model-B)?
    Ex. Mobile Phone Company, 1 Year of Data
    *1 year is only an example.  It can be a different time period in other problems.  But let’s just use 1 year to keep it simple for this easy example.
    Phones Manufactured in 1 year:
    1. PDA-phones manufactured in 1 year: 3,000 phones
    2. Simple-phones manufactured in 1 year: 7,000 phones
    Total Phones Manufactured in 1 year (PDA Phones + Simple Phones):  10,000 phones
    Overhead Cost in 1 year:
    1.Machine Maintenance Costs: $400,000
    2. Quality Control Costs: $600,000
    Total Overhead of Firm (Machine Maintenance + Quality Control):  $1,000,000
    *To keep it simple, we have only 2 types of overhead in this example.  In other problems, there can be more types of overhead, such as rent, electricity, and more…

    Quantity of EACH Overhead Type:

    Number of Machine Hours Used:  10,000 hours

    * The number of “machine hours” is the way we will count or measure how much machine maintenance we did.  We need to know this because machine maintenance is part of the overhead.

    Quality Inspections:  1,000 inspections

    * The number of “quality inspections” is the way we will count or measure how much quality control we did.  We need to know this because quality control is part of the overhead.

    Quantity of EACH type of Overhead Used by EACH type of Phone:
    PDA-Phones: 5,500 Machine Hours and 650 Quality Inspections
    Simple-Phones: 4,500 Machine Hours and 350 Quality Inspections

  • WACC Weighted Average Cost of Capital in 3 Minutes (YouTube Video Below)

    3-Minute Overview: (Also Download Free Cheat Sheet at Bottom)

    Part 1

    Part 2

    WACC Exam Preparation Premium Video (Free Preview)

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    Download my FREE Cheat-Sheet PDF for WACC Weighed Average Cost of Capital click here

    • Money (capital) needed to run a company comes from either borrowing (debt) or the owners’ money (equity).

     

    • The COST of capital is either the interest payment on the debt, or the required profit that the owners want in return for their investment (in MBA bullshit language: “expected return”).

     

     

    • When you COMBINE BOTH the interest rate of debt AND the ‘expected return’ of the investors/owners, we get the total cost of capital.

     

    • If the cost of debt (e.g. interest) and cost of equity (expected return) are different, then we have to get an AVERAGE of the two to get our COST OF CAPITAL

     

    • Cost of capital is expressed as a percentage; because it’s compared to the total capital (as a percentage of the total capital).  Just like bank loan interest is expressed as a percentage of  your total loan.

     

    • What if your company has more debt vs. equity, OR vice versa? Then our formula must give more importance or ‘WEIGHT’ to whichever is bigger; and must give LESS weight to whichever is SMALLER.  Thus, we have the WACC or Weighted Average Cost of Capital concept.

     

    • This is the basic WACC or Weighted Average Cost of Capital Formula:

    WACC = (Debt Proportion)(Cost of Debt %)(1 – tax rate %) + (Equity Proportion)(Cost of Equity %)

    • To understand this formula step-by-step in action, watch my free video below.

    Step-by-step WACC CalculationPart 1

    Step-by-step WACC CalculationPart 2