Planning for Fixed-Asset Investment Requires the Right Tool, Not Just a Spreadsheet

October 24, 2011

by Robert Kugel, Ventana Research

In today's economy, all companies are contending with a dynamic business environment characterized by volatile commodity prices and exchange rates, a shaky global financial system and slow growth in many countries. Many of them rely heavily on desktop spreadsheets to support the data collection and analysis related to their capital-asset planning. However, spreadsheets have inherent limitations that make them the wrong choice.

Spreadsheets are handy because most people already have them installed on their computer and have the basic skills to use them. They facilitate ad-hoc analysis and modeling. People who understand a business process and business objectives can quickly translate this knowledge into formulas and numbers. More formal software, such as dedicated planning applications, demand some degree of additional training for business users and may also require some ongoing involvement by the IT department to set up and maintain models and analyses. Thus for many departments and individuals this creates a barrier, and they conclude that it's just faster, easier and cheaper to work with spreadsheets.

Read more... | Source: The Big Fat Finance Blog.

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A long-term tangible piece

A long-term tangible piece of property that a firm owns and uses in the production of its income, that is what Fixed-Asset Investment is Go Here

Thus, fixed investment is

Thus, fixed investment is investment in physical assets such as machinery, land, buildings, installations, vehicles, or technology. Normally, a company balance sheet will state both the amount of expenditure on fixed assets during the quarter or year, and the total value of the stock of fixed assets owned. pmp exam cost

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Fixed assets are held by an

Fixed assets are held by an enterprise for the purpose of producing goods or rendering services, as opposed to being held for resale in the normal course of business. For example, machines, buildings, patents or licenses can be fixed assets of a business. débuter en bourse

The reporting option that is

The reporting option that is built into most asset tracking solutions provides pre-built reports, including assets by category and department, check-in/check-out, net book value of assets, assets past due, audit history, and transactions. forfait iphone 4s

Tracking assets is an

Tracking assets is an important concern of every company, regardless of size. Fixed assets are defined as any 'permanent' object that a business uses internally including but not limited to computers, tools, software, or office equipment. galaxy note

In finance, a revaluation of

In finance, a revaluation of fixed assets is a technique that may be required to accurately describe the true value of the capital goods a business owns. This should be distinguished from planned depreciation, where the recorded decline in value of an asset is tied to its age. jeu mmorpg

Another theory of fixed

Another theory of fixed investment determination is based on Tobin's q, the ratio of the market value to the acquisition cost of an additional unit of physical capital; investment is hypothesized to be an increasing function of this ratio. Pine Furniture Ammanford

All that happens is that the

All that happens is that the same land changes owners. If land is sold, it may yield a capital gain for the seller, but such profits from land sales are not usually made explicit in official statistics, in part because a standard valuation of what the land was previously worth is often difficult to operationalize, in particular if the land was improved or developed by the seller. Antiques Auctions

Thus, fixed investment is

Thus, fixed investment is investment in physical assets such as machinery, land, buildings, installations, vehicles, or technology. Normally, a company balance sheet will state both the amount of expenditure on fixed assets during the quarter or year, and the total value of the stock of fixed assets owned. Low Cost Legal

The method of depreciation

The method of depreciation to be adopted is best left for the management to decide in consideration to the peculiarity of the business, prevailing economic condition of the assets and existing accounting guideline and principles as implied in the organizational policies. Rolex Watches For Sale

Depreciation is, simply put,

Depreciation is, simply put, the expense generated by the uses of an asset. It is the wear and tear of an asset or diminution in the historical value owing to usage. Further to this; it is the cost of the asset less any salvage value over its estimated useful life. ICT in schools

It is pertinent to note that

It is pertinent to note that the cost of a fixed asset is its purchase price, including import duties and other deductible trade discounts and rebates. In addition, cost attributable to bringing and installing the asset in its needed location and the initial estimate of dismantling and removing the item if they are eventually no longer needed on the location. Swimming Pool Chemicals

The method of depreciation

The method of depreciation to be adopted is best left for the management to decide in consideration to the peculiarity of the business, prevailing economic condition of the assets and existing accounting guideline and principles as implied in the organizational policies. phlebotomist

The use of assets in the

The use of assets in the generation of revenue is usually more than a year- that is long term. It is therefore obligatory that in order to accurately determine the net income or profit for a period depreciation is charged on the total value of asset that contributed to the revenue for the period in consideration and charge against the same revenue of the same period. where to buy mira hair oil

The reasoning is that they

The reasoning is that they would be unlikely to tie up additional capital in fixed assets for several years or more, unless they thought it would be a commercially viable proposition in the longer term. If there is too much uncertainty about whether their fixed investment will pay off, they are unlikely to engage in it. free seo analysis

The level of fixed

The level of fixed investment by businesses also indicates something about the level of confidence that business owners or managers have about the ability to earn more income from sales in the next few years. Shop Fitting

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Capital investment decisions

Capital investment decisions are long-term choices about which projects receive investment, whether to finance that investment with equity or debt, and when or whether to pay dividends to shareholders. Mining Jobs in Canada

Capital budgeting is the

Capital budgeting is the planning process used to determine whether an organization's long term investments such as new machinery, replacement machinery, new plants, new products, and research development projects are worth pursuing. Boston Event Planner

These methods use the

These methods use the incremental cash flows from each potential investment, or project. Techniques based on accounting earnings and accounting rules are sometimes used - though economists consider this to be improper, such as the accounting rate of return and return on investment. best hotel deals

As such, those shareholders

As such, those shareholders who fail to thoroughly analyze their stock purchases, such as owners of mutual funds, could well be called speculators. Indeed, given the efficient market hypothesis, which implies that a thorough analysis of stock data is irrational, all rational shareholders are, by definition, not investors, but speculators. real madrid ticket prices

Great information, I’ve

Great information, I’ve been reading about this topic for one week now for my exams in school and thank God I found it here in your blog. I had a great time reading this .
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A common practice in

A common practice in choosing a discount rate for a project is to apply a WACC that applies to the entire firm, but a higher discount rate may be more appropriate when a project's risk is higher than the risk of the firm as a whole. This is what net present value called. Graphic Design Perth

The ability to respond to change is now more important

The ability to respond to change is now more important than the ability to plan. Using a dedicated planning and budgeting application is a better alternative to spreadsheets, but planning software that has built-in project management features can be an even better option because it explicitly manages events that have time dependencies and aggregates individual investment project totals. Marketing Consultant

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Spreadsheet is no more enough

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Hey, I think your website might be having browser compatibility issues. When I look at your blog in Safari, it looks fine but when opening in Internet Explorer, it has some overlapping. I just wanted to give you a quick heads up! Other then that, great blog!
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People who understand a ujye

People who understand a ujye business process and business objectives can quickly translate this knowledge into formulas and numbers.

Fixed assets

Fixed assets, also known as non-current assets or as property, plant and equipment (PP & E), is a term used in accounting for assets and property that are not easily converted into cash. This can be compared with current assets such as cash or bank accounts, which is described as a liquid asset. In most cases, the only tangible assets are determined as fixed.espresso machine review

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Benchmarking in academic pharmacy, and recommendations for the potential uses of benchmarking in academic pharmacy departments are discussed in this paper. Benchmarking is the process by which practices, procedures, and performance metrics are compared to an established standard or best practice. Many businesses and industries use benchmarking to compare processes and outcomes, and ultimately plan for improvement.best creatine supplement

Before I read this article I

Before I read this article I ws unaware that Planning for Fixed-Asset Investment Requires the Right Tool. I have been used to using spread sheets as when I first got involved in ecoonmics I was taught this method
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Not only was this article

Not only was this article very imformative I learn't more about alternatives to conventional spredsheets.I tried in the past to use dedicated planning software but found it difficult to pick up. In the end I went back to using spreadsheets. online store

I was most impressed wth how

I was most impressed wth how you emphazised jus how Planning for Fixed-Asset Investment Requires the Right Tool. I was so used to using excel before I honestly had no idea there were alternative tools available.
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I would like to recommend

I would like to recommend open office as an alternative to using excel. I have been using myself for sometime now and has served me well. I learn't a some great tips from reading your article. hot yoga in seattle

Thanks for highlighting the

Thanks for highlighting the fact that Planning for Fixed-Asset Investment Requires the Right Tool, Not Just a Spreadsheet. I will let my boss know about this.

This post is very meaning

This post is very meaning ful

Spreadsheets are Error-Prone

Spreadsheets are great tools but they are uncontrolled. The user can inadvertently build errors an bugs into the spreadsheet model that are difficult to detect. . I think it would have been easier to make eulogy examples than fix a spreadsheet full of logic errors. I work in a company that implemented SAP fixed assets software but our implementation partner turned out to be not very useful and didn't know the product very well. We changed implementation partner and eventually went live after a six month delay and lots of long hours.

Statistical data in electronic format

Business plans can quickly become obsolete, but they have a very high value if made and used properly. Virtually every business plan is a kind of a company handbook or business idea and should be periodically verified by every entrepreneur. It needs to be amended because it is a prediction based on statistical data sometimes difficult to find. Spreadsheets help in this process.

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Read the article, I benefited from investment planning and your view

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Spreadsheets are indeed very

Spreadsheets are indeed very powerful, but requires a lot of logic for the case, or the need to develop software systems.

Spreadsheets are the easiest way

I think to organise your balance sheet, staff, assets we would be lost without the power and usability of spreadsheets. Online Fishing Games

Spreadsheets

I would just like to add that The best program I use for spreadsheets now is Google Docs, its great the only issue is that you have to be online in order to use it. Online Fishing Games

Collating data

I find Google docs good, but you cannot do all of the formulas such as you can in open office or Microsoft office. 48HourPrint-An Online Printing Company

Data collection

I agree I thik the latest 2010 edition of Microsoft is a piece of a href="http://www.breakdowncoveroffers.org">breakdown cover compared to Google docs, the only good thing with google docs is that you can access it from different locations.

Data

I agree with my work colleagues we access google docs when we work all over the city, it is much easier and the way forward in my opinion.