Learn how to calculate a growing company's forecasted PP&E expenditure along with depreciation and accumulated depreciation for the future.
- [Instructor] As your business continues to grow,…you'll have to make investments in property and equipment.…This could include more buildings, warehouses,…mannequins, checkout cashier drawers, all the above.…These expenses are referred to as capital investments,…and they're expected to grow proportionately with sales.…So, traditionally, PP&E really doesn't follow…a linear trend, there are periods of saving,…and then periods of spending, and saving,…and spending, and so on, and so forth,…especially when it comes to large purchases.…PP&E expenditures require a lot of upfront planning.…
So, let's look at the balance sheet,…and try to calculate some PP&E for the future.…I'm in 03_04_BS_Begin.…It's basically just a continuation from the previous video.…So let's think about what kind…of equipment you'll need to purchase.…You may want new cash registers,…or you may want more racks to hold your stuff,…or some extra warehouse space.…So let's imagine that you start with the smaller purchases,…and plan to move to larger ones as time progresses.…
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- Distinguish between the types of moving averages.
- Determine a seasonal adjusted trend.
- Break down pro-forma financial statements.
- Identify cash flows, and what increased liabilities and decreased earnings generally indicate.
- Tell what a regression is.
- Outline the naive approach.