IRR

How to evaluate projects and investments – NPV vs IRR

How to evaluate projects and investments – NPV vs IRR

Every business at some stage has to evaluate projects or investments and choose the ones that will benefit the business most. Usually, it will be faced with a limited budget and spending this capital wisely is critical. This process is called capital budgeting and the most used decision making tools…

How to calculate returns on investment – using IRR

How to calculate returns on investment – using IRR

If you’re looking to raise funds for your startup, the first question an investor will ask is what’s the return? And if you think that’s easy, it’s the annual profit divided by the investment, you’ll be wrong, e.g. annual profits of £75,000 with an investment required of £250,000 gives a…

Investors’ Jargon explained

Investors’ Jargon explained

  Once you start meeting with investors’, you will find that they and their financial advisers start talking in jargon about your business in terms that may as well be in Klingon. EBITDA, IRR, NPV, leverage, terminal value, net cashflow, free cashflow, blah…blah…blah… Here’s a short explanation of investors’ jargon…