Payback Period Template
Payback Period Template
This payback period template will help you visualize and determine the period of time a company takes to recoup its investment.
Here is a preview of the payback period template:
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The Payback Period shows how long it takes for a business to recoup its investment. This type of analysis allows firms to compare alternative investment opportunities and decide on a project that returns its investment in the shortest time – if that criteria is important to them.
Payback Period Formula
Payback Period = (Initial Investment − Opening Cumulative Cash Flow) / (Closing Cumulative Cash Flow − Opening Cumulative Cash Flow)
In essence, the payback period is used very similarly to a Breakeven Analysis but instead of the number of units to cover fixed costs, it considers the amount of time required to return the investment.
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Analyst Certification FMVA® Program
Below is a break down of subject weightings in the FMVA® financial analyst program. As you can see there is a heavy focus on financial modeling, finance, Excel, business valuation, budgeting/forecasting, PowerPoint presentations, accounting and business strategy.
A well rounded financial analyst possesses all of the above skills!
Additional Questions & Answers
CFI is the global institution behind the financial modeling and valuation analyst FMVA® Designation. CFI is on a mission to enable anyone to be a great financial analyst and have a great career path. In order to help you advance your career, CFI has compiled many resources to assist you along the path.
In order to become a great financial analyst, here are some more questions and answers for you to discover:
- What is Financial Modeling?
- How Do You Build a DCF Model?
- What is Sensitivity Analysis?
- How Do You Value a Business?
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